Mumbai: Gold is attracting Indian investor interest like never before. Indian households have subscribed to a record Rs 3,387 crore worth of sovereign gold bonds in the recently concluded fifth series for FY21. By volume, this adds up to 6.35 tonnes.
This is by far the highest in value and volume in any series since SGBs were launched in 2015 as a means of cutting costly imports of the yellow metal.
In the past five years, SGBs aggregating to 48.16 tonnes have been issued by the RBI on behalf of the government. The issue price of Rs 5334 per gram in the fifth series was almost 10% higher than that in the the fourth series .
“It’s a stark contrast to physical demand which has slumped amid the Covid pandemic,” said Surendra Mehta, national secretary of gold trade body IBJA. “While it reflects rising investment demand, demand for physical gold would resume post the pandemic.”
In the June quarter gross billion imports into India were a minuscule 14.1 tonnes, down 95% from a year ago, as per World Gold Council, showing the impact of Covid on consumer demand.
While in interest in SGBs is miniscule compared with the average annual 800 plus tonnes’ gross bullion imports in the past two years, it reflects a rising investment trend with prices having risen 25% to Rs 53600 per 10 gm (Ex-GST) since the beginning of the current fiscal.