Indian Gold Buyers Turning To Hedging On Futures Market

As the price of gold has declined, gold dealers are taking advantage of futures contracts to lock in prices, according to an Economic Times report:

Physical delivery of gold in settlement of contracts, a key indicator of genuine hedging, rose to 2.7 tonnes in February, compared with 0.348 tonnes a year ago, data from the MCX, India's largest commodity exchange for bullion, showed.

That added demand is leading to a fragmented futures market becoming more organized. The newly-created Indian Commodity Exchange, according to its CEO, had 90% of its gold futures contract open interest from hedgers.