The National Stock Exchange is set to expand its commodity derivatives portfolio with the launch of Gold 10 grams futures starting March 16. This follows official approval from the Securities and Exchange Board of India (SEBI) and is designed to attract a broader base of retail investors who prefer smaller, more manageable contract sizes. The new contract features a monthly, delivery-based structure. To ensure market stability and risk management, the exchange has established defined price limits and margin requirements. Settlement for these contracts will be based in Ahmedabad, providing a standardized physical delivery mechanism for participants. This launch comes at a time of significant activity in the bullion market. Domestic gold prices in India have recently reached historic levels, with spot prices for 10 grams of 24-carat gold trending near 94,630 INR. This represents a substantial rise from 2024 levels, driven by global safe-haven demand and a weaker rupee. The broader market environment shows a clear shift in consumer behavior. While record-high prices have dampened traditional jewellery sales by an estimated 20% to 30%, investment demand has surged. Gold ETFs and digital gold products have seen record-breaking inflows, with ETF assets in India reaching historic peaks of over 116 billion INR in recent months. To further improve liquidity and reduce the cost of trading, both the MCX and NSE recently withdrew additional margins on gold and silver futures. Specifically, a 3% additional margin on gold was removed effective February 19, making it more capital-efficient for hedgers and speculators to enter the market. Analysts note that the combination of the new 10-gram contract and lowered margin requirements could significantly boost retail volumes. As international spot gold tests the 3,000 USD per ounce threshold, Indian investors are increasingly looking for transparent, exchange-traded instruments to hedge against inflation and currency volatility. The NSE’s entry into this segment provides a competitive alternative to existing commodity platforms. By focusing on a 10-gram denomination, the exchange is directly addressing the needs of smaller investors who find the traditional 1-kilogram contracts too capital-intensive. Market participants should watch for the official contract launch on March 16 to observe the initial liquidity and price discovery patterns. This move is expected to integrate the physical bullion market more closely with financial derivatives, offering a robust platform for both investment and delivery.