Traders deliver gold on MCX at a profit

MUMBAI: Finding it hard to push their stocks of gold in the spot market because of low demand for jewellery and other forms of the metal recently, smart bullion dealers and traders delivered gold bars on commodity bourse MCX at a profit in the December contract that expired on Friday.

Traders on MCX had delivered 1,031 kilos of gold worth Rs 270.6 crore till Wednesday. Data on delivery, if any, on the last two days was not released by the bourse till the time of writing this report on Friday.

On Monday, traders had delivered 95 kilos of gold at Rs 26.5 lakh a kilo. On the following two days, they sold 846 kilos at Rs 26.2 lakh/kg and 90 kilos at Rs 26.5 lakh/kg. Delivery in the October contract – gold contract on MCX is bi-monthly – was 2,783 kilos, the highest in five years, worth Rs 746 crore.

Market participants said traders made a neat profit by selling gold at a costlier rate than its settlement price.

Ketan Shroff, MD at Mumbaibased refiner and bullion dealer Penta Gold, said premium on gold charged by banks and other nominated agencies in the spot market was $10 an ounce (32 gms) 10-15 days ago, which fell to $1-2 an ounce around the delivery period on MCX. “Since the futures price trades at a premium to the spot market price, the traders contracted to sell gold earlier at a higher price on the futures market than the rate at which the contract settled, thereby making aprofit,” Shroff said.

The December contract, which began on June 6, gyrated between a high of Rs 28,749 per 10 gm (less 1% VAT) and a low of Rs 25,461 on November 6.

Gold demand has fallen in recent times, according to leading jewellery companies, including Tanishq, because of high price volatility.