Issue closes for subscription on Friday, September 3, 2021
The Reserve Bank of India (RBI) has fixed the price for the sixth tranche of Sovereign Gold Bond (SGB) at Rs 4732/gm. The sixth tranche of SGB opened for subscription on Monday, and is fast picking pace, closing on Friday September 3, 2021.
MCX spot gold was quoted lower by Rs 184 per 10 grams at Rs 47, 354, while the silver was quoted Rs 111 lower per kilogram at Rs 63,474 on Monday.
RBI raised Rs 16,049 crore in FY21 via the twelve tranches of SGBs, a total of over Rs 25,702 crore since its inception in November 2015 as per its annual report.
Investment in non-physical gold, digital gold provides high liquidity, eliminates storage cost, and is easier to sell than physical gold. Investment in SGBs comes with an interest coupon payable semi-annually.
Nish Bhatt, Founder and CEO, Millwood Kane International said, “Gold prices have been trading sideways for the past few days. However, it has recovered much of its losses witnessed in the month of August. Gold prices have gained significantly in the past five months. Since the second wave forced lockdowns in April.”
Moving forward, gold prices will be guided by the impact of the delta variant of Covid-19, the geo-political situation in Afghanistan, and most importantly how the Fed signals tapering and manage the rising inflation in the US, he said.
Investment in gold at the current level is also recommended by the veteran investor Mark Mobius, who said in a recent interview that investors should have 10 per cent of a portfolio in gold as currencies will be devalued following the unprecedented stimulus rolled out by the various central banks to fight the coronavirus pandemic.
At this stage, “10 per cent should be put into physical gold,” said Mobius, who set up Mobius Capital Partners after more than three decades at Franklin Templeton Investments. “Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed.”
Bullion rallied to a record last year as the coronavirus pandemic spurred a flight to haven assets but it has pulled back since with the roll-out of vaccines. To fight the crisis, central banks and governments worldwide have unleashed an unprecedented wave of monetary and fiscal stimulus, boosting balance sheets at the Federal Reserve and elsewhere and straining state finances.
“It is going to be very, very good to have physical gold that you can access immediately without the danger of the government confiscating all the gold,” Mobius, a long-time fan of the metal, said in an interview.
Spot bullion, which traded near $1,815 an ounce, hit an all-time high above $2,075 about a year ago. Year-to-date, it has shed more than 4 per cent, while global stocks hold near a record as the Fed lays out a strategy to pare stimulus.