GOLDGOLD

INTRODUCTION

APPLICATIONS

MARKET CHARACTERISTICS

INDIAN SCENARIO

GLOBAL SCENARIO

= Gold (Chemical Symbol-Au) is primarily a monetary asset and partly a commodity.

= Gold is the world's oldest international currency.

= Gold is an important element of global monetary reserves.

= With regard to the investment value, more than two-thirds of gold total accumulated holdings is with central banks' reserves, private players, and held in the form of jewellery.

= Less than one-third of gold's total accumulated holdings are used as “commodity” for jewellery in the

western markets and industry.

Gold has a long and fascinating history of use in a diverse range of industries and applications. In each of the applications it is used, gold provides outstanding performance due to its unique technical properties. Gold is also material of choice in medicine and dentistry as a consequence of its biocompatibility and in recent years it has emerged as a key nanomaterial. Global demand for gold is centered on four primary categories: jewellery, investment, central bank reserves and technology.

= The gold market is highly liquid. Gold held by central banks and other major institutions and in the form of retail jewellery is reinvested in the market.

= As the stock of gold, outweighs its demand, it is argued that the core driver of the real price of gold is stock equilibrium rather than flow equilibrium.

= Effective diversification during “stress” periods: Traditional methods of portfolio diversification often fail when they are most needed, that is during financial “stress” (instability). On these occasions, the correlations and volatilities of return for most asset classes (including traditional diversifiers, such as bonds and alternative assets) increase, thus reducing the intended “cushioning” effect of a diversified portfolio.

India, world’s largest market for gold jewellery and a key driver of the global gold demand. The domestic drivers of gold demand are largely independent of outside forces. Indian households hold the largest stock of gold in the world. Two thirds of the Indian demand for gold comes from the rural parts of the country. In 2012, gold's role as an inflation hedge bolstered its appeal in India. India imported around 850 metric tonne (MT) of gold in 2012.

= London is the world’s biggest clearing house.

= Mumbai is under India's liberalised gold regime.

= New York is the home of gold futures trading.

= Zurich is a physical turntable.

= Istanbul, Dubai, Singapore, and Hong Kong are doorways to important consuming regions.

= Tokyo, where TOCOM sets the mood of Japan.

The Multi Commodity Exchange of India Limited (MCX) is a India-based state-of-the-art electronic commodity futures exchange that facilitates online trading, and clearing and settlement of commodity futures transactions, providing a platform for risk management. MCX offers trading in more than 40 commodity futures contracts across segments including bullion, ferrous and non-ferrous metals, energy, and agricultural and agri-based commodities.

For private circulation only.

MCX is a leading

commodity exchange in India, with a

market share of 87%*

(Q3 FY 2012-13)*In terms of the value of commodity

futures contracts traded (Source: Data maintained by FMC)

www.mcxindia.com

DEMAND AND SUPPLY

= World investment amounted to 1614 MT in 2012, broadly flat year-on-year, but the approximate value of this demand reached a new record of almost $87 billion.

= Major drivers of this strong investment included further monetary loosening in the developed world, continued sovereign debt crisis, rising longer-term inflation fears and in key markets, negative real interest rates coupled with limited attractive risk-free investment alternatives to gold.

= In 2012, the gold mine production increased by 12 MT to 2848 MT and the combined demand for bars & coins dropped from 1515 MT to 1256 MT.

Source: GFMS Ltd, WGC

Top Ten Producing Countries 2011 (in MT)

China

USAAustralia

South Africa

Russia

Peru

Canada

Indonesia

Ghana

Uzbekistan

355

270

237200

190

150

110

100

10090

1. Provisional.2. Jewellery fabrication. The quarterly data differ from those for jewellery consumption shown in Table 1. Fabrication is

the first transformation of gold bullion into semi-finished or finished product. Jewellery consumption is equal to fabrication plus/minus jewellery imports/exports plus/minus stocking/destocking by distributors and manufacturers.

3. This includes institutional investment (other than ETFs and similar), stock movements and other elements as well as any residual error.Data in this table are consistent with those published by Thomson Reuters GFMS in their Gold Survey but adapted to the WGC’s presentation and take account of the additional demand data now available.Source: LBMA, Thomson Reuters GFMS, World Gold Council.

Demand and Supply

World SupplyMine Production 2,836 2,848Net Producer hedging 11 -20Total mine supply 2,847 2,828Recycled Gold 1,669 1,626Total Supply 1129 1059

World Demand 4,515 4,453

Fabrication2Jewellery 1,972 1,908

Technology 453 428Sub-total above fabrication 2,425 2,336Total bar and coin demand 1,515 1,256ETFs and similar 185 279Official sector purchases 457 535Gold demand 4,582 4,405

3OTC Investments and stock flows -67 48Total Demand 4,515 4,453

London PM fix (US$/oz) 1571.52 1668.98

2011 (IN MT)

12012(IN MT)

Globally, MCX is No.1 in gold

and silver, No.2 in

natural gas, and No.3 in crude oil*

*In terms of the commodity futures contracts traded during CY 2011 (Source: Websites of exchanges

and FIA data)

www.mcxindia.com

Source: GFMS Ltd, WGC

Country Gold Holding (in MT) % of Forex ReservesUnited States 8134 75.6Germany 3391 72.7Italy 2452 72.2France 2435 69.2China 1054 1.7Switzerland 1040 10.5Russia 958 9.8Japan 765 3.2Netherlands 613 59.2India 558 9.9

Top Ten Gold Holding countries vis-à-vis their Gold holding as a % of Forex Reserves, December 2012

FACTORS INFLUENCING THE MARKET

= Above ground supply of gold from central bank's sale, reclaimed scrap, and official gold loans.

= Hedging interest of producers/miners.

= World macroeconomic factors such as the US Dollar, interest rate and economic events.

= Commodity-specific events such as the construction of new production facilities or processes, unexpected

mine or plant closures, or industry restructuring.

= In India, gold demand is also determined to a large extent by its price level and volatility.

Jewellery consumption 1972.1 1908.1 -3.25

Industrial & dental 452.9 428.2 -5.45Electronics 319.9 302.7 -5.38Other Industrial 89.6 85.7 -4.35Dentistry 43.4 39.9 -8.06

Investment 1700.4 1534.6 -9.75Total bar and coin demand 1515.4 1255.6 -17.14Physical Bar demand 1182.4 941.1 -20.41Official Coin 245.2 201.1 -17.99Medals/Imitation Coin 87.8 113.4 29.16

ETFs & similar products 185.1 279 50.73Official sector purchases 456.8 534.6 17.03Gold demand 4582.3 4405.5 -3.86

London PM Fix (US$/oz) 1571.5 1669 6.20

Source : GFMS Ltd. WGC* Provisional

End-Use Gold Demand (in MT)

World Gold Holdings December 2012

8134

33912814

2452

2435

1054

1040958 765

613558

United States

Germany

IMF

Italy

France

China

Switzerland

Russia

Japan

NetherlandsIndia

Source: GFMS Ltd, WGC

(in MT)

% changes 2012 vs 20112012* 2011CATEGORY

MCX reaches out to over

1,770 cities and towns in India

through 3,46,000+

trading terminals (including CTCL)

(as of Q3 FY 2012-13)

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MCX International

Weight Conversion Table

BENEFITS OF TRADING ON MCX

MEASUREMENT

IMPORTANT WEB SITES

= India's no. 1 commodity exchange to trade in bullion futures.

= Highly liquid contracts.

= Deliverable contracts with internationally accepted gold bars.

= Flexibility to choose from four different contract sizes—Gold (1 kg), Gold Mini (100 grams), Gold Guinea (8 grams), Gold Petal(1gram) and Gold Petal Delhi(1gram)—that best meets the needs.

= Highly efficient and transparent market.

Troy ounces Grams 31.1035Million ounces Tonnes 31.1035Grams Troy ounces 0.0321507Kilograms Troy ounces 32.1507Tonnes Troy ounces 32,150.70Kilograms Tolas 85.755Kilograms Taels 26.7172Kilograms Bahts 68.41Troy ounces Grains 480.00Troy ounces Avoirdupois ounces 1.09714Troy ounces Penny weights 20.00Avoirdupois ounces Troy ounces 0.911458Short tonne Metric tonne 0.9072

Gold purity is measured in terms of karat and fineness:

= Karat: pure gold is defined as 24 karat

= Fineness: parts per thousand

Thus, 18 karat = 18/24 of 1,000 parts = 750 fineness

www.gfms.co.uk | www.lbma.org.uk | www.nymex.com | www.tocom.com.jp | www.gold.org |www.kitco.com

www.dmcc.ae | www.iab.gov.tr | www.usagold.com

To convert from To Multiply by

www.mcxindia.com

MCX - International Correlation

MCX is the first commodity exchange in

India to launch mini futures contracts in

various commodities

www.mcxindia.com

CONTRACT SPECIFICATIONS OF GOLD

Symbol GOLD

Description GOLDMMMYY

Trading period Monday through Saturday#Trading session Monday to Friday: 10:00 am to 11:30 pm

Saturday: 10:00 am to 2:00 pm

TRADING

Trading unit 1 kg

Quotation/Base value ` / 10 grams

Price quote Ex-Ahmedabad (inclusive of all taxes and levies relating to import and customs duty, but excluding sales tax and VAT, and any other additional tax or surcharge on sales tax, local taxes, and octroi)

Maximum order size 10 kg

Tick size `1 / 10 grams (minimum price movement)

Daily price limit The base price limit will be 3%. Whenever the base daily price limit is breached, the relaxation will be allowed upto 6% without any cooling off period in the trade. In case the daily price limit of 6% is also breached, then after a cooling off period of 15 minutes, the daily price limit will be relaxed upto 9%. In case price movement in international markets is more than the maximum daily price limit (currently 9%), the same may be further relaxed in steps of 3% with the approval of FMC.

Initial margin 4%

Additional and/or In case of additional volatility, an additional margin (on both buy-side and sell-side) and/or special margin (on either buy-side or sell-side) at such percentage, as deemed fit, will be imposed in respect of all outstanding positions.

Maximum allowable For individual client: 2.5 MT (for all gold contracts combined together)

For a member collectively for all clients:12.5 MT or 15% of the market’s open position, whichever is higher

DELIVERY

Delivery unit 1 kg

Delivery period margin 25% of the value of the open position during the delivery period

Delivery center(s) Ahmedabad and Mumbai at designated Clearing House facilities of Group 4 Securitas at these centers and at additional delivery centers at Chennai, New Delhi and Hyderabad.

Delivery logic Compulsory

QUALITY SPECIFICATIONS

995 purity It should be serially numbered gold bars supplied by the LBMA–approved suppliers or those suppliers, as may be approved by MCX, to be submitted along with the supplier’s quality certificate.

999 purity If a seller offers a delivery of 999 purity, the seller will get a proportionate premium, and the sale proceeds will be calculated in the manner of rate of delivery * 999/995.

Less than 995 Rejected

#: Day light timing 10:00 am to 11:55 pm (Winter)

Note: Please refer to the exchange circulars for the latest contract specifications and delivery and settlement procedures.

Special margin

MCXCOMDEX is India’s first

real time composite commodity

futures price index

CONTRACT SPECIFICATIONS OF GOLD MINI

Symbol GOLDM

Description GOLDMMMYY

Trading period Monday through Saturday#Trading session Monday to Friday: 10:00 am to 11:30 pm

Saturday: 10:00 am to 2:00 pm

TRADING

Trading unit 100 grams

Quotation/Base value ` / 10 grams

Price quote Ex-Ahmedabad (inclusive of all taxes and levies relating to import duty and customs, but excluding sales tax/VAT, any other additional tax or surcharge on sales tax, local taxes, and octroi)

Maximum order size 10 kg

Tick size `1 / 10 grams (minimum price movement)

Daily price limit The base price limit will be 3%. Whenever the base price daily price limit is breached, the relaxation will be allowed upto 6% without any cooling off period in the trade. In case the daily price limit of 6% is also breached, then after a cooling off period of 15 minutes, the daily price limit will be relaxed upto 9%. In case price movement in international markets is more than the maximum daily price limit (currently 9%), the same may be further relaxed in steps of 3% with the approval of FMC.

Initial margin 4%

Special margin In case of additional volatility, an additional margin (on both buy-side and sell-side) and/or special margin (on either buy-side or sell-side) at such percentage, as deemed fit, will be imposed in respect of all outstanding positions.

Maximum allowable For individual client: 2.5 MT (for all gold contracts combined together)

For a member collectively for all clients: 12.5 MT or 15% of the market’s open position, whichever is higher

DELIVERY

Delivery unit 100 grams

Delivery period margin 25% of the value of the open position during the delivery period

Delivery center(s) At designated clearing house facilities of G4S Cash Services (I) Pvt. Ltd. at Ahmedabad and at additional delivery centers in Mumbai, Chennai, Delhi/New Delhi and Hyderabad

Delivery logic Compulsory

QUALITY SPECIFICATIONS

995 purity It should be serially numbered gold bars supplied by the LBMA–approved suppliers or those suppliers, as may be approved by MCX, to be submitted along with the supplier’s quality certificate.

999 purity If the seller offers delivery of 999 purity, the sel ler wi l l get a proportionate premium, and the sale proceeds will be calculated in the manner of rate of delivery * 999/995.

Less than 995 Rejected

www.mcxindia.com

#: Day light timing 10:00 am to 11:55 pm (Winter)

Note: Please refer to the exchange circulars for the latest contract specifications and delivery and settlement procedures.

MCX has strategic

alliances with several

commodity exchanges of

the world

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Multi Commodity Exchange of India LimitedExchange Square, Suren Road, Chakala, Andheri (East), Mumbai 400 093 | Tel. no.: +91-22-6731 8888 | Email: info@mcxindia.com | Website: www.mcxindia.com

Customer Support: +91-22-6649 4040 | To get the latest futures prices on mobile: visit http://m.mcxindia.com or sms “MCX <Commodity name>” to 58888