Govt to offer gold bonds to check gold rush

This Deepavali, the government will compete with jewellery retailers with more attractive offers on gold bonds to be launched in the next 10 days.

But it remains to be seen whether Indians will shun their penchant for jewellery as jewellers are offering freebies, easy returns, gift vouchers and the likes to capitalise on festive demand.

“There will be more handsome offers on the latest round of Sovereign Gold Bonds. The idea is to wean away people from storing gold. The idea is to bring gold back in the system so that investment levels go up,” an official told DH.

A better than expected monsoon and implementation of the 7th Pay Commission award are expected to boost spending. The recent crash in gold prices is expected to give an added impetus to the festive season demand.

Gold prices have dropped 5% in the last one month. Traders expect the rates to drop further in the coming weeks if US non-farm payroll data, expected to be released on Friday, turns out to be positive.

According to the apex jewellers body All India Gem & Jewellery Trade Federation, sale of gold jewellery is expected to grow by 40% in value terms. “While jewellers will be looking at profits, the government is trying to reduce the import of the yellow metal further. This is the best time to come out in the market. This is the time Indians buy gold,” the official said.