Gold derivatives market crosses ₹2.2 lakh crore daily turnover: What’s driving the growth?

India’s gold derivatives market has crossed ₹2.2 lakh crore in average daily turnover, reflecting a sharp expansion in trading activity across gold futures and options. The growth points to the increasing financialisation of gold, with derivatives being used not only for trading but also for price discovery, risk management and investment.

Gold derivatives market expands

Gold derivatives were introduced on MCX in 2003, opening organised gold trading beyond traditional bullion dealers to retail investors, institutions and businesses seeking to hedge price risk. Since then, the market has expanded through futures, options, smaller contract sizes, indices and longer trading hours.

The latest MCX data shows the scale of this expansion. In FY2025-26, gold futures recorded an average daily turnover of ₹28,484 crore, up sharply from ₹8,449 crore in FY2024-25. Average daily futures volume rose to 23 tonnes from 11 tonnes during the previous financial year.

Gold options have seen an even more pronounced increase. Average daily notional turnover in options reached ₹1,93,564 crore in FY2025-26, compared with ₹28,148 crore in FY2024-25. Average daily options volume jumped to 156 tonnes from 36 tonnes over the same period.

Taken together, the futures and options figures put average daily turnover at about ₹2.22 lakh crore in FY2025-26, broadly matching the report’s assessment that India’s gold derivatives market has crossed the ₹2.2 lakh crore mark.

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What is driving the growth?

One major factor is the increasing use of derivatives for price discovery and hedging. Exchange-traded contracts provide a transparent price reference that can help participants make decisions around inventory, procurement, production and marketing. MCX gold prices are increasingly used as an India price reference across the physical gold market.

For jewellers, refiners, importers and bullion traders, derivatives can also help manage exposure to gold-price volatility. The report highlights inventory hedging as an important application, helping businesses bring greater certainty to cash flows and improve operational resilience.

More contract choices broaden participation

The market has also evolved through multiple contract sizes. MCX offers Gold contracts of 1 kg, 100 grams, 10 grams, 8 grams and 1 gram, allowing participants with different hedging and investment requirements to access the derivatives market.

MCX adopted India Good Delivery standards for all gold futures contracts by July 2026, while seven Indian gold refiners had been empanelled under the framework. The move is intended to make standards more relevant to Indian market participants and strengthen the link between physical gold and organised derivatives markets.

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What does the rising turnover signal?

The growth suggests that gold is increasingly being treated as a financial asset rather than only a physical store of wealth. The market’s average daily open interest stands at 43 tonnes, while around 175 tonnes of gold have been physically delivered through the exchange mechanism since inception.

The report sees further potential for Indian gold derivatives to strengthen domestic and regional price discovery, with deeper liquidity and wider participation potentially supporting India’s ambition to become a global gold hub.

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