Business Standard

Are sovereign gold bonds a good idea?

Though SGBs were launched in November 2015, almost 35 per cent of the amount mobilised is in the current financial year


Gurbachan Singh
Common sense suggests that the demand for an asset should be high when its price is low, and vice versa. However, in practice, the demand for an asset is quite often high when its price is rising. And, the demand tends to be low when the price is low and falling. This appears to be true also for sovereign gold bonds (SGBs). These are denominated in terms of gold. The demand for SGBs is high now when the price of gold is high and rising. Earlier, when the price of gold was low, the demand for SGBs was low. 

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Jul 22 2020 | 12:45 AM IST

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