Perspective on SGB Series-I 2023-24 by Colin Shah

Jun 19, 2023

image001Mr. Colin Shah, MD, Kama Jewelry

There are few avenues to invest in gold. Some people prefer to invest in physical gold that can be worn on a daily basis. Some are artistic pieces passed on to future generations. Other than physical gold, there are some platforms offering digital gold. Then there are gold ETFs, and finally, we can invest in paper gold.

The price for Series-I 2023-24 is fixed at Rs 5,926/gm. Investment in Sovereign Gold Bonds does away the need to store it in vaults, it provides a high level of liquidity. The RBI pays 2.5% interest on SGB paid semi-annually.

Gold prices have gained over 17% in FY23, around 8.2% YTD. The gold bond scheme floated by the RBI in 2015 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.

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