Page 36 - Bullion World Volume 4 Issue 3 March 2024_Neat
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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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