The latest tranche of sovereign gold bonds, which opened for subscription on Monday, closes today. In the fourth tranche of gold bonds of this fiscal, the government is selling gold at ₹4,852 per gram. Investors applying online and making payment through digital mode will get a discount of ₹50 per gram. The issuance date of this tranche of gold bonds has been fixed on July 14.
Gold has had a phenomenal year. So far it has rallied over 25% so far in futures market, hitting a new high of over ₹49,000 per 10 gram this year.
Gold bonds have a maturity period of eight years but investors will have the option to exit after the fifth year. Capital gains, if any, at maturity is tax-free. This is an exclusive benefit available on gold bonds.
Investors get dual benefit in sovereign gold bonds: they earn a fixed 2.5% coupon over and above the price appreciation, if any.
Many analysts remain positive on gold, citing concerns over global economy and tensions between China and the US and scope for further stimulus from global central banks.
Gold is considered a safe haven in times of economic uncertainty and a hedge against inflation.
The sovereign gold bond scheme was launched in 2015 by the government to reduce the demand for physical gold and shift a part of the domestic savings into financial savings.
Though physical demand of gold remains weak due to lockdown related restrictions and surging coronavirus crisis, investment demand for gold has remained strong this year across the globe.
Holdings in gold-backed ETFs across the world increased to 3,234.6 tons this week, according to initial data compiled by Bloomberg. That’s up 655.6 tons so far in 2020.
The RBI in April had announced that the government will issue sovereign gold bonds in six tranches till September. Here are the details of other tranches of gold bonds that will be issued till September:
2020-21 Series V gold bonds
subscription date – August 03-07, 2020
Issuance date- August 11, 2020
2020-21 Series VI gold bonds
subscription date – Aug.31-Sept.04, 2020
Issuance date – September 08, 2020