FMC hikes position limits in gold contracts

The commodity markets regulator has asked the Multi Commodity Exchange (MCX) to increase the maximum positions that can be taken at an individual or member level for new gold contracts, without giving any reason.

The Forward Markets Commission (FMC) wants to hike the allowable position for an individual client to 2.5 tonnes from 2 tonnes, and increase the member position limit to 12.5 metric tonnes or 15% of market wide open positions, whichever is higher, from 6 tonnes.

"You (the MCX) are requested to launch bullion contracts as per the contract launch calendar and post the details of the approved contracts immediately," said the FMC in a statement posted on its website.

The MCX will launch its new gold February 2013 contract in early June, while the exchange has started trade in August gold mini contract on May 7 with new specifications.