Gold Bond Investors to Get 333% Returns on December 2017 Issue
In a significant development, the Reserve Bank of India (RBI) has announced the final redemption price for Sovereign Gold Bonds (SGBs) issued in December 2017. The RBI has fixed the final redemption price at ₹12,801 per unit for the SGBs under the 2017-18 Series-XI, which was issued on December 11, 2017. This move is expected to bring cheer to investors who had purchased these bonds, as they will now receive a return of approximately 333% on their investment.
For those who may not be familiar, Sovereign Gold Bonds are a type of investment instrument issued by the Government of India, where investors can buy gold in a non-physical form. These bonds are denominated in grams of gold and are issued by the RBI on behalf of the government. The SGBs are designed to provide investors with an alternative to physical gold, while also helping to reduce the country’s gold imports.
The December 2017 issue of SGBs was priced at ₹2,954 per unit, which means that investors who bought these bonds will now receive a return of around 333% on their investment. This is a significant return, especially considering that the bonds have a tenure of 8 years. The high return is largely due to the appreciation in the price of gold over the past few years, which has been driven by a combination of factors, including a decline in the value of the US dollar, geopolitical tensions, and a surge in demand for safe-haven assets.
The RBI has also announced that the same redemption price of ₹12,801 per unit will apply to premature redemption of SGBs under the 2019-20 Series I, which was issued on June 11, 2019. This means that investors who had purchased these bonds and are looking to redeem them prematurely will also receive the same high return.
The high return on SGBs is likely to attract more investors to this investment instrument, especially those who are looking for a safe and stable way to invest in gold. The SGBs offer a number of benefits, including a fixed return, a low-risk investment, and the ability to redeem the bonds prematurely. Additionally, the SGBs are exempt from capital gains tax, which makes them an attractive option for investors who are looking to minimize their tax liability.
The announcement of the final redemption price for SGBs is also likely to have a positive impact on the gold market, as it is expected to increase demand for gold and drive up prices. The high return on SGBs is likely to attract more investors to the gold market, which could lead to an increase in prices and a surge in demand for gold-related investment instruments.
In conclusion, the announcement of the final redemption price for SGBs is a significant development for investors who had purchased these bonds. The high return of around 333% is a testament to the appreciation in the price of gold over the past few years and is likely to attract more investors to this investment instrument. The SGBs offer a number of benefits, including a fixed return, a low-risk investment, and the ability to redeem the bonds prematurely, making them an attractive option for investors who are looking for a safe and stable way to invest in gold.
The RBI’s decision to fix the final redemption price at ₹12,801 per unit is also likely to have a positive impact on the gold market, as it is expected to increase demand for gold and drive up prices. As the gold market continues to evolve, it will be interesting to see how investors respond to this development and whether the high return on SGBs will lead to an increase in demand for gold-related investment instruments.
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