Commodity Online
MUMBAI: Futures trading in gold and silver is booming in India these days as the country’s commodity exchanges are witnessing a surge in volumes as investors find it risk-free to put money in bullion futures.

For the month of April, trading volumes in India’s commodity bourses led by the largest—the Multi Commodity Exchange (MCX)—surged by nearly 42 percent thanks to spurt in volumes in gold and silver futures.

India’s national commodity exchanges and 19 regional bourses generated a business of to Rs 2,37,503 crore in the first fortnight of Apri, according to figures from the Forward Markets Commission (FMC).

Bullion futures—mainly in gold and silver—was the key volume drivers on most commodity exchanges. Gold and silver trading volumes surged by 30.87% to touch Rs 1,10,492 crore during the period.

Bullion analyst Anurag Mishra says gold and silver are the hottest commodities in India’s commodity exchanges. “Gold and silver futures are the drivers of India’s commodity futures market. Bullion futures trading will only go up in India as the country is just five years old in online commodity futures trading,” Mishra told Commodity Online.

On Tuesday, gold futures rose by 0.28 cent in trade on MCX on steady buying by speculators influenced by a firming global trend. MCX gold for the most-active June contract gained 0.28 per cent to Rs 14,477 per ten gram, in trading of 462 lots. The precious metal for the far-month August contract traded higher by the same margin at Rs 14,477 per ten gram, with a trading volume of 13 lots.

Traders said sustained buying by speculators and reports of a firming global trend mainly led to the rise in gold prices. A pick-up in demand in the spot markets for the current marriage season also supported the uptrend, they added. Meanwhile, gold tr aded higher in the Asian markets at $903.50 an ounce against Monday's close of $894.

Similarly, silver futures rose marginally in early trade on MCX as traders and speculators enlarged their positions to meet the current marriage-season demand.

A pick-up in demand in view of the marriage season and increased offtake by industrial units also supported the uptrend.

At 1100 hrs on the MCX, silver for the most-active July contract inched up by 0.19 per cent to Rs 21,485 per kg with a trading volume of 286 lots.

Similarly, the metal for the far-month September contract climbed by 0.13 per cent to Rs 21,559 a kg. Increased buying by traders and speculators to meet the current marriage-season demand and reports of a positive trend in the overseas market, mainly p ushed up silver prices.

It is not just in futures trading that Indians’ appetite for gold and silver continues.

People in India are buying gold like anything, especially on festival days.

Indians bought a mind-boggling 45 tonnes of gold on a single day last month—on April 27, when the country celebrated Akshyay Tritiya, popularly known as the most auspicious gold buying day according to Hindu religious traditions.

According to estimates from the Bombay Bullion Association and the World Gold Council (WGC), the 45 tonnes of gold purchases across India was lesser than the yellow metal that Indians bought on Akshyay Tritiya last year. On the Akshyay Tritiya in 2008, nearly 50 tonnes of gold sales had taken place.

WGC said that gold demand grew 14% in value terms in volumes on April 27 and the rise in value comes on the back of a 25% year-on-year jump in the yellow metal’s price to 14,700 per 10 gm.

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