Indians love to buy gold on the occasion of Akshaya Tritiya and the more prudent among those invest in the yellow metal via bonds or funds.
For instance, the series SGB2020-21 Sr-V were traded with a daily average volume of 2,468, 656 and 600 units, respectively in the past three months.
You may not be able to buy at the market price and would have to settle for a slightly higher price.
This gives you an idea how much return you will get if you hold the bond till maturity.
Since YTM is irrelevant in a SGB, you may compare the market price of the SGBs with the price published in the website of the IBJA.
At times, the market price of the SGBs may be higher or lower to that of the gold price of 999 purity published by the IBJA.
While the RBI delays its primary issuance on SGBs – it actually depends on the Government of India’s decision – you can consider buying them on the exchanges.
New waves and variants of the virus are taking a toll on the fragile economic recovery, which could trigger pullbacks in risky assets such as equities.
SGBs outperformed other modes of investing in gold, such as gold ETFs and e-gold, by a wide margin, thanks to the coupon payments that offer additional returns apart from the appreciation in gold price.