Why Invest in Gold?

Should you invest in gold? Is it a beneficial investment option to put in your hard-earned money? An answer to this question comes with two primary points. First is the fact that investing money in gold is worth it because it is a hedge against inflation. Over a period of time, the return on gold investment is in line with the rate of inflation. The other aspect that makes gold look like a good investment is its correlation to equity investments. Gold is negatively concurrent to equity investments. It has been noticed in the recent past that when equity markets perform poorly, gold performs well. Hence, gold as an additional investment in your portfolio may help in reducing the overall volatility of your portfolio.

Sovereign Gold Bonds Scheme

Announced in Budget 2015–16, the Sovereign Gold Bonds Scheme is linked to gold price and is expected to reduce the demand for physical gold. The bonds will offer the same benefits as physical gold. They can be used as collateral for loans and can be sold or traded on stock exchanges as they are available in demat form. At the same time, investors need not worry about holding physical gold. Until December 2015, the scheme had a total subscription value amounting to Rs 246 crore. The modalities government, has issued such instruments carrying an annual interest of 2.75 per cent per year. The tenor of the bond will be for a period of eight years, with exit option from the fifth year.

2015 and 30 November 2015. Sovereign Bonds were issued subsequently through banks and designated post offices across the country. buying physical gold, will offer investors a choice to buy bonds worth one gram of gold up to a maximum of 500 grams.

and subsequent tranches will be notified later. Salient features

gold and in multiples thereof.

(physical bonds).