InvestorQ : How has been the response to the latest issue of gold bonds by the government?
Priyanka N made post

How has been the response to the latest issue of gold bonds by the government?

Answer
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NISHA Nayak answered.
4 months ago


The recent sovereign gold bond (SGB) issue around the Akshaya Tritiya managed to sell gold bonds worth Rs.822 crore. This marks the third highest ever quantum of bonds sold during a single tranche. The record still remains the SGB issue of September 2016 when the gold prices were much lower. The quantity of underlying gold pertaining to the bonds sold in April stood at 1.77 tonnes (1 ton = 1000 KG). There is a particular significance of this April bond issue, given that it was a major avenue to purchase gold on Akshaya Tritiya in the midst of the lockdown when most of the gold and jewellery shops were shut. This is also the first time that the gold bond sale has happened at such a high price. Gold exchange-traded funds (ETFs) offer another avenue to invest in gold but the demand for SGBs is a lot higher for two reasons. Firstly, they have the guarantee of the central government and secondly the SGB also pays an annual interest of 2.5% which is an added bonus over and above the price appreciation, if any. However, the total gold sold last year on Akshaya Tritiya was around 30 tonnes and this year is just a patch on that. Of course, we are talking of physical gold, which was not possible this year.