The fourth tranche of Sovereign Gold Bond 2021-22 will open for subscriptions from Monday for five days. The Reserve Bank of India has fixed the issue price for the latest tranche of Sovereign Gold Bond at ₹4,807 per gram. “The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period, i.e. July 07, July 08 and July 09, 2021 works out to ₹4,807/- (Rupees Four thousand eight hundred and seven only) per gram of gold," the central bank said in a press release.
Introduced in 2015, the Sovereign Gold Bonds are government securities denominated in grams of gold. Resident individuals, Hindu Undivided Family (HUF)s, Trusts, Universities and Charitable Institutions are eligible to apply for the subscription of the bonds. The minimum permissible investment will be one gram of gold during the subscription window. The tenor of the bond will be for a period of 8 years with exit option after fifth year.The minimum investment in the gold bonds shall be one gram with a maximum limit of subscription of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities. In case of joint holding, the limit applies to the first applicant, the central bank clarified.
Individuals can buy gold bonds from commercial banks, Stock Holding Corporation of India Limited (SHCIL), post offices designated by RBI and recognised stock exchanges, either directly or through agents.
“The investment in non-physical gold, via digital or paper gold, is picking up pace. The high interest is on account of the recent firmness in the prices of gold in the past few weeks. The government on its part has been continuously trying to move investment in gold from physical to digital/paper gold to keep a check on the currency and larger fiscal deficit. Investment in Sovereign Gold Bond is a superior alternative to physical gold. Investment in SGB saves the cost of buying, storing, and selling the physical gold bar or coins," said Nish Bhatt, founder and chief executive of Millwood Kane International, an Investment consulting firm.
“The price for the yellow metal has been on an up move for the past three weeks as US Treasury yields dropped to a 4-month low due to concerns related to the virus. The next big trigger for gold prices will be the Fed meeting later this month, rising inflation in the US is a cause of concern and any change in the stance on interest rates or liquidity by the Fed will have its impact on the prices. The latest variant of the virus has created uncertainties, rise in the number of cases. Moving forward the ability to control the virus by large countries, the pace of vaccination, global economic recovery, and the rising inflation will guide gold prices,” he added.
A customer can apply online through the website of the listed scheduled commercial banks. The issue price of the gold bonds will be ₹50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.