RBI's Sovereign Gold Bonds Hit Record Subscription

SEATTLE (Scrap Monster): The latest data published by the Reserve Bank of India (RBI) suggests that the May issue of Sovereign Gold Bond (SGB) posted highest-ever subscription. The issue, second tranche of gold bonds for FY21, had opened for subscription ion May 11^th and closed on 15^th May.

As per data, the government sold gold bonds worth Rs.1,168 crore in the May issue. This is the highest-ever amount mobilized through sale of SGBs. Prior to this, the highest amount mobilized through sale of gold bonds was Rs.1,082 crores, recorded in October 2016, when the sales had totalled 35.98 lakh units. A total of 25 lakh units of gold bonds were sold in the May 2020 issue. It must be noted that the first tranche of gold bonds for FY 21 issued in April this year had recorded subscription of 17.73 lakh units worth Rs.822 crore.

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The higher subscription rate for gold bonds is very much in line with the increased investment demand for the yellow metal, especially during times of uncertainties, due to economic uncertainties created by Covid-19 pandemic.

The SGBs have turned out to be a preferred choice of long term investors in gold, not only on account of projected appreciation in gold prices, but also because of the guaranteed fixed interest of 2.5% on the investment amount.

According to RBI circular, the upcoming issue of SGBs is scheduled to open for subscription on 8^th June, 2020.