Page 23 - Bullion World Issue 1 May 2021

Bullion World | Issue 01 | May 2021

Structural Transformation in

India’s Gold Sector

Gold has always been an integral part
of the socio-economic-cultural ethos
of every Indian. As a commodity, it has
always carried with it the tendency
of invoking a sense of sentimental
attachment, making its consumption
and investment in India very different
from that of other countries. Despite
it's tremendous economic significance,
a holistic policy for gold remained
unfulfilled. These factors motivated
BSE to re-examine India's Gold product
framework and it's commitment to
formulate a case for building a gold
ecosystem.

BSE’s commitment fructified on 1
October 2018, when it became India’s
first universal exchange by adding
commodity derivatives to its portfolio.
The first product to be introduced was
Gold futures (1 KG), and subsequently
variety of gold futures contracts and
more commodities in the Bullion, Metals,
Energy and Agri Ecosystem. BSE offered
significantly greater convenience for
investors and traders, who are able
to trade in all asset categories from
a single account, reaping benefits
arising from enhanced competition Mr Sameer G. Patil
across all categories, thus creating
deeper markets with lower spreads and BSE
transaction charges.
LAUNCH OF BULLION
‘OPTIONS IN GOODS’

“ Despite With a view to further widen and deepen the commodity derivatives
markets, on the suggestion of BSE, framework to introduce ‘options on
its economic spot’ prices of commodities instead of futures prices was permitted.
significance, a holistic BSE launched the first ‘options in goods’ contracts on Gold mini
policy for gold and Silver kg based on spot prices from June 1, 2020, and has
received extremely positive response from all stakeholders. This led
remained unfulfilled. to the deepening and expansion of the bullion derivatives markets
This was what by permitting participants to give or take delivery of the underlying
motivated BSE to re- without getting into the futures contract at the time of expiry, a move
aimed at for the benefit of small and medium sized jewellers, traders,
examine India's Gold and bullion dealers.
policy framework
and formulate a
case for building a
” 23
gold ecosystem.