The 2016-17 SGB Series I was issued on August 5, 2016. The SGBs are repayable on the expiration of eight years from the date of the issue of the gold bonds.
The redemption price of SGB is based on the simple average of closing price of gold of 999 purity of the week (Monday, July 29-Friday, August 2), preceding the date of redemption, as published by the India Bullion and Jewellers Association Ltd. (IBJA).
Meanwhile, the issue price of SGBs is based on the simple average of closing price for gold of 999 purity of the last three working days of the week preceding the subscription period. The RBI decides the price based on the price published by IBJA.
The SGBs are restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions. They are denominated in multiples of gram(s) of gold with a basic unit of one gram. While the tenor of the SGB is 8 years, investors have an option of premature redemption after the 5th year.Minimum permissible investment will be one gram of gold while the maximum limit of subscription is 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal year (April-March).On Friday, the October gold futures ended at Rs 69,792 on the MCX, flat over Thursday’s closing price. They gave-up most of their intraday gains after hitting the day’s high of Rs 70,965, rising by over Rs 1,000 per 10 gram after the US July unemployment numbers shot up on a month-on-month basis, raising hopes on September rate cut by the Federal Reserve. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)