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Sovereign gold bond opens next week. Date, price, other details; apply or not?


Issuing a press release regarding sovereign gold bond price, date and other details, RBI said, “Sovereign Gold Bond Scheme 2023-24 – Series II will be open for subscription during September 11-15, 2023. The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] on gold of 999 purity of the last three working days of the week before the subscription period, ie. 06 September, 07 September, and 08 September, 2023. 5,923/- (Rupees Five thousand nine hundred and twenty three only) per gram of gold.”

Discount for online applicants

“The Government of India, in consultation with the Reserve Bank, has decided to offer a discount 50/- for every gram less than the nominal value for those investors who apply online and make the payment against the application through digital mode. For such investors, the issue price of the Gold Bond 5,873/- (Rupees Five thousand eight hundred and seventy three only) per gram of gold,” RBI said.

The 2023-24 series 2 sovereign gold bond scheme will be sold through banks, Stockholding Corporation of India Ltd (SHCIL), designated post offices, and recognized stock exchanges — the NSE and the BSE.

Important details regarding the September 2023 sovereign gold bond

1]Sovereign gold bond price: The RBI has set an issue price at 5,923 per 10 gm.

2]Sovereign gold bond discount: It has been announced by the RBI 50 per 10 gm discount for online applicants on the new tranche of sovereign gold bond September 2023.

3]Sovereign gold bond date: The RBI has announced that the second tranche of sovereign gold bond 2023 will be opened for subscription on 11 September 2023 and will remain open for bidding till 15 September 2023. This means that the sovereign gold bond scheme will 2023-24 series 2 available from Monday to 15 September 2023. Friday next week.

4]How to apply: The 2023-24 series 2 sovereign gold bond scheme will be sold through banks, Stockholding Corporation of India Ltd (SHCIL), designated post offices, and recognized stock exchanges — the NSE and the BSE.

5]Eligibility: The sovereign gold bond scheme is restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

6]Tenor: The period of the sovereign gold bond scheme will last for a period of eight years with an option of premature redemption after the 5th year to be exercised on the date on which interest is payable.

7]Investment limit: The minimum allowable investment limit in a sovereign gold bond scheme is one gram. However, the maximum subscription limit is 4 Kg in case of individual, 4 Kg in case of HUF and 20 Kg in case of trusts and similar entities per fiscal year (April-March) notified by the Government from time to time.

8]Redemption price: The redemption price under the sovereign gold bond scheme will be in Indian Rupees based on the average closing simple price of gold of 999 purity, the previous three working days published by IBJA.

9]Sovereign gold bond interest rate: The investors will be compensated at a fixed rate of 2.50 percent per year payable semi-annually on the nominal value.

10]Should you apply: Giving a ‘subscription’ tag to the 2023-24 series 2 Sovereign gold bond scheme, Sugandha Sachdeva, Executive Director & Chief Strategist at Acme Investment Advisors said, “Gold prices are trading marginally lower after testing all-time highs ever of Rs.61,845 per 10 grams during. second quarter of 2023. However, as we approach the wedding and festive season in India, gold is likely to gain attention once again.”

Sugandha said the outlook for gold is positive in the medium and long term. Investors can allocate 10-15% of their portfolios to gold to diversify their risk and protect their wealth against rising price pressures and economic uncertainty.

As for why to apply for the September 2023 sovereign gold bond, Sugandha listed the following four reasons:

1]Central banks around the world are hoarding gold in huge quantities amid growing economic uncertainties and increasing pressure towards de-dollarization. This is seen as a vote of confidence in gold as a safe haven asset.

2]The markets expect the US central bank to be near the end of its rate hike cycle. This is good news for gold, as higher interest rates tend to weigh on gold prices.

3]Concerns about a weakening global economy are likely to fuel gold’s appeal as a safe-haven investment. Gold is seen as a hedge against inflation and economic instability.

4]Gold prices have already corrected from their peak of Rs.61,845 per 10 gm and are consolidating around the near-term support zone of Rs.57,500-58,000 per 10gm. This could be an opportunity for investors to add gold to their portfolios in a phased manner and sovereign gold bonds are one of the best instruments to gain exposure to gold if one has a long-term horizon.

Disclaimer: The above opinions and recommendations are the opinions and recommendations of individual analysts or brokerage firms, and are not the opinions of Mint. We encourage investors to check with certified experts before making any investment decision.

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Updated: 09 September 2023, 08:26 AM IST

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