The eighth tranche of the Sovereign Gold Bond (SGB) scheme for 2021-22 has opened for subscription today (Nov 29) and will continue till December 3. The issue price has been fixed at Rs 4,791 per gram of the yellow metal. Online subscribers can, however, secure these bonds at a discount of Rs 50 per gram.

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According to Nish Bhatt, founder and CEO, Millwood Kane International, investment in SGB is a fast picking pace.

“The government has raised over Rs 31,000 crore of funds via the scheme," he said.

He further said that one should definitely invest in gold bonds, considering their varied benefits.

"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 percent/pa interest. SGB is a favoured route for the government to convert all gold investments into digital and this will help keep the deficit under control, provide support to the currency," he added.

Speaking on gold prices, he said that after hitting a 9-month high earlier in the month, the yellow metal was trading in a narrow range for the past few sessions.

"The fears surrounding the new variant of virus has raised fresh concerns, leading to softness in the dollar, 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. 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," he said.

With SGBs, investors do not have to worry about the storage of gold as it is in a Demat form. After investing, individuals get a holding certificate. It comprises government securities denominated in gold wherein investors are required to pay the issue price in cash.

Those looking to subscribe to the SGBs in this tranche can apply through banks, Stock Holding Corporation of India Limited (SHCIL), stock exchanges NSE and BSE, designated post offices, or through agents.

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(Edited by : Abhishek Jha)

First Published:Nov 29, 2021 1:05 PM IST