One question that my friends asked after reading the previous post “There are 4 series coming up for Sovereign Gold Bonds which one should I invest in?” “Should I wait for the Gold price to fall more and invest in later one”
I wish I had a method of prediction but unfortunately, I don’t. Gold prices fluctuate a lot on a day to day basis. There is a chance that gold prices may go up and an equal chance that they may come down in the next 4 months. However, the general trend is upwards. Unless you are thinking if “Trading” and not investing, it should not matter much. One way to work around volatility is to consider this investment also as SIP (Systematic Investment Plan).
Let’s say you want to invest Rs. 20000. You can divide this into 4 equal parts of 5000 each. Then invest 5000 in 2020–21 Series IX which opens on Dec 28th, followed by 5000 in 2020–21 Series X which opens on January 11 and so on. This will give you an average over the next 4 months.
Some people may feel that gold is too expensive right now due to pandemic and your thinking is justified. If you can time the market great. I personally have a very poor track record. Moreover, I don’t want to miss out on 2.5% interest.
Ultimately, it is your decision as it is your money.
Important Update: RBI has fixed the price of Series IX SGB at Rs. 5000. You can subscribe to it between Dec 28 2020 — Jan 01 2021 and start the new year on a positive note.
Government of India, in consultation with the Reserve Bank of India, has decided to offer a discount of ₹50/- per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. For such investors, the issue price of Gold Bond will be ₹4,950/- (Rupees four thousand nine hundred fifty only) per gram of gold.