India looks to cut out the middlemen on gold

MUMBAI, July 5, 2009 (AFP) – Gold has long had a special attraction for Indians. Loaded with cultural and religious significance, it is considered an auspicious metal and a visible sign of wealth and prosperity. Four refineries — two in Mumbai and two in Ahmedabad, in nearby Gujarat state — have already been approved. It is hoped to have 15 approved refineries by the end of the year.

Sinha’s aim, like that for other commodities traded in similar ways at the company, such as cotton, is to create a common domestic market, accessible across India to get a better price for the fabled Indian “common man”.

“Our pitch has been if you want this market to grow further, with integrity and credibility, you have to bring transparency into the system,” he explained. But trading in the sought-after commodity is now changing, as one company looks to secure a better deal for the millions of ordinary Indians who buy and sell the precious yellow metal for weddings and annual festivals.

National Spot Exchange Ltd, controlled by markets firm Financial Technologies India Ltd, has set up a new electronic system that looks to guarantee gold bullion prices and quality.

“What we’re trying to do is to create a