GOLD

INTRODUCTION
Gold is primarily a monetary asset & partly a commodity. Gold is the Worlds oldest international currency. Gold is an important element of Global monetary reserves. With regards to investment value, more than two-thirds of gold total accumulated holdings with central banks reserves, private players, and held in the form of high-karat jewellery.

INDIAN SCENARIO
India is the largest market for gold jewellery in the world. 2010 was a record year for Indian jewellery demand; at 745.7 tonnes, annual demand was 13% above the previous peak in 1998. Indian jewellery demand more than doubled in 2010 in local currency terms. A 20% rise in the rupee price of gold combined with a 69% rise in the volume of demand, pushed up the demand by 101% to Rs. 1,342 billion. This compares with 2009 demand od Rs. 669 billion.

INDIAN SCENARIO

The rising price of gold, particularly in the latter half of 2010 created a virtuous circle of higher price expectations among Indian consumers which fuelled purchases, thereby further driving up local prices.

GLOBAL SCENARIO
London is the Worlds biggest clearing house. Mumbai is under Indias liberalised gold regime. New York is the home of gold futures trading. Zurich is the physical turntable. Istanbul, Dubai, Singapore, and Hong Kong are doorways to important consuming regions. Tokyo, where TOCOM sets the mood of Japan.

DEMAND & SUPPLY

Global demand for gold is centered on four primary categories:  Jewellery  Investments  Central bank reserves  Technology Gold demand in 2010 reached a 10 year high of 3,812.2 tonnes, worth US$ 150 billion, as a result of:  Strong growth in jewellery demand;  The revival of the indian market

DEMAND & SUPPLY

Strong momentum in Chinese gold demand and  A paradigm shift in the official sector, where central banks became net purchasers for the first time in 21 years. China was the Worlds largest gold producer with 340,88 tonnes in 2010, followed by the United States and South Africa. In 2010, India was the worlds largest gold consumer with an annual demand of 963 tonnes. The total supply of gold coming on to the market in 2010 reached 4,108 tonnes, a rise of 2% from 2009 levels.


2009 (tonnes) 2010 (tonnes) Supply: Mine production Net producer hedging Total mine supply Official sector sales Old gold scrap Total Supply Demand: Fabrication Jewellery Industrial & Dental Sub total of above fabrication Bar & Coin retail investment ETFs & similar Total Demand OTC investment & stock flows 1760.3 373.2 2133.5 742.8 617.1 3493.4 540.6 2059.6 419.6 2479.2 995.0 338.0 3812.2 296.0 2584.3 -252.2 2332.1 29.8 1672.2 4034.0 2658.8 -116.1 2542.7 -87.2 1652.7 4108.2

% of change 2009 Vs. 2010 3 9 -1 2

17 12 16 34 -45 9 -45

TOP TEN PRODUCING COUNTRIES 2009

Production (in tonnes)
China United States Australia South Africa Russia Peru Indonesia Canada Ghana Uzbekistan

WORLD GOLD HOLDINGS MARCH 2011

789 1040 1054 765 613 558

Holding (in tonnes)

United States Germany 8134 IMF Italy France China Switzerland Russia 3401 Japan Netherlands India

2435

2452 2814

FACTORS INFLUENCING THE

MARKET
Above ground supply of gold from central banks sale, reclaimed scrap, and official gold loans. Hedging interest of producers/miners. World macroeconomic factors such as the US dollar and interest rate, and economic events. Commodity-specific events such as the construction of new production facilities or processes, unexpected mine or plant closures or industry restructuring, all affect metal prices. In India Gold demand is also determined to a large extent by its price level and volatility.

GOLD CONTRACTS TRADED IN

MCX

Gold 1kg.

Gold Mini 100 grams.

Gold Guinea 8 grams.

Gold Petal 1 gram.

CONTRACT SPECIFICATIONS

GOLD 1 KG.
Symbol Trading Unit Price quote
  

Maximum order Size Tick Size

GOLD 1 kg. Rs. Per 10 grams. Ex-Ahmedabad (incl. of all taxes & levies relating to import & customs duty, but excluding sales tax/VAT, any other additional tax or surcharge on sales tax, local taxes & octroi. 10 kg. Re. 1 per 10 grams ( minimum price movement) i.e. Rs. 100 for 1 kg.

GOLD 1 KG.
Daily Price limit Initial Margin Additional Margin
  

Delivery unit

3% 4% In case of additional volatility, a special margin at such percentage (as deemed fit) will be imposed on both the buy side and the sell-side in respect of all outstanding positions, which will remain in force for next two days. After which the special margin will be relaxed. 1 kg.

GOLD 1 KG.
Delivery period margin Delivery centers
 

25% of the value of open position during the delivery period At designated clearing house facilities of group 4 securitas in Ahmedabad and Mumbai. Gold bars of 999.9 / 995 fineness A premium will be given to seller if if he offers a delivery of 999 purity, and the sale proceeds will be calculated in the manner of the rate of delivery * 999/995. Rejected

Quality Specification:

 

Less than 995

GOLD MINI 100 GRAMS

Symbol Trading Unit Tick size
  

Delivery Unit

GOLDM 100 grams Re. 1 per 10 grams. (minimum price movement) i.e. Rs. 10 for 100 grams. 100 grams

Rest everything is same as for Gold 1 kg contract

GOLD GUINEA 8 GRAMS

Symbol Trading Unit Tick Size Maximum order size Delivery Units
   

GOLDGuinea 8 grams Re.1 per 8 grams. 10 kg. 8 grams & in multiple thereof.

GOLD PETAL
Features


of Gold Petal Contract:

Physical delivery available in multiples of 8 grams: delivery possible in demat or physical form. Maximum duration to trade- trade timing 10 am to 11:55 pm. Assured purity in gold- 999 LBMA approved, tamper proof gold coins. Cost effective for retail clients ( Eg. At CMP Rs. 2270/-, margin deposit required is Rs. 90/- only)

CONTRACT SPECIFICATION OF
GOLD PETAL

Symbol Trading Unit Quatation/ base value Price quote

  

GOLDPetal 1 Gram 1 Gram Ex- Mumbai (incl. of all taxes & levies relating to import & customs duty, but excluding sales tax/VAT, any other additional tax or surcharge on sales tax, local taxes & octroi) 10 kg. Re.1 per 1 gram. 8 grams Mumbai

Maximum order size Tick size Delivery units Delivery centers

  

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