Ace Commodity Exchange launches futures trading in gold hedge

Ace Derivatives and Commodity Exchange Ltd (Ace), a Kotak Mahindra Group anchored commodity exchange in India, today announced that it has commenced trading in gold hedge futures contract effective today.
Ace has currently launched 3 contracts- expiring in the months of May, July and September 2014. The trading unit for the contract is 1 kg and the tick size is Re 1, ACE said in a statement.
Gold hedge is an intention matching contract, and the contract basis centre is ex-Ahmedabad. The price is inclusive of taxes and levies relating to import duty, customs but excluding sales tax/ VAT, it said.

The USP of the gold hedge contract is that the price quotation is inclusive of import custom duty and hence it provides a real opportunity for all the market participants to hedge their price exposure, including that arising from duty flactations.
"Gold hedge futures contract would mirror the prices of gold prevalent in the international market and inclusion of customs duty would provide an efficient price risk hedging mechanism for all the market participants. The expiry of gold hedge contract is aligned with currency futures expiry which mitigates the currency volatility risk as well," Ace Commodity Exchange CEO Dilip Bhatia said.