Definition
Bullion Market
The bullion market is where gold and silver in bulk physical form are traded, encompassing spot bars and coins as well as related futures and ETFs.
India is one of the world's largest bullion consumers, with deep demand for gold jewellery, coins and bars, especially around festivals and weddings. The bullion market spans physical dealers, banks, the MCX and the India International Bullion Exchange at GIFT City.
Domestic bullion prices reflect global spot prices, the rupee and import duties. Investors access bullion through physical metal, gold ETFs, Sovereign Gold Bonds and MCX futures, each with different costs, liquidity and tax treatment.
Related terms
- Sovereign Gold Bonds (SGB)Sovereign Gold Bonds are government securities denominated in grams of gold, offering gold-price returns plus a fixed interest, without holding physical gold.
- Safe-Haven Asset (Gold)A safe-haven asset retains or gains value during turmoil; gold is the classic example, prized for its lack of credit risk and inverse tendency to risk assets.
- Gold/Silver Futures (MCX)Gold and silver futures on MCX are exchange-traded contracts to buy or sell a fixed quantity of bullion at a future date, used by jewellers, investors and traders to hedge or speculate.
- Gold-Silver RatioThe gold-silver ratio is the number of ounces of silver needed to buy one ounce of gold, used to judge the relative value of the two metals.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.