National Spot Exchange To Tap Household Gold In India
Published: 01-Jul-2009
NSE is eyeing approximately 25,000 tons of gold locked in household vaults
National Spot Exchange (NSE), a national level institutionalized, electronic spot exchange for trading physical gold, has introduced contracts in small denominations to attract households in India for the precious metal, reported Bloomberg.
Major exchanges in India only trade gold futures, forcing individuals to buy or sell bullion through jewelers and banks in physical form. However, NSE, which currently trades imported gold bars in sizes of 100gm and 1kg, is expected to offer contracts from 8gm to 1kg.
In a phone interview to the news paper, Anjani Sinha, MD of NSE, said: “Our main aim is to tap the huge household stock. There’s no transparent, electronic market with a nationwide reach for spot gold in India.”
Si Kannan, Associate Vice President at Kotak Commodity Services, said: “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. People in the villages may still prefer to sell to a jeweler.”
India’s National Spot Exchange is 99% owned by Financial Technologies India, founder of the Multi Commodity Exchange. The national exchange began trading in 2008, with contracts in gold, silver, castor seeds, cotton and pulses.
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