Behind the glitter of the gold bonds scheme
The week of September 11 saw India’s central bank run the latest issue of the Sovereign Gold Bonds (SGB) scheme, under which the government issues bonds to investors linked to the price of gold. For the government, it’s a way to raise money for its needs, from funding public expenditure to plugging gaping deficits. For investors, it’s an investment option, made attractive in recent years by the solid performance of gold as an asset class. This, however, should not be taken for granted.