Sovereign Gold Bonds

A Smarter way to Invest in Gold

What strikes your mind first when it comes to investments in Gold?

Most popular and an important

investment option.

A way of diversifying risk in the

portfolio.

Proven to have long term ability to

retain & appreciate its value.

Considered to be a safe haven

investment as it does not loses its
intrinsic value

Variety of options available for investments

like Jewellery, Bars, Coins, ETFs, Sovereign
Gold Bonds etc.

Now the most important question is, which form of gold is best
for investments?

Presenting Sovereign Gold Bonds

Sovereign Gold Bonds The concept
The Reserve Bank of India in consultation with Government of India has launched Sovereign Gold
Bonds Scheme in OCT-2015 with an objective to reduce the demand for physical gold and shift the
demand of domestic savings used for purchase of gold, into financial savings.

Salient features of Sovereign Gold Bonds:

Assurance of highest purity of gold denoted by 999

Fixed interest of 2.75% p.a. on the initial value of investment

Liquidity- Tradable and Listed on Exchange*

*These bonds will be listed from a date to be notified by RBI. However, Listed bonds have limited
liquidity and hence results in volatile prices, for the benefit of our customers we have enabled only
Limit orders.

Presenting Sovereign Gold Bonds

Sovereign Gold Bonds The concept
Salient features of Sovereign Gold Bonds:

Tenor of these bonds is 8 years with exit of available from 5 th year onwards
No capital gain tax on redemption

Can be used as collateral against loans.

No recurring annual expenses in these bonds

Free from issues like making charge and cost of storage

The best alternative to buy gold in physical form

Why Sovereign Gold Bonds is better than buying physical Gold or even
investing in Gold ETFs?

Parameters

Physical Gold

Gold ETFs

Sovereign Gold Bonds

Returns

Lower than Actual

Returns on Gold

Lower than Actual

Returns on Gold

Higher than Actual

Returns on Gold

Safety

Risky of Handling

High

High

Purity

Remains A Question

High- Electronic Form

Highest Purity denoted

by 999

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

Previous tranches of Sovereign Gold Bonds & Returns

Tranche

Issue Period

Issue Price
(INR per gram)

Issue price of Tranche IV

(INR per gram)

Appreciation

Nov 5-20, 2015

2684

3150

17.3%

II

Jan 18-22, 2016

2600

3150

21.1%

III

March 8-14, 2016

2916

3150

8.0%

IV

July 18-22, 2016

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.

Sovereign Gold Bonds - Tranche V

Capital gains tax has been exempted on redemption of these bonds.

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

Movement in Gold price

Gold Prices are up 25% in 2016 (YTD) after delivering negative returns for 3 years

AVERAG E YEARLY PRICE OF GOLD / 10GM SINCE 2007

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

Source: www.bankbazaar.com & www.ibjarates.com

2010

2011

2012

2013

2014

2015

2016
(YTD)

Outlook of gold market

Gold back in limelight Rally

expected to continue in India

Global uncertainty increased

the safe haven demand

No indications of Interest
rates hike will result in higher
Gold prices.

Right time to Rebalance Gold

Portfolio

Medium term outlook for

gold prices have improved

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.

How to invest in Sovereign Gold Bonds?

First, login to our website ICICIdirect.com using your login credentials.

Enter User Id, Password, Date of Birth/PAN, select

Mutual Funds to Start in and click on Login Now.

Now click on FD/Bonds page to invest in Sovereign Gold Bonds online

Thank You