Indian jeweler moves 12 tons gold hedges to MCX futures
A well-known Indian jeweler just switched about 12 tons of gold hedged positions from GIFT City to the Multi Commodity Exchange (MCX).
Instead of dollar-based contracts, they're now using rupee-based ones, which makes more sense for gold bought in India.
This move has sparked a big jump in activity on MCX's gold futures.
October MCX open interest at 6,367
MCX contracts are priced closer to what people actually pay for gold here, thanks to a 15% customs duty and rupee pricing, unlike GIFT City's international dollar-linked deals.
Since July 1, open interest for MCX's October contract shot up from 869 to 6,367, and the OI for the December contract was 40 on July 7 and surged to 4,916 by July 17.
The jeweler is moving away from dollar-based contracts and toward rupee-based MCX contracts, making gold trading smoother and better matched with India's market.