Silver Price: Strength in Gold and Silver Drives MCX to Record Highs

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Mumbai: (MCX) stock soared to all-time highs as gold and silver futures volumes soared.

The stock hit an all-time high of Rs 1,792 on Wednesday and is heading towards Rs 2,000 by the end of the year as the medium-term outlook remains strong, analysts said.

Gold futures on the exchange hit a record high of Rs 52,435 per 10g and silver a multi-year high of Rs 67,600 per kg.



MCX posted a 29% rise in net profit for the quarter ended June. Its average daily turnover this month stands at Rs 35,000 crore, compared to Rs 31,800 crore in July 2019. The average daily turnover for the first quarter was around Rs 23,000 crore.

The weak outlook for the U.S. dollar has improved dollar-denominated commodity price trends, which will translate to higher MCX revenue in the coming months, analysts said.

“A sharp rise in gold prices should boost trading volumes in the near term, while we expect crude volumes to recover as margin requirements normalize,” said analyst Sudheer Guntupalli.

. “We continue to like the company for its virtual monopoly in the commodity exchange segment in India.”

MCX has already received a regulatory green light to launch bullion and metals index futures, which are expected in mid-August. In stock market experience, indices account for the bulk of trading volumes on an exchange.

“In difficult economic conditions, MCX is a free cash flow, balance sheet light company with a 90% dividend payout, even as markets worry about defaults,” said Subramanian Iyer, analyst at Morgan Stanley.


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