NCDEX launches gold delivery centre in Hyderabad

National Commodity and Derivatives Exchange Limited, NCDEX, today launched its fourth delivery centre in Hyderabad to facilitate settlement of forward contracts of gold being offered on its futures platform beginning last month.

The forward contracts are backed by 'Gold Now', a platform that acts as an online market for buying gold recycled in exchange-approved refineries. At present, three such refineries have a tie-up with the exchange and the contracts for both recycled and imported gold in 1 kg and 100 gram are being offered.

“We are getting good feedback on the new offering from consumers and jewellery associations since the price and standard of gold being offered through compulsory delivery contracts come with complete transparency and is benchmarked to the international markets,” Suresh Devnani, head -business development of NCDEX, said while announcing the launch of the Hyderabad delivery centre.

The exchange has already started its delivery centres in Delhi, Chennai and Ahmedabad and is about to launch two more centres in Mumbai and Jaipur respectively, according to Devnani. On whether the forward contracts being traded on the exchange would provide any price arbitrage compared with the unorganised markets, Devnani said it would only be known once the volumes pick up.

The forward contracts are in addition to the gold hedge and gold futures that were launched 16 months ago. The total traded value of the hedge and futures stood at Rs 37,564 crore till July 1, 2015, according to him. The NCDEX platform is expected to help bring gold held by domestic households into circulation reducing the dependence on further imports.