Amidst the Russo-Ukraine war, the Sovereign Gold Bond (SGB) scheme 2021-22 – Series X is going to open on 28 February 2022. The issue price of SGB has been fixed for the last tranche of FY22 5,109 per gram, 323 above Series IX issue price 4,786 per gram of gold. Government of India (GoI) in consultation with Reserve Bank of India (RBI) has decided to offer 50 per gram to the applicants who apply online and the payment against their application is done through digital mode. According to experts, amidst the uncertainty caused by the Ukraine conflict, one should not miss this opportunity and subscribe to the issue which will be up for membership from 28 February 2022 to 4 March 2022.
giving ‘subscribe’ tag to the latest tranche of Sovereign Gold Bond Scheme; Anuj Gupta, Vice President, IIFL Securities said, “Amidst the uncertainty due to the Russia-Ukraine war, the price of gold is expected to remain highly volatile. 5,109 per gram can be a good bet for long term gold investors. If you look at the returns of the last 5 years on gold, then it has jumped closely. 3,000 per gram approx The 5,100 per gram level gives investors about 70 percent return. After climbing to their all-time high in 2021, prices of the yellow metal remain in the heat of profit-booking on every rise in 2021. Hence, investing for a longer tenure of 5 years through a Sovereign Gold Bond scheme can be a good bet in the current geopolitical uncertainty. Anuj Gupta of IIFL Securities suggests gold investor to apply for SGB scheme.
Highlighting the benefits of investing in Paper Gold; Nish Bhatt, Founder and CEO, Millwood Cane International said, “Shifting investments from physical gold to digital/paper gold has been a major success for the government through SGBs, in which it has increased its income. 32,000 crore since its inception in 2015. Investing in paper gold (SGB) is a better and less hectic option as there are no storage costs as in the case of gold jewelry.
Drawing gold investors’ attention to the current global uncertainty, the founder and CEO of the investment consulting firm said, “Geopolitical tensions have driven gold prices to over a year high. Historically, Gold has attracted investment in times of uncertainty. Safe haven nature. The situation in Ukraine has also pushed up crude oil prices. A rally in oil prices put pressure on the Indian national rupee or INR, making gold more expensive Done. Currently, gold is supported by international as well as international local developments. Going forward, developments in Ukraine and Fed action will provide direction to most asset classes. But high crude oil price and inflation in India, the latter The pressure on INR will continue to support gold prices in the short to medium term.”
The minimum allowable investment in Sovereign Gold Bond Scheme is 1 gram of gold. The maximum limit of membership in each financial year (April-March) is 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar entities.
RBI issues bonds on behalf of the Government of India. The bonds will be sold through Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognized stock exchanges – National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
The scheme was launched in November 2015 with an aim to reduce the demand for physical gold and shift a portion of household savings to financial savings to be used for the purchase of the yellow metal.
The bond price is fixed in Indian Rupees on the basis of simple average of closing price of 999 purity gold published by India Bullion and Jewelers Association Limited for the last 3 working days of the week preceding the membership period.
(with inputs from PTI)
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