New Delhi: The government's proposed policy on sovereign gold bonds would provide investment choice to consumers and integrate gold further into regulated financial sector, the World Gold Council said on Friday.
With a view to curb demand for physical gold, the government on Friday proposed to issue sovereign gold bonds. A discussion paper has been floated on the scheme for which comments are invited till July 2.
"Any step that increases consumer choices and makes gold a fungible asset class is good. ...Gold investment products which integrate gold further into the regulated financial sector are a positive development," WGC India Managing Director Somasundaram PR said.
Sovereign gold bonds will allow savers to easily sell or trade bonds on commodity exchanges and key features such as the ability to use them as collateral for loans and capital gains tax treatment similar to gold could be useful to investors, he said in a statement.
"Our research confirms the growing interest among Indian consumers for interest-bearing gold-based investment products. Having said that, majority of Indians prefer gold in physical form and even jewellery is recognised for the value of the gold content ? so the investment intent is implicit in all that is gold."
India, the world's largest consumer of gold, imports around 800-900 tonnes of gold annually, the second-biggest item after oil.
