GOLD
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INTRODUCTION
Gold is primarily a monetary asset & partly a
commodity.
Gold is the World·s oldest international currency.
Gold is an important element of Global monetaryreserves.
With regards to investment value, more than
two-thirds of gold total accumulated holdings
with central banks· reserves, private players, andheld in the form of high-karat jewellery.
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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 was13% 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 combinedwith 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.
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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 drivingup local prices.
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GLOBAL SCENARIO
London is the World·s biggest clearing house.
Mumbai is under India·s 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.
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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 resultof:
Strong growth in jewellery demand;
The revival of the indian market
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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 World·s largest gold producer with
340,88 tonnes in 2010, followed by the United
States and South Africa.
In 2010, India was the world·s largest goldconsumer 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.
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2009 (tonnes) 2010 (tonnes) % of change
2009 Vs. 2010
Supply:
Mine production 2584.3 2658.8 3
Net producer hedging -252.2 -116.1 -
Total mine supply 2332.1 2542.7 9
Official sector sales 29.8 -87.2 -
Old gold scrap 1672.2 1652.7 -1
Total Supply 4034.0 4108.2 2
Demand:
Fabrication
Jewellery 1760.3 2059.6 17
Industrial & Dental 373.2 419.6 12
Sub total of above fabrication 2133.5 2479.2 16
Bar & Coin retail investment 742.8 995.0 34
ETFs & similar 617.1 338.0 -45
TotalD
emand 3493.4 3812.2 9OTC investment & stock flows 540.6 296.0 -45
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TOP TEN PRODUCING COUNTRIES
2009
Production (in tonnes)
China
United States Australia
South Africa
Russia
Peru
IndonesiaCanada
Ghana
Uzbekistan
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WORLD GOLD HOLDINGS MARCH
2011
8134
3401
2814
2452
2435
1054
1040
789765
613558 Holding (in tonnes)
United States
Germany
IMF
Italy
France
China
Switzerland
Russia
Japan
Netherlands
India
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F ACTORS INFLUENCING THE
MARKET
Above ground supply of gold from central bank·s
sale, reclaimed scrap, and official gold loans.
Hedging interest of producers/miners.
World macroeconomic factors such as the USdollar and interest rate, and economic events.
Commodity-specific events such as the
construction of new production facilities or
processes, unexpected mine or plant closures orindustry restructuring, all affect metal prices.
In India Gold demand is also determined to a
large extent by its price level and volatility.
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GOLD CONTRACTS TRADED IN
MCX
Gold
1kg.
Gold
Mini 100grams.
GoldGuinea 8grams.
GoldPetal 1gram.
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CONTRA CT
SPECIFIC ATIONS
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GOLD 1 KG. Symbol
Trading Unit
Price quote
Maximum orderSize
Tick Size
GOLD
1 kg.
Rs. Per 10 grams. Ex-Ahmedabad(incl. of all taxes & levies relatingto import & customs duty, butexcluding sales tax/VAT, any otheradditional tax or surcharge onsales tax, local taxes & octroi.
10 kg.
Re. 1 per 10 grams ( minimumprice movement) i.e. Rs. 100 for 1kg.
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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.
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GOLD 1 KG. Delivery period
margin
Delivery centers
QualitySpecification:
Less than 995
25% of the value of open positionduring the delivery period
At designated clearing housefacilities 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 becalculated in the manner of therate of delivery * 999/995.
Rejected
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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
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GOLD GUINEA 8 GRAMS
Symbol
Trading Unit
Tick Size
Maximum ordersize
Delivery Units
GOLDGuinea
8 grams
Re.1 per 8 grams.
10 kg.
8 grams & in multiple thereof.
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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)
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CONTRACT SPECIFICATION OF
GOLD PETAL
Symbol
Trading Unit
Quatation/ basevalue
Price quote
Maximum ordersize
Tick size
Delivery units
Delivery centers
GOLDPetal
1 Gram
1 Gram
Ex- Mumbai (incl. of all taxes &levies relating to import & customsduty, but excluding sales tax/VAT,any other additional tax or surchargeon sales tax, local taxes & octroi)
10 kg.
Re.1 per 1 gram.
8 grams
Mumbai