Government securities expressed in grams of gold, known as Sovereign Gold Bonds (SGBs), offer an alternative to holding physical gold.
The determination of the SGB issue price involves calculating the simple average of the closing prices of 999 purity gold over the three working days preceding the subscription period, as reported by the India Bullion and Jewellers Association (IBJA).
In a notification, the Reserve Bank of India (RBI) stated, “The nominal value of the bond, based on the simple average of closing prices (published by the IBJA) for gold of 999 purity during the last three working days of the week before the subscription period (February 7-9), amounts to Rs 6,263.”
On February 21, 2024, the government will issue SGBs applied for under the 2023-2024 Series IV.
The most recent offering, SGB Scheme 2023-2024 Series III, occurred from December 18-22, 2023. It had an established issue price of Rs 6,199 per gram of gold.
Individuals have the convenient option of investing in SGBs through Scheduled Commercial banks (excluding small finance banks, payment banks, and regional rural banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognized stock exchanges such as the National Stock Exchange of India Limited and Bombay Stock Exchange Limited, or directly through the RBI.
The government reduces the issuance price of SGBs by Rs 50 per gram to encourage online subscriptions and digital payments. It provides investors with an opportunity to earn attractive market-based returns.
Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment decisions.
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