Investors see more sheen in paper gold this year amid lower prices

So far, FY21 has seen sale of 32.4 tonnes worth of sovereign gold bonds and 13 tonnes of exchange-traded funds

Paper gold has gained strong traction with investors this year, given the high sales of sovereign gold bonds (SGBs) and exchange-traded funds (ETFs).

In FY21, the Reserve Bank of India (RBI) raised Rs 16,049 crore through sales of SGBs equivalent to 32.4 tonnes.

The next issue of SGBs is expected next financial year.

Considering the estimates of gold sold through ETFs, investment in paper gold is estimated at over 46 tonnes in FY21.

Compare this with the estimated physical gold demand for investment in FY21 at around 135 tonnes (demand at 102 tonnes in April-December). It appears that a fourth of the physical demand