Sovereign Gold Bond Scheme opens today amidst Ukraine crisis: 5 day window to buy gold at low prices

New Delhi: The Sovereign Gold Bond Scheme 2021-22 - Series- X or the tenth tranche will be open for subscription from today (Monday, February 28).

The Sovereign Gold Bond Scheme 2021-22 - Series- X will be open for subscription for for five days period February 28 to March 4. The issue price for Sovereign Gold Bond Scheme 2021-22 Series- IX has been fixed at Rs 5,109 per gram of gold.

"The nominal value of the bond...Works out to Rs 5,109," the central bank said in a statement. The Government of India, in consultation with the RBI, has decided to offer a discount of Rs 50 per gram to those investors applying online and the payment against the application is made through digital mode. "For such investors, the issue price of Gold Bond will be Rs 5,059 per gram of gold," RBI said.

The tenure of the bond will be for a period of eight years with an exit option after fifth year to be exercised on the next interest payment dates. The Minimum permissible investment is 1 gram of gold. 

The maximum limit of subscription shall be 4 kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March).
Know Your Customer (KYC) norms will be the same as that for the purchase of physical gold. The sovereign gold bond scheme was launched in November 2015, with an objective to reduce the demand for physical gold and shift a part of the domestic savings -- used for the purchase of gold -- into financial savings. 

News Agency Reuters has quoted RJO Futures senior market strategist Bob Haberkorn saying, "It`s more than what the market was anticipating".  "If Russia in fact does take Kiev and the international community has an aggressive response, gold will trade up over $2,000 fairly quickly" and the least path of resistance is up because there are just so many unknowns right now, Haberkorn added.

What is Sovereign Gold Bond Scheme?

Sovereign Gold Bond Scheme are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.

How will the Sovereign Gold Bond Scheme be sold?

The bonds will be sold through scheduled commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Who can buy Sovereign Gold Bond Scheme?

The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

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