India may soon fix gold prices for global market(Lead)April 21st, 2008 - 8:35 pm ICT by admin
Mumbai, April 21 (IANS) India, one of the leading gold consumers in the world, may soon manage to move from being a mere “price taker” to a “price maker” in the world of royal metal. Tired of the wild fluctuations of gold price in the London Bullion Market and its impact on Indian market, Bombay Bullion Association (BBA), in collaboration with Bombay Stock Exchange (BSE), National Multi-Commodity Exchange (NMCE), IT People (India) Ltd and Reliance Money Ltd, has decided to set up its own trading platform for gold.
Though the representatives of the respective partners of the proposed joint venture (JV) denied that the decision had, “anything to do with the recent pole-vaulting of gold price”, they agreed with the the fact that “it’s time we moved from price taker to price maker”.
Asked whether the yet-to-be formed limited company has obtained the requisite permission from the authorities including the Reserve Bank of India (RBI), director and CEO of Reliance Money Sudip Bandyopadhyay said here Monday: “We have not approached them so far but we will be intimating the authorities for necessary clearances. After all, we want to launch it in a month’s time.”
Talking about the trading platform, Bandyopadhyay said the Bullion Spot Market (BSM) will be an over the counter bullion trading platform which would “help jewelers not only in monitoring the international bullion price fluctuations on real time basis, but will also facilitate retail investors in the purchase of gold coins and bars”.
The price fluctuation was a thorny issue for the gold traders. Though India was a leading consumer of gold, a “total helplessness” has gripped the traders in controlling the prices, he added.
Suresh Hundia, president of BBA, said: “That is one of the reasons why because we are launching such a platform. In the proposed platform, we will focus on setting up the gold in line with the blobal market cues.”
“Moreover, it is not just the trading platform which we plan to launch. We also want to set up a hallmarking centre so that it would help us in determining the prices of both gold and silver, the way it is being done in the AM/PM system in London,” he added.
Talking about the functioning of the trading platform, Bandyopadhyay said: “The company itself will not deal with trading but it will just provide a platform, whereby the gold could be purchased and sold off via online and be handled by the IT People, while BSE along with NMCE would look into the global variations and provide the link-up required with the commodities market.”
Talking about the physical distribution, Bandyopadhyay said it would be done through various centres. “As far as we are concerned, we will contribute through our strong retail presence with over 10,000 plus outlets spread across 5,000 towns. In nutshell, we would help retail investors in purchasing gold from IT People providing technical knowledge for the exercise,” he said.
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