Why is Gold a safe instrument?

Last updated: 06 Jul, 2020 | 05:51 pm

Why is Gold a safe instrument?
  • Central banks and governments around the world are scrambling to prevent their economies from going into a recession. 
  • Primary way to do this is to extend credit to companies so that they can stay afloat to tide over this crisis and keep people employed. 
  • The US has already extended an economic stimulus of over $2 Trillion with much more to come. This money printing and piling up of debt on countries increases the risk of their currencies and treasury as the higher debt levels increases risk of default.

This devaluation and volatility of currencies and increasing Sovereign debt vaults Gold to become a flight to safety investment. Countries maintain reserves of gold to support their currency volatility and hedge their risks. With Balance sheets across the world expanding (more debt levels), these reserves are more important than ever. The chart below compares India's gold reserves with some other major economies.

All this adds up to a favourable medium term environment for Gold prices and a great way to take exposure is via the Sovereign Gold Bond route issued by RBI on behalf of the Government of India which give you a fixed coupon rate as well as tax advantages!

Salient features and benefits of SGBs 

  • The latest tranche of sovereign gold bonds (2020-21 - Series IV) opens for subscription from tomorrow (6th July). The issue will close on 10th July, 2020
  • Fixed price of Rs 4,852 per gram and an attractive Rs 50 discount for online application
  • Coupon rate of 2.5% per year
  • Tax-free capital gains at maturity. This is an exclusive benefit available on gold bonds
  • Minimum investment at just one gram
  • No GST, (a 3% GST is levied on gold charges)
  • Reach out to your personal family wealth office to help you invest in SGBs! Click on the Ask Advisor button below!

Finzoom Investment Advisors Private Limited (Brand Name - INDmoney, INDwealth, IND.app, IND.money, INDsave.com) makes no warranties or representations, express or implied, on products and services offered through the platform. It accepts no liability for any damages or losses, however, caused in connection with the use of, or on the reliance of its advisory or related services.

Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. Performance and returns of any investment portfolio can neither be predicted nor guaranteed.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Marketing and distribution of various financial products such as loans and deposits are powered by Finzoomers Services Private Limited.

INDmoney, INDwealth, IND.app are brand and product of Finzoom Investment Advisors (P) Limited.

© Finzoom Investment Advisors Private Limited

[SEBI RIA Registration No: INA100012190] [Type of Registration: Non-Individual] [Validity of registration: December 17, 2018-Perpetual] [Address: 616, 6th Floor, Suncity Success Tower, Golf Course Extension Road, Sector – 65, Gurugram, Haryana- 122005] [Principal Officer details: Mr. Gaurav Sharma, Email id: principalofficer@indwealth.in, Contact No. 8800826254] [Corresponding SEBI local office address: Securities and Exchange Board of India, Local Office, First Floor, SCO 127-128, Sector 17C, Chandigarh-160017]

[ARN - 151913] [Platform Partner : BSE (Member code-24801)] [CIN - U67190HR2018PTC073294] [GST No : 06AADCF3538Q1Z8]