Leading commodity exchange NCDEX today announced the launch an "innovative" gold contract that it said will give a transparent and straightforward price benchmark of the yellow metal to the consumer.
The contract, GOLDHEDGE, is available for trading from tomorrow, NCDEX said in a release here.
"GOLDHEDGE is a new way to discover the price of gold in India. It is innovative and it is the right benchmark for the Indian market where gold touches every household and every pocket," NCDEX Managing Director and CEO Samir Shah said.
The contract has been designed as an intention-matching product, where delivery occurs only when both buyer and seller agree in advance on the quantity and location.
With no compulsion to give or take delivery of gold bars, an investor can ignore the landed cost of the precious metal, local taxes, as well as the premium being charged by sellers due to short supply in the domestic market.
Hence, GOLDHEDGE, by reflecting the true value of gold and offering the perfect hedge, provides an opportunity for investors to add gold to their portfolio as a financial asset, the release said.
"Our product is the perfect solution to the distortion in prices created by fluctuating demand-supply conditions, and takes forward the RBI's mission of finalisation of gold to reduce the burden of imports on the current account deficit," Shah said.
The unit of trading for GOLDHEDGE is one kg, with a ticket size of Re 1. The duration of the contract is for 1-4 months.