Gold bonds' popularity linked to investment demand

But govt's moves will provide more liquidity to SGBs in the secondary market

Despite the launch of the Sovereign Gold Bond (SGB) Scheme in November 2015, the government doesn’t seem to have been able to satiate Indians’ demand for physical gold. According to data from GFMS-Thomson Reuters, total gold import in calendar year 2016 was 510 tonnes. In the first half of 2017, gold imports stood at 508 tonnes. And the government has garnered only Rs 4,769 crore (17 tonnes in volume terms) from the sale of SGBs in as many as nine tranches. 

The government has responded by announcing sweeping changes to make the yellow metal more attractive to investors. But, while