Mint Primer: Why sovereign gold bonds are glittering away
SummaryThe latest tranche of sovereign gold bonds (SGBs) saw investors subscribing to a record number of units. Mint looks at the reasons for this high interest in SGBs, gold’s clout as a hedge against inflation and the outlook for the yellow metal.
How did the issue of gold bonds fare?
Investors subscribed to 11.67 trillion units of SGBs at ₹5,923 per unit aggregating ₹6,914 crore. This is significantly higher than the 7.7 trillion units subscribed in the June tranche and the highest subscription since the government began issuing SGBs back in November 2015. The quantum of subscription has been rising consistently and so far, SGBs have cumulatively raised ₹56,342 crore. In volume terms this equals 122.07 tonnes of gold (each unit equals a gram of gold). The total outstanding units after redemption (investors are allowed to redeem the bonds after 5 years) equals 120.63 tonnes.