Definition
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.
MCX offers Gold (1 kg), Gold Mini, Gold Guinea, Gold Petal and Silver (30 kg) contracts of varying sizes, letting participants pick exposure to suit their needs. Prices track international bullion adjusted for the rupee and import duty.
Indian jewellers hedge inventory price risk, while investors gain leveraged bullion exposure without storage. Because gold is a major Indian import and a cultural store of value, MCX bullion futures are among the most liquid commodity contracts in the country.
Related terms
- 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.
- MCX (Multi Commodity Exchange)MCX is India's largest commodity derivatives exchange, where futures and options on metals, energy and bullion like gold, silver and crude oil are traded.
- Bullion MarketThe 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.
- 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.