After a gap of almost four decades, India on Friday launched futures trading in gold and silver.

This will give bullion traders the option of hedging against price fluctuations.

Technology-driven futures trading in gold and silver would fulfill its objectives only if poor farmers and small goldsmiths benefit from it, Minister For Consumer Affairs, Food And Public Distribution Sharad Yadav, said in New Delhi while launching futures trading in bullion.

Traders will get hedging and trading facilities in bullion futures from seven Indian cities -- New Delhi, Mumbai, Ahmedabad, Indore, Kochi, Kolkata and Chennai through the newly launched National Multi Commodity Exchange of India.

Yadav said poor farmers use gold and silver as investments for meeting future financial needs, and hoped the trading would be made relevant to them through dissemination of information about prices.

"There were thousands of small goldsmiths who make their living out of this business, and it was important they derive benefits from this scientific system," he added.

Yadav said the NMCE, which would conduct gold and silver futures trading from Friday, could help players discover an efficient future price for each commodity traded on the exchange.

After the war with China in 1962, India had banned futures trading in bullion. India is the world's largest consumer of gold and buys about 800 tonnes of the precious metal every year.

It also buys about 3,500 tonnes of silver annually.