MCX Gold: How Domestic Gold Futures Work
Contract sizes, expiry, margin and settlement — and why the futures price is not the same as the rate at your jeweller.
The Multi Commodity Exchange (MCX) runs India's main exchange-traded gold contracts. Futures prices are widely quoted in market coverage, so it helps to know what they represent.
What a futures contract is
An agreement to buy or sell a standardised quantity of gold, of specified purity, at a set future date. MCX lists several contract sizes — a full-size contract plus smaller variants designed for lower ticket sizes — each with defined lot sizes, tick sizes and expiry cycles.
Why the futures price differs from the spot rate
A futures price incorporates the cost of carrying the metal to expiry: financing, storage and insurance. So it usually trades at a modest premium to spot, and that premium narrows as expiry approaches.
It also differs from what a jeweller quotes, because the retail rate adds the local physical premium and the retail bill adds making charges, wastage and GST.
Margin and leverage
Futures are traded on margin — a fraction of contract value posted as collateral. That leverage cuts both ways. Adverse moves trigger mark-to-market losses and margin calls, and exchanges can raise margin requirements during volatile periods.
Settlement
Contracts can be settled in cash or, for specified contracts, by physical delivery against exchange-approved vaults and quality standards. Most retail participants close positions before expiry rather than take delivery.
Who should actually use them
Futures are designed for hedgers — jewellers, refiners, importers managing genuine price risk — and for experienced traders. For someone who simply wants gold exposure, ETFs, gold funds or physical purchase are the appropriate routes. Leverage is not a feature you want if you are not managing it deliberately.
Educational information only, not trading advice. Contract specifications change; check the exchange for current terms.
Disclaimer: Rates are indicative and may vary based on market conditions, local premiums, taxes, jewellery making charges and other applicable charges.