Jewellers' body alleges silver price manipulation

MUMBAI/NEW DELHI: All India Jewellers & Goldsmith Federation (AIJGF) has written to the finance minister alleging insider trading in derivatives contracts on silver on MCX as there are talks about import duty hike on the white metal.MCX said it has a robust surveillance mechanism in place and functions as per the regulatory norms.In an unrelated development, silver and gold ETFs, on the exchanges, fell about 20% in early trades Thursday but closed about 11% lower. On the MCX, in late trades, silver contracts for March delivery was 2.7% lower while gold for Feb delivery was down 0.8%.The AIJGF letter dated Jan 21 and signed by two of its office bearers, Pankaj Arora, national president, and Nitin Kedia, national general secretary, alleged that on MCX, silver contracts on that day traded at about Rs 40,000 (per kg) premium to "the prevailing benchmark/spot-linked parity".

They alleged that the "sharp and sudden dislocation" was "widely attributed in the market to rumours of an impending import duty hike on silver".An MCX spokesperson told TOI: "Silver markets are experiencing heightened volatility due to evolving geopolitical developments, which along with local fundamentals have been reflected in the domestic market. Prices discovered on MCX provide a hedge against currency movements, duties and local market dynamics."