A 2.5 per cent margin increase in silver on the Multi Commodity Exchange (MCX) effective August 16 kept a section of traders away from the current volatile market.
Consequently, the total turnover of the white metal for delivery in September nosedived 11 per cent to Rs 962.57 crore on Monday (till 5 pm) in comparison with Rs 1081.91 crore on the previous working day — Thursday.
The futures market remained closed on Friday on the occasion of Independence Day.
The exchange called for additional margin to protect the interests of all four parties in the trade, that is, the exchange, traders, brokers and members, in case price turns highly volatile. Generally, additional margin is called for to discourage traders from trading with a fear of heavy losses.
The volume of trade also slipped marginally to 4,90,410 kg on Monday from 5,01,240 kgs on Thursday. Interestingly, traders’ sentiments remained upbeat on Monday with open interest (non-executed orders) recorded at 3,29,160 kg, a rise from 3,26,580 kg on Thursday.
“Bullion traders were, however, keen on re-building their positions on lower levels as prices on the exchange showed the global decline. Therefore, they ignored the additional margin call on silver and booked heavily to cut past losses,” a bullion trader said.
Silver price for September delivery slumped to Rs 19,588 a kg from its Thursday’s level of Rs 20,764 a kg, however, recovered from Rs 19,335 a kg on Saturday.
In the global markets, silver marginally recovered to $13.01 an ounce on Monday afternoon from Rs 12.82 an ounce on Friday. The price still shows a drastic decline of about $1.86 from Thursday’s close at $14.86 an ounce. In the Mumbai physical market, silver slipped on Monday to Rs 20,670 a kg as compared to Rs 22,345 a kg on Thursday.
India’s largest commodity exchange, however, kept the margin in gold unchanged at 6 per cent despite the volatile global prices. The volume of trade on Monday was recorded at 27,080 kg from 22,415 kg and 8,510 kg respectively on Thursday and Saturday.
As gold prices remained rangebound for near-month delivery to close at Rs 11,351 per 10 gm on Monday as compared to Rs 11,466 per 10 gm on Thursday and Rs 11,258 per 10 gm on Saturday.
In the spot Mumbai market, gold closed with a marginal decline of Rs 250 with pure and standard variety of yellow metals ended the day at Rs 11,470 (Rs 11,750) per 10 gm and Rs 11,410 (Rs 11,680) per 10 gm respectively.
