The Multi Commodity Exchange of India (MCX) is set to launch Gold Ten (10 grams) futures contracts starting on Tuesday, April 1, 2025. These new contracts will be available for trading with expiry months of April 2025, May 2025, and June 2025, offering a convenient and cost-effective option for investors and traders looking to hedge their positions in the bullion market.
Features of the Gold Ten Futures Contracts
The Gold Ten futures contracts are designed to cater to those seeking exposure to gold prices, especially as gold continues to trade at record high levels. The MCX Gold rate is currently nearing ₹90,000 per 10 grams, driven by a surge in international bullion prices. As of Wednesday, MCX gold hit a high of ₹88,970 per 10 grams.
Contract Specifications
Symbol: GOLDTEN
Trading Unit: 10 grams
Maximum Order Size: 10 kg
Tick Size: ₹1 per 10 grams
Daily Price Limits: Initially 3%, extendable to 6%, and further to 9% in case of high volatility
Margin Requirements: Minimum initial margin of 6% (or as per SPAN), with an extreme loss margin of 1%
Trading Hours: Monday to Friday, from 9:00 a.m. to 11:30/11:55 p.m. (adjusted for US daylight saving time changes)
Open Position Limits
Individual Clients: 5 metric tonnes (MT) or 5% of market-wide open positions, whichever is higher
Member Firms (all clients collectively): 50 MT or 20% of market-wide open positions, whichever is higher
Delivery and Settlement Details
The contracts will be settled through compulsory delivery at MCX’s designated clearinghouse facilities in Ahmedabad, with additional delivery centers in New Delhi and Mumbai. The gold delivered must meet the 999 purity standard and be sourced from LBMA-approved suppliers or MCX-approved domestic refiners.
Delivery Mechanism
Staggered Delivery Period: Starts five trading days before expiry, allowing sellers and buyers to indicate their delivery preferences. If no prior indication is given, positions will be marked for compulsory delivery upon contract expiry.
Delivery Period Margins: The higher of 3% + 5-day 99% VaR of spot price volatility or 25%.
Final Settlement Price
On the expiry date, the final settlement price will be determined based on the Ahmedabad spot price for Gold (10 grams, 995 purity), adjusted for 999 purity. If the spot price is unavailable due to unforeseen circumstances, MCX Clearing Corporation will follow prescribed guidelines to determine the final settlement price.
Market Impact
The launch of Gold Ten futures contracts is expected to enhance liquidity in the bullion segment. This provides traders with a structured and efficient platform to participate in gold price movements. Both retail and institutional investors can use these contracts to diversify their portfolios and hedge against price volatility.
Disclaimer
The views and recommendations mentioned above are those of individual analysts or broking companies, not of Mint. Investors are advised to consult certified experts before making any investment decisions.
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