Commodity Market is about trading of precious metals, energy, oil, spices & so on.
Gold and other metals can be accessed in number of ways including traditional physical holdings, futures contracts, D-mat forms, ETFs and through correlated markets such as mining stocks. Each mode of holdings has its own advantages and disadvantages but with so many options available, investors of all types should be able to find a product to match their temperament.
Trading in commodities futures has a long history. However, organized trading on an exchange started in 1848 with the establishment of the Chicago Board of Trade (CBOT).
The first milestone in the 150 years rich history of organized trading in commodities in India was the constitution of the Bombay Cotton Trade Association in the year 1875. India had a vibrant futures market in commodities till it was discontinued in the mid 1960’s, due to war, natural calamities and the consequent shortages.
OUR EXPERT OPINIONs
Following the introduction of liberalization policy in 1991, the Government of India appointed an expert committee on forward market under the chairmanship of Prof. K. N. Kabra in 1993. The committee submitted its report in 1994 advocating the re-introduction of futures and expanding its coverage to agricultural commodities. It also proposed an expansion for the coverage of futures markets to minimize the wide fluctuations in commodity prices and for hedging the risk arising from extreme price volatilities.