The Reserve Bank of India (RBI), has announced the issue price of its 11th tranche of the Sovereign Gold Bond (SGB) Scheme. The Government of India, in consultation with RBI, has decided to offer a discount of Rs 50 per gram less than the nominal value for the investors who apply online, and payment is made through digital mode. For such investors, the RBI issue price of Gold Bond is Rs 4,862 per gram of gold.
The SGB scheme 2020-21 series XI will be open for subscription from February 01, 2021, to February 05, 2021. When it comes to the nominal value of the bond, it is based on the simple average closing price for gold of 999 purity of the last three business days of the week preceding the subscription period.
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The value of the bond would be what was published by the India Bullion and Jewellers Association. “Investment in SGB is most seamless and cost-efficient for investors looking to take exposure in Gold,” says Nish Bhatt, Founder & CEO, Millwood Kane International an investment consulting firm.
The gold prices are trading in the Rs 48,000-Rs 52,000 range in the past 3 months and are headed for a decline in value for January, says a market expert. “Gold prices have been under pressure due to the rise in US treasury yield and subdued buying activity by Gold Exchange Traded Fund (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,” says Bhatt.
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“Moving forward, the number of stimulus packages from the US government, effective implementation of the vaccination process, and pick up in the economy across the globe will guide gold prices,” he adds.
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