The current SGB issue is priced lower in comparison to other five series that have come up this year. The issue price of the SGB this time is Rs. 4,732 per gm.
Now here are given few points as to why you can buy into the current SGB series:
1. There is no upcoming SGB issue:
Sovereign gold bond investment is the best paper gold investment as it other than capital appreciation offers interest pay-out which is payable twice. Also, there is no hassle pertaining to storage cost or theft as in the case of physical gold.
2. Gold helps to diversify your portfolio and hedge against risk from other investments:
Amid geo-political or economic crisis, when there is pressure mounting on equities and other similar assets, gold tends to outperform, this is very well noticed during the last year, when gold yielded good gains.
3. Investments over time can exponentially increase your wealth:
Gold has the power to exponentially increase your wealth and this can be pointed out from the fact that its holding over the years has yielded multi-bagger returns and even beyond 500% in a decade. One may go wrong with equity holdings but never with gold in case of long term investments.
Now as the Fed tapering is likely due and with it interest rate shall also be hiked, gold will lose its sheen further and hence we see a pressure on gold prices going forward, so the best take can be to partly invest and keep some cash for future allocation to gold as the SGB may be then available at still cheaper rates.
"Gold prices have been trading sideways for the past few days. However, it has recovered much of its losses witnessed in August. Moving forward, gold prices will be guided by the impact of the Delta variant of Covid-19, the geo-political situation in Afghanistan, and most importantly how the Fed signals tapering and manage the rising inflation in the US," Nish Bhatt, Founder & CEO, Millwood Kane International, which is an investment consulting firm.