Gold Ten (10g) Futures to Begin Trading on MCX from April 1

The Multi Commodity Exchange of India (MCX), the country’s leading commodity exchange, has announced the introduction of Gold Ten (10 gram) futures contracts effective April 1, 2025. This move is expected to offer a structured and efficient platform for market participants to hedge their bullion positions and trade in gold at a lower unit size.

These contracts will be available for trading with expiry months of April 2025, May 2025, and June 2025, aligning with MCX’s existing bullion contract framework. The launch comes at a time when gold prices are trading at record-high levels, with MCX gold nearing ₹90,000 per 10 grams. 

Gold Ten Futures Contract: Key Specifications

Trading Unit and Price Quotation

• Symbol: GOLDTEN
• Trading Unit: 10 grams
• Price Quote: Ex-Ahmedabad (inclusive of import duties and levies, but excluding GST and other applicable taxes)

Order Size and Tick Size

• Maximum Order Size: 10 kg
• Tick Size: ₹1 per 10 grams

Daily Price Limits

• Initial Price Limit: 3%
• Extended Limits: 6% and further to 9% in case of high volatility

Margin Requirements

• Initial Margin: Minimum 6% or as per the SPAN margining system
• Extreme Loss Margin: 1%
• Delivery Period Margin: Higher of 3% + 5-day 99% VaR of spot price volatility or 25%

Trading Period and Open Position Limits

Trading Hours

• Monday to Friday: 9:00 a.m. to 11:30/11:55 p.m. (based on US daylight saving time changes)

Maximum Open Position

• For Individual Clients: 5 metric tonnes (MT) or 5% of market-wide open positions, whichever is higher
• For Member Firms (collective clients): 50 MT or 20% of market-wide open positions, whichever is higher

Delivery Mechanism and Purity Standards

MCX has introduced a compulsory delivery mechanism for Gold Ten futures, ensuring physical settlement at designated clearinghouse facilities.

• Primary Delivery Centre: Ahmedabad
• Additional Delivery Centres: New Delhi, Mumbai
• Purity Standards: 999 fineness
• Approved Sources: LBMA-certified refiners or MCX-approved domestic refiners

A staggered delivery period begins 5 trading days before expiry, allowing traders to indicate their delivery preferences. If no preference is stated, the position is automatically marked for compulsory delivery upon contract expiry.

Final Settlement Price Determination

On expiry, the Due Date Rate (DDR) will be derived from the Ahmedabad spot price for 10 grams of gold (995 purity), adjusted for 999 purity. In cases where the spot price is unavailable due to unforeseen circumstances, the MCX Clearing Corporation will follow its prescribed guidelines for determining the final settlement price.

Conclusion: Potential Impact on the Bullion Market

The launch of Gold Ten futures on MCX is expected to enhance liquidity and participation in the bullion segment. The contract structure provides traders and investors with a cost-effective, smaller unit alternative to traditional gold futures, while also offering an efficient hedging mechanism.

With gold prices at all-time highs, this contract allows both retail and institutional investors to participate in gold price movements, diversify their portfolios, and manage price volatility risks effectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.