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Consumers who had missed out on buying gold during Akshya Tritiya on Friday due to the lockdown can heave a sigh of relief with the Sovereign Gold Bond opening for subscription on Monday.
The first of the six gold bonds to be issued this fiscal will close on May 21. The RBI has fixed a price of ₹4,777 per one gram for the bond. With a discount of ₹50, it works out to ₹4,727 for online customers. The benchmark Indian Bullion and Jewellers Association gold rate was at ₹4,776 on Friday.
The bonds will be issued on May 25 and subsequently listed on BSE and NSE. It will pay an interest of 2.50 per cent per year. Last Akshaya Tritiya, gold prices were hovering at ₹4,660 per gram and it was at ₹3,173 in 2019.
After hitting an all-time high of ₹5,000 per grams last year, gold prices started tapering after various Covid vaccines were approved in the second half of last year. “The excess liquidity infused by the governments across the globe started pushing up gold prices again and it began gaining momentum in recent months due to the concern over rising inflation, increase in Covid cases, economies growing on the back of debt, trade war between US and China,” said Motilal Oswal research report.
It has set an immediate targets towards ₹50,000 and eventually hitting new highs of ₹56,500 over the next 12-15 months. The bond will have an eight-year tenor, with an option to exit after the fifth year.
Ashraf Rizvi, Founder & CEO, Digital Swiss Gold & Gilded said more customers preferred digital gold during the Akshaya Tritiya this year due to the lockdown. Digital Swiss Gold provides customers with certified Swiss gold, ethically sourced and stored in fully insured non-bank Brink’s vaults in Zurich Switzerland. With DSG, customers get an additional savings of 7-10 per cent.
Another option, Rizvi said is the SGB which offers attractive pricing and an annual return, but, requires the secondary market to sell, this can be quite expensive and liquidity may not be available when needed, besides the holding period of eight years is too long.
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