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Now the most important question is, which form of gold is best
for investments?
Tenor of these bonds is 8 years with exit of available from 5 th year onwards
No capital gain tax on redemption
Why Sovereign Gold Bonds is better than buying physical Gold or even
investing in Gold ETFs?
Parameters
Physical Gold
Gold ETFs
Returns
Safety
Risky of Handling
High
High
Purity
Remains A Question
Collateral for
Loan
Yes
No
Yes
Tradability
Conditional
Tradable on Exchange
Tradable on Exchange
Exit- 5th yr onwards
Storage Cost
High
Very Low
Very Low
Tranche
Issue Period
Issue Price
(INR per gram)
Appreciation
2684
3150
17.3%
II
2600
3150
21.1%
III
2916
3150
8.0%
IV
3119
3150
1%
In the past one year alone, gold has risen 17.3% from INR 26,655 on 31 Aug 2015 to INR 31,255 on
30 Aug 2016 and experts predict that the current gold rally in India is likely to continue till the end of
the year, possibly beyond.
However, if sold in the secondary market capital gains arising on such transaction will taxed @ 20% with
indexation if sold on or after three years and would be subject to a marginal tax rate if sold before three years
Gold Prices are up 25% in 2016 (YTD) after delivering negative returns for 3 years
35,000
31,050
30,000
29,600
26,500
26,400
28,900
28,300
25,000
18,500
20,000
15,000
12,500
14,500
10,000
10,800
5,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
(YTD)
No indications of Interest
rates hike will result in higher
Gold prices.
Heightened risk aversion amid extreme global capital market uncertainty has turned the wave in
favour of safe haven demand since the start of 2016. As a result, there has been a flight to safety and
safe havens like developed market sovereign bonds and gold.
Thank You