Indian government planning national gold spot exchange

Mumbai-India (Feb 4)  India’s government are beginning planning work for a national gold spot exchange, which would regulate the price of gold and the gold trade as a whole straight from import.

Such electronic systems already exist in places like the UK and China, with the London Bullion Market Association and the Shanghai Gold Spot Exchange responsible for each nation’s gold regulation.

The idea of an Indian gold spot exchange was proposed in last year’s budget, and work is finally beginning on how to establish such an enterprise. At present the gold price is set by the Indian Bullion Jewellers Association, but this is not a true spot price, even though it does provide a daily fi price for Sovereigns and gold bonds.

Two organisations have come forward to offer their services in the process: the Bombay Stock Exchange and the Multi Commodity Exchange. The exchanges propose to run a Good Delivery platform for trade. Both organisations are overseen by the government branch Sebi, the Securities and Exchange Board of India, and there is some expectation that the board would oversee any newly established gold spot exchange in the same fashion.

The next step for India is to establish a company to run the spot exchange. This financial institution will likely be government-owned to start with, rather than a joint venture with private enterprise, but the usual operating practices of such exchanges would see private firms able to pick up a stake after a set amount of time.

BullionByPost

Silver Phoenix Twitter                 Silver Phoenix on Facebook