Investment in Gold is in the genes of every Indian Investor and time and again we have proved that Indians have a great appetite for Gold, like a tradition especially
on days which are considered Auspicious.
Indians invest in gold for many reasons like Investment, Children Marriage, exchange old jewellery or gold for new designs and patterns, fashionable gold jewellery.
For many people in gold is symbolic and sentimental investment.
Following is a table depicts auspicious occasions on which people generally would look to buy gold:
Indians also try and advance book gold as generally there is lot of attractive schemes and discounts on the auspicious date floated by the jewelers. Even in the case of purchase of a house (real estate) or car generally gold / bar or coin is offered as a free gift on the particular auspicious date.
There are many options of investing in gold. Following is the mechanism by which one can invest in gold through exchange platform.
Purchasing of gold through exchange carries some distinct advantages like better rates, assured quality (London Bullion Market Association (LBMA) approved bars),
standard size and transparent process of purchase and delivery from accredited vault.
Following sizes of gold are available for delivery at exchange platform:
With respect to all the above gold contracts in case position is kept open during tender period will result in settlement through compulsory delivery of
All bars will be serially numbered and supplied by LBMA approved suppliers. In case of Gold Petal and Gold Guinea bars can be also supplied by other suppliers
as approved by MCX. All bars will be supplied along with supplier’s quality certificate.
Rates quoted are ex-delivery centre (inclusive of all taxes and levies relating to import duty, but excluding Sales Tax / VAT, any additional tax or surcharge
on sales tax, local taxes and octroi)
Delivery process flow:
Buyer will have to give pay-in of funds by 11.00 a.m. on E+4 basis
Seller will have to give pay-in of commodity by 5.00 p.m on E+3 basis
Pay-out of funds to seller will happen after 2.00 p.m. on E+4 working days
Pay-out of commodity to buyer will happen by 5.00 p.m. on E+4 working days
E stands for Expiry date of the contract
Charges involved (As per actuals):
Delivery charges / Making Charges – Rs 200.
Vault Charges – Rs 35 per day for Gold 1 kilo; Rs 3.5 per day per 100 gms and Rs 0.10 per guinea per day.
Commission Agent Charges (In case Investor does not have VAT registration number of the state where the delivery is taking place). – Generally they quote 0.25
Brokerage rate charged by broker- as is applicable
In case delivery is desired in demat form then ICIN charges – Rs 100.
Following documents would be required by client for Exchange gold delivery:
Commodity trading account with broker
Commodity Demat account with broker
VAT registration number or Commission Agent VAT number
Author is product head -commodity & currency, Prabhudas Lilladher