In a post on the microblogging platform X on Monday, Kamath said the transformation in India’s commodity markets over the past few years has been dramatic, with precious metals now commanding an outsized share of activity on the Multi Commodity Exchange.
“Up until a few years ago, commodity trading was more or less an afterthought. Most traders didn’t bother with it because liquidity was thin relative to NSE F&O,” Kamath wrote. “But that’s changed dramatically, thanks to the spectacular rally in gold and silver.”
Precious metals take over MCX volumes
Kamath said the scale of the shift is evident in the growing dominance of gold and silver in overall MCX trading. “If you look at gold and silver as a percentage of total MCX trading volumes today, the numbers are kind of crazy,” he wrote.He added that the surge has not expanded the entire commodity complex evenly. “A lot of this increase has come at the expense of other commodities like crude,” Kamath said, pointing to a redistribution of trading interest rather than a uniform rise across contracts.
The comments come as precious metals rallied sharply on Monday, with silver futures crossing the Rs 3 lakh per kg mark for the first time and gold rebounding strongly to record highs on the MCX, as investors globally returned to safe-haven assets amid renewed geopolitical tensions.
Zerodha’s market share hit
The rally has also had competitive consequences for brokers. Kamath acknowledged that Zerodha lost ground during the initial phase of the commodity boom due to a lag in infrastructure.
“Our market share at Zerodha took a hit during this period because we were one of the last brokers to offer the single trading ledger facility—where you can use the same funds in your account to trade across the NSE, BSE and MCX,” he wrote. “But it’s been steadily inching back up.”
Despite the recovery, Kamath underscored how unexpected the scale of the shift has been. “It’s still wild how much volumes have grown. If you’d asked me a few years ago whether this would happen, I’d probably have said no,” he said.
With retail participation in commodities accelerating, Zerodha is now stepping up its focus on investor education. Kamath said the firm is working on “a few live programmes on commodities trading” for its Zerodha Varsity platform.
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