The underwriting of sovereign gold bonds ends today: what you need to know

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Subscription for the last tranche of sovereign gold bonds ends today. The show was opened on October 25. The issue price was set at ??4,761 per gram of gold. The issue price of gold bonds will be ??50 per gram less for those who subscribe online and pay digitally. The Reserve Bank of India will issue the bonds on behalf of the Indian government. In the MCX futures market, gold is hovering around ??47,900 levels currently.

“The government gold bonds have been a great success as the government has raised more than ??32,000 crore since its inception in 2015. Gold sovereign bonds are a superior option for investing in gold without having to worry about its cost of storage, resulting in fees in the case of gold jewelry. These bonds have an advantage due to tax advantages and regular interest payments for investors. The investment in SGBs has helped the government reduce the deficit, also formalized the investment in gold in the country, ”said Nish Bhatt, Founder and CEO of Millwood Kane International.

The Reserve Bank of India will issue the bonds on behalf of the Indian government. The bond prices are set on the basis of the simple average of the closing prices of 999 purity gold, published by the India Bullion and Jewelers Association Ltd for the last three business days of the week preceding the subscription period.

The gold rate has risen in recent weeks and gold prices in the future will be guided by developments in the US-China trade negotiations, the covid situation and its impact on commercial activities and central bank action on liquidity and rate hikes, he added.

Gold bonds have a term of eight years with an exit option after the fifth year to be exercised on the next interest payment dates.

Investors will be indemnified at a fixed rate of 2.50 percent per annum payable semi-annually on the face value while the minimum investment allowed will be 1 gram of gold.

The sovereign gold bond program was launched in November 2015, with the aim of reducing the demand for physical gold and transferring part of the national savings – used for the purchase of gold – to savings financial. (With contributions from the agency)

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