The Securities and Exchange Board of India (SEBI) has announced a major change in the way gold and silver prices will be determined in India. Going forward, prices for these precious metals will be based on local market rates rather than the traditional benchmark rates set in London.
Shift from london Benchmarks
For decades, indian gold and silver prices have been influenced by international markets, particularly the london Bullion Market. This often caused domestic prices to fluctuate based on global events rather than local demand and supply.
With SEBI’s new directive:
- Gold and silver futures contracts on indian exchanges will reference local market rates
- Pricing will better reflect domestic supply and demand conditions
- Traders and investors will experience more transparency in pricing
Benefits for indian Investors
The move is expected to benefit:
- Retail investors: More predictable pricing based on local demand
- Jewelers and traders: Reduced dependency on international price swings
- Market stability: Better alignment with domestic consumption trends
SEBI believes this change will make the indian commodities market more robust and responsive to local economic conditions.
Implementation Timeline
- Exchanges are required to adopt the new pricing methodology within a specified timeframe
- Traders and investors will be informed of the exact procedure for settlement based on local rates
- SEBI will monitor the impact to ensure smooth transition
Implications for the Precious Metals Market
Experts note that this change could:
- Reduce volatility caused by global political or economic events
- Encourage greater participation in domestic gold and silver trading
- Align indian precious metals pricing with domestic consumption patterns
This policy shift is part of SEBI’s broader effort to strengthen India’s commodities market, making it more self-reliant and less dependent on global benchmarks.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
click and follow Indiaherald WhatsApp channel