Sovereign Gold Bond Scheme Series I: The government has launched the first tranche of Sovereign Gold Bond Scheme 2023-24 (Series 1). The issue is open for subscription during the period June 19-23, 2023, with the settlement date of June 27, 2023. The issue price of the bond during the subscription period would be Rs 5,926.
The government has decided to issue two tranches of SGBs during the first half of the current financial year. The date for subscription for 2023-24 Series I is June 19-23, 2023, while for Series II is September 11-15, 2023.
How SGB Price Is Fixed?
The price of the bond is fixed in Indian rupees on the basis of the simple average closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period.
The bonds are denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor of the bond will be for a period of 8 years, with an exit option after the 5th year to be exercised on the next interest payment dates.
Sovereign Gold Bond: Investment Limit
The minimum permissible investment is 1 gram of gold. The maximum limit of subscription is 4 kilograms for individuals, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March).
Sovereign Gold Bond Scheme: Should You Invest?
The government in consultation with the Reserve Bank of India has decided to allow a discount of Rs 50 per gram from the issue price to those investors who apply online and the payment is made through digital mode
For such investors the issue price of Gold Bond will be Rs 5,876 per gram of gold.
Bhavik Patel, Commodity/Currency analyst at Tradebulls Securities, said, “Sovereign gold bond FY24 series has opened and we believe one should invest in it. Compared to physical gold, it makes sense to hold gold in the form of sovereign bonds unless one needs physical gold for making jewellery.”
Patel added that the recent correction from historical highs is a good opportunity to invest in gold as we might not see any major correction in prices unless the US Fed raises interest rates more than 2 times which is not looking likely at the moment.
“Gold prices have been trading steadily and in consolidation for some time and we believe prices are likely to move higher near the end of the year when major central banks will start cutting rates. As it is difficult to time the market for highs and lows, we believe the current Sovereign gold bond scheme is a good opportunity to invest in gold,” Patel added.
Colin Shah, MD, Kama Jewelry, added that investment in Sovereign Gold Bonds does away the need to store it in vaults; it provides a high level of liquidity. Gold prices have gained over 17% in FY23, around 8.2% YTD. The gold bond scheme has provided double-digit returns.”
“Gold prices traded with mixed cues until the Fed announced its monetary policy last week. The commentary indicated at least 2 more rate hikes in the current cycle. This led to a rise in gold prices. Moving forward, the Chinese central bank will announce its monetary policy and a likely stimulus later this week. Any easing in rates will support gold prices. Expectations of global central banks easing rates from CY24 onwards will support the yellow metal.”
How To Buy Sovereign Gold Bond 2023?
The bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges — National Stock Exchange of India Limited and Bombay Stock Exchange Limited.