The price of 24-carat gold of 999 purity surged to Rs 72,527 per 10 grams in the early phase of counting votes for the 18th Lok Sabha on June 4 as numbers moved back and forth in favour of the two alliances, the National Democratic Front (N.D.A) and the Indian National Developmental Inclusive Alliance (I.N.D.I.A), and the stock market tanked over the uncertainty of the final results. In contrast, when the market saw record highs the previous day in anticipation of the caretaker government returning to power following the exit polls, gold prices were stable at Rs 71,776. As per the Indian Bullion and Jewellers Association Ltd (IBJA), the yellow metal prices closed at Rs 71,969on June 4 after the jump in the morning hours.

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As none of the alliances could reach the majority mark of 272 in the 543-member parliament, a political race to rope in regional satraps has begun, and whichever side stakes claim to the magical number first will be the favourites to form the government. Nevertheless, while the country’s political landscape takes shape, all eyes are on the stock market.

Gold prices typically move opposite of stock yields as seen on the counting day and the day before. Many factors, both domestic and international, can impact gold prices. However, its prices generally remain stable during market volatility.

Let’s look at the six tranches of sovereign gold bonds (SGBs) due for premature withdrawals in June. As per the Reserve Bank of India (RBI), “Though the tenor of the bond is 8 years, early encashment/redemption is allowed after the 5th year from the date of issue on payment dates.”

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Here are the details:

SGB Tranches Coupon Payments In June 2024

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Source: RBI website

Besides these SGBs, two tranches of 2017-18 and 2018-19 SGB series are due for coupon payment on July 1, 2024, for which the request can be sent till June 21, 2024.

Their details are below:

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Source: RBI website

Interest is credited automatically to investors’ bank accounts. For withdrawal before maturity, they must request the ‘concerned bank/SHCIL offices/Post Office/agent 30 days before the coupon payment date. Request for premature redemption will only be entertained when the investor approaches the concerned bank/post office at least a day before the coupon payment date. As per RBI FAQs, the proceeds will be credited to the customer’s bank account provided when applying for the bond”.

SGBs do not charge investors like gold jewellery. They are easy to manage and tax-free if held until maturity.

SGBs are a secure investment in gold with an eight-year maturity. They provide 2.5 per cent interest paid half-yearly. While the interest is taxable, the proceeds received on maturity are tax-free. SGBs offer liquidity, as one can withdraw them before maturity, though the gains on premature withdrawal are taxable.