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Gold will be traded in the form of EGRs and will help create a transparent domestic spot price discovery system. The EGR platform brings transparency to real-time gold transactions. enabling India to emerge as a bullion pricing country. Moreover, it eliminates the inefficiency of gold in the existing market. The EGR platform can provide greater assurance on the quality of gold delivered, efficient price discovery and transparency in transactions.
All commercial partners in the chain such as buyers and sellers on the exchange, individual investors, importers, banks, refiners, bullion traders, jewelers, retailers can invest in EGR. Gold should first be converted into a demat account similar to share trading, and then investors can trade in gold using the receipt. This gold will be in the vaults and the manager will provide the EGR.
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Gold is available in 10 grams and 100 grams. Delivery of 10 grams of gold can be in the form of a bar or a coin. 100 grams of gold is delivered in one bar only. There are EGR vaults at 22 locations in India. Brinks India and Sequal Logistics will deliver the gold door to door from these vaults.
BSE received in-principle approval from SEBI in February. Since then the exchange has conducted several mock trading sessions in the current environment to facilitate trading in EGRs for its members. India is the second largest consumer of gold globally. Annual gold demand in India is around 800-900 tonnes. Also India occupies an important position in the global market. Although second only to China, India remains a major player in the global market in terms of gold consumption.
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