Mr. Nish Bhatt, Founder & CEO, Millwood Kane International, an investment consulting firm
“ Sovereign Gold Bond (SGB) a substitute for holding physical gold without the hassle of buying and storing it physically as the Gold bond is in paper/digital form, its purity is guaranteed as it has Government of India’s backing, selling it is easy also there is no loss like in case making/molding charges of Gold Jewelry. Capital gains on SGBs are exempted if held till maturity of 8 years, also one can start trading it these will be tradable on stock exchanges within a fortnight of the issuance/date notified by the RBI. The best thing about SGBs is the interest payment attached to it as investors stand to get 2.5% of interest on the initial investment.
India is the second-largest consumer of gold after China, India’s love for the yellow metal is a well-known fact and inelastic to a large extent as Gold is procured for gifting, planning for children’s marriage in many parts of India.
The first tranche of Sovereign Gold Bond issue of FY21 opens today, the minimum investment is 1gm of gold at Rs 4639, investors applying online/digital mode will get a discount of Rs 50/gm.
Gold is used as a natural hedge against uncertainty. Gold bond issued first time in 2015 India was around 2680/gm. Historically, Gold prices rise steadily and more in times of economic turmoil. On the opposite end of the scale when economies are flourishing, gold values fall as more adventurous and risky investments are made”.