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Sovereign Gold Bond Scheme opens today; expert says these factors will guide gold price in near to mid-term
Sovereign Gold Bond Scheme 2021-22 will open for subscription for five days from November 29, 2021. The subscription will close on December 03, 2021.
Sovereign Gold Bond Scheme 2021-22 will open for subscription for five days from November 29, 2021. The subscription will close on December 03, 2021. The issue price for Sovereign Gold Bond Scheme 2021-22 has been fixed at Rs 4,791 per gram of gold, the Reserve Bank of India said on Friday.
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"The nominal value of the bond...Works out to Rs 4,791 per gram of gold," the RBI said. Government of India, in consultation with the RBI, has also decided to offer a discount of Rs 50 per gram on the nominal value to those investors applying online and the payment against the application is made through digital mode.
Sovereign Gold Bond Tranche 8: Expert's take
“The Sovereign Gold Bond is an effective way of taking exposure to gold. There is storage cost, as the holding format is digital, plus the investor stands to gain a 2.5%/pa interest. The government has raised over Rs 31,000 cr of funds via the scheme. SGB is a favored route for the government to convert all gold investments into a digital mode, it will help keep the deficit under control, provide support to the currency, " said Nish Bhatt, Founder & CEO, Millwood Kane International on SGB Tranche 8.
Why gold is trading in narrow range?
Bhatta said after hitting a 9-month high earlier in the month, gold prices were trading in a narrow range for the past few sessions. "The fears surrounding the new variant of virus has raised fresh concerns, leading to a softness in USD, pushing gold prices higher. But the improving economic scenario, inflation levels around the world, likely rate hikes to contain inflation is likely to put pressure on gold," he said.
Factors that will guide gold price in near to mid term
Millwood Kane International said, moving forward, the US Fed meeting in December, the likely guidance on rates, economic data, and movement of the dollar will guide prices of gold in the near to mid-term.
Meanwhile, the bonds will be sold through banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
Minimum permissible investment is 01 gram of gold. The maximum limit of subscription is 4 KG for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March).
The Know-your-customer (KYC) norms will be the same as that for purchase of physical gold.
Earlier, the issue price of Series VII was Rs 4,761 per gram of gold.
The scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings -- used for the purchase of gold -- into financial savings.
(With Agencies input)
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