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The country's premier commodity exchange Multi Commodity Exchange of India Ltd (MCX) has launched 1 gram gold contract namely Gold Petal futures contract, which is primarily launched targeting small traders. Already there are many such contracts developed by MCX like Gold (1 Kg), Gold Mini (100 grams) and Gold Guinea (8 grams).

The trading unit of the gold contract is 1 gram and the initial margin required to trade will be 4%, which would be around Rs.100, based on current market price of Rs.2100. The delivery of contract is possible in dematerialised or physical form, but the minimum quantity has to 8 gm.The physical delivery is available in multiples of eight gram coins with London Bullion Manufacturers Association (LBMA) certified 999 purity. The delivery centers are G4 Securitas at Mumbai, and other major cities.

There are many Gold ETFs like Gold Bees by Benchmark funds and many other ETFs by various fund houses like Reliance, HDFC available. Small investors can take the route of ETFs rather than the current product by MCX, since this would lead them to margin trading. This is because many are unaware of the risks involved in margin trading and their consequences of it.

Hence it is better to buy gold only through ETFs. Be a wise investor !

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The country's premier stock exchange NSE (National Stock Exchange), has launched a new website in the interest of small investors to spread awareness and benefits of buying gold exchange traded funds (ETFs).In 2007, there was only one Asset Management Company (AMC), Benchmark Fund offering Gold ETF,(Gold Bees) in the market. As on date, there are more than 10 AMCs offering Gold ETFs and investing in them is getting more and more popular and easier.

Gold ETF is gold in an electronic form and it is just like buying shares of any company through a broker. Through Gold ETFs, one can even buy just one gram or half a gram of gold at a time. Gold prices had risen more than 20 per cent compounded annual growth rate (CAGR) since April 2007. While 10 gm of gold cost Rs. 9,357 in April 2007, it is now priced at over Rs 20,000.

To know more about Gold ETFs, you can read it here at Gold ETFs and Nse's website NseGold.

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