Page 36 - Bullion World Volume 4 Issue 3 March 2024

Bullion World | Volume 4 | Issue 3 | March 2024

Gold Somsundaram PR, Regional CEO (India), World Gold

Council, said SGB has been successful in attracting
a separate set of financial investors who were looking
for investment in gold without the hassle of owning it
physically. Last November, the central bank redeemed
the maiden tranche of SGBs, which had more than
News doubled investment in eight years. The first tranche of

SGB, which was issued at ₹2,684 per gm in November
2015, was redeemed at ₹6,132 per gm. This apart,
investors had earned an interest of 2.75 per cent per
annum (reduced subsequently to 2.50 per cent).
Govt doubles gold bond issuance Next issuance

to ₹3,500 crore for next fiscal The next issuance of SGB will be open for subscription
between February 12-16. The RBI had issued three
Sovereign Gold Bond, administered by the RBI, has SGBs last year in the price range between ₹5,923 and
turned out to be another preferred investment avenue ₹6,199 per gm.
rather than suppressing physical gold demand and
keeping current account deficit under check by SGBs have a tenour of eight years with an option to
controlling imports. redeem prematurely after fifth year. The maximum limit

of subscription is 4 kg for individuals and 20 kg for trusts
The Budget has more than doubled SGB issuance for and similar entities per fiscal year.
next fiscal to ₹3,500 crore against ₹1,500 crore logged
in the financial year ended March 31, 2023. It has also Abhay Khona, CEO, Smart Investment Advisors, said
retained the Budget estimate for this fiscal at ₹1,500 it is very difficult to divert physical demand for gold to
crore against ₹402 crore raised last fiscal. financial instruments as owning gold jewellery is not only
social security but also imbibed in the Indian culture.
Incidentally, gold imports have jumped 20 per cent to Moreover, he said investment in SGBs is still restricted to
781 tonnes last year even as the run-away prices have sophisticated investors in urban cities and not marketed
suppressed demand, according to the World Gold by distributors across India.
Council data.

WGC: Robust Central Bank Purchases
Offset Gold ETF Outflows in 2023

The Gold Demand Trends Report for the full year 2023, The central bank gold net purchases totalled 1,037
published by the World Gold Council (WGC) noted tonnes, falling short from the 2022 record purchases by
that robust central bank buying coupled with resilient just 45 tonnes. The bar and coin investment demand
jewellery consumption helped to offset sizable gold ETF witnessed marginal decline by 3% over the previous
outflows during the year. year, WGC report said.

According to the report, the global gold ETFs recorded Meantime, the gold mine production recorded marginal
outflows of 244 tonnes in 2023. The pace of outflows increase by 1% year-on-year to 3,644 tonnes in 2023.
witnessed significant slowdown towards the end of the The comparable figure in 2022 was 3,624.8 tonnes. The
year. However, the hefty outflows in October resulted in recycling gold supply surged higher by 9%. As a result,
high outflows during Q4. the total gold supply, at 4,898.8 tonnes, edged higher by
3% over the supply of 4,751.9 tonnes in 2022.
The annual jewellery consumption remained more or
less steady at 2,093 tonnes in 2023, despite high gold Source: https://www.scrapmonster.com
price environment that prevailed during the year. The
consumption growth was supported by recovery in
China.

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