Silver: ICEX to roll-out small contracts to capture massive Indian demand

Following growing interest from small investors in India, Indian Commodity Exchange (ICEX), which started operations in late 2009, is to soon introduce micro volumes of Gold and Silver contracts of up to 1 kilo each, writes MineWeb’s Shivom Seth in Mumbai.

The Exchange is a screen-based on-line derivatives exchange for commodities. At the end of last year, it had recorded one of its highest volumes in physical delivery of bullion (gold and silver) on its platform.

“With the spurt in the demand of gold and silver in recent times, commodity exchange trading in these precious metals has surged in India, which is arguably the world’s largest bullion market. Delivery as a percentage of average open interest was 94.10% in gold, 62.02% in silver and 79.78% in gold of 100 grams,” said Nanikbhai Mehta at the exchange.

In just one day, on December 2, 2011, the exchange recorded one of its highest volumes in physical delivery trading of 3665.75 kilograms of silver at a commodity delivery value of $4 million (at the current exchange rate).

Mehta added that traders in India were betting big time on silver futures even as retail speculators have ensured that the white metal remains the highest traded commodity on the exchanges. Indian Commodity Exchange, which launched Iron Ore futures last year, is initiating to launch small contracts in gold and silver.

CEO Rajnikant Patel said that traders who could not afford to trade at high volumes in gold and silver could trade in smaller volumes. Moreover, taking a leaf from its competitor India’s leading commodity exchange, the Multi Commodity Exchange’s (MCX) hedging platform, which has proven to be an effective tool to discover the best price in the market and has gained industry confidence, the Indian Commodity Exchange too has decided to take a share of the investor pie.

On Friday, Silver March 12 contract was up by 1.08% to $1169.35 per kilo on the MCX. SilverM April 12 contract was up by 1.36% and Silver MIC April 12 contract was up by 1.36%.

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Posted by Silver Guru on Feb 7 2012. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry