HEDGING Bullion Exposures with Futures

An awareness programme organized by The Bullion & Ornaments Merchants Welfare Association and MCX in Amritsar

 Amritsar, September 24, 2015: Furthering its efforts in creating awareness about the benefits of hedging among the market participants, thus contributing to the development of commodity futures market in India, Multi Commodity Exchange of India (MCX) and The Bullion & Ornaments Merchants Welfare Association, jointly organized an educational programme at Amritsar.

MCX experts guided the market participants through various topics such as Introduction to Commodity Derivatives, Market Fundamentals and Future Outlook of the Bullion Industry, History of Commodity Derivatives Markets, Regulation, Trading and Settlement, and Economic Benefits of Commodity Derivatives, among others.

 Mr. Sanjay Gakhar, Vice President-Business Development, MCX said, “Since stakeholders from the bullion spectrum including large and small jewelers are constantly exposed to the price risk of both gold and silver, they can effectively manage their bullion exposure by hedging on commodity exchanges such as MCX. Moreover, the participants can pick from a variety of bullion contracts with different denominations—Gold (1 Kg), Gold Mini (100 grams), Gold Guinea (8 grams), Gold Petal (1gram), Silver (30 Kg), and Silver Mini        (5 Kg), Silver Micro (1kg) —subject to the respective needs and requirements.

Mr. Pardeep Seth, President, The Bullion & Ornaments Merchants Welfare Association said, “Owing to globalization and integration of financial markets across the world, coupled with several other factors such as political turmoil, changes in import duties, currency exchange rates movements, etc., the prices of commodities including Gold and Silver have been volatile. This extreme fluctuation in bullion prices necessitates bullion stakeholders— corporates, traders, jewelers, importers, refiners—to adopt adequate risk management measures to manage their price risks.”

In the year 2014-15 MCX conducted over 400 awareness programmes across the country. The purpose of these programmes is to educate the market participants about the umpteen benefits the commodity futures market offers.