By Ravil Shirodkar June 30 (Bloomberg) -- National Spot Exchange Ltd., India’s biggest bourse for trading physical gold, launched contracts in small denominations, aimed at households in the world’s largest consumer of the precious metal.
The exchange offered contracts in sizes from 8 grams to 1 kilogram starting today, Anjani Sinha<http://search.bloomberg.com/search?q=Anjani+Sinha&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, managing director, said in an interview today. Presently, the bourse only trades imported gold bars in sizes of 100 grams and 1 kilogram, he said. The Multi Commodity Exchange of India Ltd.<http://mail.google.com/apps/quote?ticker=MCX%3AIN> and the National Commodity & Derivatives Exchange Ltd., India’s biggest commodity bourses, only trade gold futures. That forces individuals to buy or sell bullion through jewelers and banks in the physical form. Households in India, where women are the biggest users of gold, have 25,000 tons locked away in family vaults, according to the National Spot Exchange. “Our main aim is to tap the huge household stock,” said Sinha in a phone interview. “There’s no transparent, electronic market with a nationwide reach for spot gold” in India, he said. India imports about 800 metric tons of gold a year, about a quarter of the world’s production, and more than three-quarters of which are used in jewelry. Still, the absence of a national spot market means jewelers and traders set the benchmark rate using London’s morning/afternoon “fixing,” the price used by some global mining companies to sell their output. Small-sized gold contracts may not help India become a price-setter in the global physical bullion market as the country’s commodity exchanges are dominated by traders, producers and consuming companies, compared with the 13 million individual investors who trade stocks. ‘Net-Savvy’ “The penetration of the gold market through exchanges in India is still meager compared with stocks and to that extent it’s early say how many households are net-savvy to trade gold electronically,” said Si Kannan<http://search.bloomberg.com/search?q=Si+Kannan&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, associate vice president at Kotak Commodity Services Ltd. “People in the villages may still prefer to sell to a jeweler.” Gold climbed to more than $940 an ounce in Asia, heading for a third quarterly increase, as the weakening dollar fueled demand for bullion as a store of value. Immediate-delivery gold dropped 0.3 percent to $934.97 an ounce at 6:47 p.m. Mumbai time. August-delivery bullion on the Multi Commodity Exchange in Mumbai dropped 0.6 percent to 14,515 rupees per 10 grams. Gold traded in Indian rupees has gained 13 percent in the past year as the currency weakened on concerns that foreign investors would withdraw funds from emerging markets. About 25 kilograms of gold changed hands on the first day of the new contracts, Sinha said later today. Imports Slump High domestic prices and increased supply of scrap jewelry has lead to a nine-month slump in Indian imports. Purchases in the first three weeks of June were 8 to 10 tons, compared with 17 to 18 tons in the year-ago period, according to the Bombay Bullion Association Ltd<http://www.bombaybullion.com/> . Indian consumers recycle about 150 tons to 200 tons of gold annually, Kannan said. Scrap supply in the first quarter of 2009 surpassed the year-earlier quarter because of record domestic prices. “This year, recycled gold would range around 25 percent of gold consumption, which would be about 700 tons,” he said. Sellers using the National Spot Exchange will take their gold to approved refineries which will turn it into bars of international standard purity, Sinha said. The refinery will charge 75 rupees ($1.57) to convert 100 grams of gold and the exchange will levy a fee of 20 rupees for every 100,000 rupees worth of bullion traded. The National Spot Exchange is 99 percent owned by Financial Technologies India Ltd. <http://mail.google.com/apps/quote?ticker=FTECH%3AIN>, founder of the Multi Commodity Exchange, the world’s third-biggest bullion bourse. The national exchange began trading Oct. 15, 2008, with contracts in gold, silver, castor seeds, cotton and pulses, according to its Web site<http://www.nationalspotexchange.com/> . -- Swami Vivekananda : Life and Teachings Copy the below link to your Browser : http://www.belurmath.org/swamivivekananda.htm --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
