MCX and IBJA Join Hands to Set Up New Bullion Spot Exchange

Also, MCX and IBJA plans to introduce several new measures to deepen commodity derivative markets in India.

SEATTLE (Scrap Monster): The Multi Commodity Exchange (MCX) has signed a Memorandum of Understanding (MoU) with the apex trade body India Bullion and Jewellers Association (IBJA) in setting up bullion spot exchange. The partnership will explore the possibility of setting up of the spot exchange in line with the government’s vision to establish a trade-efficient and consumer-friendly regulated gold exchange in the country.

It must be noted that both MCX and IBJA have been working in collaboration towards development of the bullion and jewellery sector in India. The signing of the MoU will further strengthen these initiatives. Accordingly, seminars and awareness programmes on price risk management for bullion traders and jewelers will be arranged throughout the country. These initiatives will focus on efforts to promote organized markets and educate small and medium sized jewelers about effective hedging tools.

According to industry experts, the setting up of the spot gold exchange would result in creation of a vibrant gold ecosystem matching the country’s huge demand for gold. Incidentally, India is the world’s second largest consumer of gold. Further, it would also lead to assurance in quality of gold in addition to ensuring price transparency, boosting recycling and increased integration with financial markets. MCX and IBJA targets active retail participation, which in turn could stimulate the government’s gold monetization efforts aimed at mobilizing idle gold lying in Indian households.

Also, MCX and IBJA plans to introduce several new measures to deepen commodity derivative markets in India and encourage the participation of corporate including small and medium-sized enterprises (SMEs) to manage their price risks, the joint press release said.

Earlier in 2017, the World Gold Council (WGC) had released a report on the need of gold spot exchange in India. Later in the year, it had also come up with a gold exchange blueprint.

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