Gold

New Delhi: India on Wednesday approved a new sovereign gold bond scheme, as also a monetisation scheme to incentivise people to park their gold assets in a paper format and earn interest, while seeking to productively use vast amounts of this idle metal in the economy.

Under the gold bond scheme, approved by a meeting of the cabinet presided over by Prime Minister Narendra Modi, up to 500 grams worth of bonds per annum can be bought by an individual with lock-in of five-seven years and appropriate interest so that they are protected from volatility.

The gold monetisation scheme, also approved on Wednesday, calls for people to deposit their gold with authorised agencies for a short-, medium- or long-term periods, for which they will be given certificates of holding, Finance Minister Arun Jaitley said at a briefing.

“This will also bear interest,” Jaitley said, adding: “This has been done to replenish the Reserve Bank’s gold reserves.”

According to the World Gold Council, an estimated 22,000-23,000 tonnes of gold is lying idle with households and institutions in India. The annual imports amount to around 850-1,000 tonnes valued at $35 billion to $45 billion.

Officials said the objective of these two schemes are three-fold: Mobilise idle gold with people, give a fillip to the gems and jewellery sector by making the metal available from banks on loan and reduce the reliance on imported gold and conserve foreign exchange.

In his budget speech on Feb 28, Finance Minister Arun Jaitley had said that the government will come up with two schemes for gold — one on monetisation, or permitting gold deposits with banks on interest, and the other on redeemable gold sovereign bonds also with fixed interest.

(Agencies)

by Tyler Durden, Zero Hedge

Just as China is buying ‘cheap’ oil with both hands and feet, so Russia, according to the latest data from The World Gold Council (WGC) has been buying gold in huge size. Dwarfing the rest of the world’s buying in Q3, Russia added a stunning 55 tonnes to its reserves, as The Telegraph reports, Putin is taking advantage of lower gold prices to pack the vaults of Russia’s central bank with bullion as it prepares for the possibility of a long, drawn-out economic war with the West.

Russia bought more gold in Q3 then all other countries combined.

As The Telegraph reports:

Vladimir Putin’s government is understood to be hoarding vast quantities of gold, having tripled stocks to around 1,150 tonnes in the last decade. These reserves could provide the Kremlin with vital firepower to try and offset the sharp declines in the rouble.

Russia’s currency has come under intense pressure since US and European sanctions and falling oil prices started to hurt the economy. Revenues from the sale of oil and gas account for about 45pc of the Russian government’s budget receipts.

In total, central banks around the world bought 93 tonnes of the precious metal in the third quarter, marking it the 15th consecutive quarter of net purchases. In its report, the World Gold Council said this was down to a combination of geopolitical tensions and attempts by countries to diversify their reserves away from the US dollar.

By the end of the year, central banks will have acquired up to 500 tonnes of gold during the latest buying spell, according to Alistair Hewitt, head of market intelligence at the World Gold Council.

“Central banks have been consistently adding to their gold holdings since 2009,”Mr Hewitt told the Telegraph.

India’s cabinet approves new gold bond scheme with interest

Putin "prepares for economic war", buys whopping 55 tonnes of gold in Q3

KNOW US

GET INVOLVED

PROMOTE

Archives