Mumbai: The December gold contract on the commodity exchange MCX surged an unexpected ₹1,133 per 10 gm in just four seconds during Thursday's evening trade. This spike occurred despite a stable dollar-priced gold market. 

The “unusual" surge took gold prices to ₹61,914 per 10 gm between 9:10 pm and 9:15 pm, prompting speculation among traders.

Kishore Narne, director at Motilal Oswal Financial Services, said the sudden surge might have been an "inadvertent" market order to buy instead of a limit order. 

In a market order, all the sell-side quotes are picked up by the trading engine and an average buy price is arrived at. This would be way higher than the buy price intended by the client. In a limit order, only those sell quotes within the price limit, specified by a client, would have been picked up.

Around 12 lots (12 kilos) were traded at a price of ₹61,914 and around 150 lots at ₹60,700 price. The contract is a kilo contract and the price quote is per 10 gm. The contract settled at ₹60,722 on Thursday and is currently trading around Rs.61200.0 per 10 gm.

"The trade was within the price range of the day and must have been a punching error. When the client or clients realised their mistake they would have instantly squared off causing the price to fall as rapidly as it rose," Narne added.

India Bullion and Jewellers Association national secretary Surendra Mehta said the "inexplicable" surge should be examined by the MCX.

Nitin Kedia of Kedia Fincorp, a commodity advisory company, termed the trade "unusual" as there was no "apparent" cause for the dramatic volatility which lasted for a few seconds.

"It has nothing to do with the exchange as it was not a technical glitch, but it certainly raises questions as the dollar rate of gold didn't see such volatility and the rupee too was stable," Kedia said.

Senior exchange officials could not be contacted immediately.

MCX on 16 October migrated to the TCS commodity derivatives platform from long time vendor 63 moons. The share of MCX has almost doubled in the past one year to ₹2,902 intraday Friday. Around a third of the rally has happened post the migration. The volatility in crude and gold has also played a major role in increasing the exchange turnover .

MCX is the country's largest commodity bourse with over 95% market share. It offers trading in futures and options on metals and energy contracts. The key shareholder is the bourse is Kotak Mahindra Bank, which holds 15% of its equity.