AN EMPIRICAL EXAMINATION OF GOLD INVESTMENT PREFERENCES AND THE EFFICACY OF SOVEREIGN GOLD BONDS FOR THE MIDDLE CLASS

Former Federal Reserve Chairman Alan Greenspan aptly stated that in the absence of the gold standard, there exists no mechanism to shield savings from erosion by inflation, thereby eliminating a secure store of value. This study elucidates the motivations and rationales underpinning the selection of gold as an investment asset, assess awareness and familiarity with Sovereign Gold Bonds (SGBs), compare the effectiveness of SGBs, and provide policy recommendations to enhance their adoption and efficacy. This research combines both descriptive and empirical methodologies, employing a well-structured questionnaire to survey 100 participants from a middle-class demographic. Findings indicate that a significant majority (80%) of respondents aged 50 and above are familiar with Sovereign Gold Bonds (SGBs), whereas in the 18-30 age group, a notable 53.1% lack awareness of SGBs. Moreover, a substantial portion of both female (56.3%) and male (47.5%) respondents exhibit limited awareness of SGBs. These outcomes accentuate the necessity for reforms in SGBs, a targeted financial instrument introduced by the Indian government to promote domestic gold investments and address challenges associated with high physical gold imports. The research proposes several strategic initiatives to enhance the adoption and accessibility of SGBs.