Effectively manage Bullion Price Exposures through Hedging
Author(s): City Air NewsBathinda (Punjab), February 13, 2016: : Aimed at further contributing to the development of bullion market in India, and educate its stakeholders about the benefits of hedging, Multi Commodity Exchange of India...
Bathinda (Punjab), February 13, 2016: : Aimed at further contributing to the development of bullion market in India, and educate its stakeholders about the benefits of hedging, Multi Commodity Exchange of India Ltd. (MCX) and The Sarafa Association (Bathinda) jointly organized an awareness programme today in Bathinda, Punjab.
The programme started with a detailed presentation made by MCX experts on commodity price risk management, which assumes great importance for the commodity value chain participants, in view of the ongoing uncertainty and volatility in commodity prices, which is the outcome of factors such as, demand and supply fundamentals, geopolitical risks etc.
During later sessions, the experts briefed the market participants about the technicalities of working of the commodity exchanges with respect to the products, price discovery, transparency and risk management mechanism in trading and settlement of transactions.
Mr. Sanjay Gakhar, Vice President-Business Development, MCX said “An effective hedging strategy to safeguard against volatile bullion prices can be through use of commodity derivatives such as silver futures and gold futures traded on MCX. Moreover, to cater to the varying demands of all stakeholders of the bullion economy— importers, large jewellers, small & medium jewellers, different size variants of both gold and silver futures are offered on the Exchange.”
“Additionally, bullion futures contracts listed on MCX are rupee-denominated, which enable its stakeholders in India to evade the risk arising from fluctuation in currency, should they trade in international exchanges”, Mr. Gakhar added.
Mr Darevjeet Thakur, General Secretary, The Sarafa Association, Bathinda said, “Continued uncertainty over global economy over the last few years has resulted in both gold & silver exhibiting consistent high price volatility. Hence price risk management or hedging has become imperative for all bullion stakeholders to sustain themselves, especially in order to maintain competitiveness.”