Sovereign Gold Bonds To Open For Subscription Soon: What You Need To Know

Sovereign Gold Bond: The eleventh tranche of the government's Sovereign Gold Bond (SGB) scheme will open for subscription on Monday, February 1, for a period of five days till Friday (February 5). As part of the gold bond scheme, the Reserve Bank of India issues interest-paying bonds linked to the market price of the yellow metal. After the current series, the gold bond scheme will be available one more time in March 2021. For the eleventh installment of the gold bond scheme, an issue price of Rs 4,912 per unit, equivalent to the value of one gram of gold, is applicable, according to the central bank. (Also Read: Budget 2021: Section 47 Of I-T Act Must Be Amended With Respect To Gold Bonds Scheme )

Here are some key details about the government-run Sovereign Gold Bond scheme: 

Issue Price

Each gold bond (equivalent to one gram of gold) is priced at Rs 4,912 under the eleventh installment, according to the RBI. The rate is arrived at on the basis of the spot prices provided by the Mumbai-based India Bullion and Jewellers Association (IBJA).  
 

Important Dates

The eleventh tranche of the gold bond scheme will open for subscription on Monday, February 1, and will be available for investing till Friday, February 5

Discount

A discount of Rs 50 per unit is applicable for all those investing in the gold bonds online, and the payment against the application is made through any of the digital modes. For such investors, the issue price of the gold price will be Rs 4,862 per gram of gold. (Also Read: Here Is How Sovereign Gold Bond Price Is Calculated)

Eligible Investors

The government's gold bond scheme is open to resident individuals, Hindu Undivided Families (HUFs), trusts, charitable institutions, and universities. According to the Reserve Bank of India, the individual investors with subsequent change in residential status from resident to non-resident can continue to hold SGB till the early redemption or maturity.

How To Invest

The sovereign gold bonds are sold through commercial banks, the Stock Holding Corporation, designated post offices, as well as the stock exchanges BSE and NSE. The bonds are held in RBI books or in a demat form.

What Experts Say

Mr. Nish Bhatt, Founder and CEO, Millwood Kane International - an investment consulting firm, on the eleventh tranche of the Sovereign Gold Bond Scheme:

“After a stellar performance in 2020, gold prices have been trading in the range of Rs 48,000-Rs 52,000 range in the past 3 months. Gold is headed for a decline in value for the month of January. Gold prices have been under pressure due to the rise in US treasury yield and subdued buying activity by Gold ETF investors.''

''Delay and lack of clarity on the next installment of the stimulus package have pushed yields higher, reducing the investor appetite for the yellow metal. Moving forward, the amount of stimulus package from the US government, effective implementation of vaccination process and pick up in economy across the globe will guide gold prices.”