National Stock Exchange to set up new exchange for spot gold

The National Stock Exchange (NSE) has announced its plans to set up a domestic spot gold exchange in collaboration with India Bullion and Jewellers Association Ltd. The new exchange will be overseen by the market regulator Securities and Exchange Board of India (SEBI).

The collaboration aims to bring efficiency and transparency to bullion pricing in India. Advanced discussions are on to close the shareholder structure, according to a Livemint report.

“This exchange shall bring in efficiency as well as transparency in the price discovery of bullion,” NSE Managing Director and CEO Vikram Limaye said in a statement.

The collaboration is set to bring a platform for industry players for spot market bullion transactions and will act as a step in the direction of allowing consumers and investors to directly participate on the exchange platform. The exchange will allow jewellers, retailers, refiners and banks to trade over a regulated platform.

The date of launch or the date when the exchange will start operating has not been specified by the NSE.

“This exchange is conceptualised taking into consideration the industry requirements and will integrate transactions of bullion dealers, jewellers, retailers and consumers on one single platform,” Prithviraj Kothari, National President, IBJA, said as reported by Livement.

China, the top consumer of gold, also operates a similar exchange where all domestic production and imported gold is bought and sold.

India is the second-largest consumer of gold. India’s demand for gold in 2021 stood at 797.3 tonne, which was worth around $46.1 billion, according to the World Gold Council (WGC).

Currently, the RBI allows some domestic banks to import gold which is then purchased by bullion dealers and further sold to jewellers before going to retail. This will be the first time that a domestic bullion spot exchange is being set up.

Courtesy: CNBCTV18