First Tranche of Gold Bond Posted Record Subscription

SEATTLE (Scrap Monster):  The first issue of sovereign gold bonds (SGBs) for FY21 saw record subscription.

The data published by the Reserve Bank of India (RBI) states that the subscription touched a record of 17.73 lakh units worth around INR 822 crores. This is the highest subscription level recorded since October 2016. It must be noted that the subscription for October 2016 bonds had totalled 35.98 lakh units, worth nearly INR 1,081 crore.

The April issue of gold bonds had opened for subscription on 20^th April and was open for a period of five days. The subscription closed just ahead of Akshaya Tritiya- the auspicious occasion for gold purchases. As per industry sources, up to 10% of the SGB subscription may be attributed to Akshaya Tritiya. It must be noted that customers could not purchase physical gold this time, due to shutdown of shops on account of extended nationwide lockdown to contain virus spread.

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SGBs have seen significant response in recent times, mainly due to the 2.5% per annum fixed interest rate paid on holdings. Investors consider it as one of the best options to investing in gold. There has been a visible shift in capital allocation from other asset classes to gold, mainly due to high returns offered by gold. Incidentally, gold prices have appreciated by 45% over the past one year.