Sovereign Gold Bond Investors Set to Book Over Threefold Returns on October 30

The Reserve Bank of India has set the redemption price for the 2019 Sovereign Gold Bond (SGB) tranche at ₹11,992 per gram. This price becomes effective for premature redemption starting Thursday, October 30. Investors who purchased these bonds in October 2019 at ₹3,788 per gram are set to book returns exceeding threefold, approximately a 217% gain, before considering the 2.5% annual interest paid separately on these bonds. The redemption price is determined by the simple average of gold prices (999 purity) for the three business days: October 27, 28, and 29, 2025, as reported by the India Bullion and Jewellers Association. Investors can opt for premature redemption after five years from the issue date, provided it falls on an interest payment date. The process involves submitting a redemption request to their bank, post office, or depository, after which proceeds are credited to their registered bank account. The Sovereign Gold Bond Scheme, launched in 2015 by the government, offers an alternative to holding physical gold, providing investors with annual interest and exposure to gold price movements. The government has mobilized approximately 146.96 tonnes of gold, valued at about ₹72,275 crore, across 67 tranches up to March 31, 2025. As of June 15, 2025, investors have redeemed 18.81 tonnes. Minister of State for Finance Pankaj Chaudhary noted that rising global gold prices, driven by geopolitical uncertainty, have increased the government's redemption costs. Impact: This news highlights the significant returns achievable through Sovereign Gold Bonds, potentially boosting investor confidence in such instruments and influencing demand for gold and SGBs in India. It may also affect broader investment patterns in the country. Rating: 7/10. Difficult terms: Sovereign Gold Bond (SGB): A government-backed bond that serves as a substitute for holding physical gold. It provides investors with an annual interest payment and is linked to the price of gold. Premature Redemption: The act of redeeming a financial instrument before its scheduled maturity date. For SGBs, this is typically allowed after a lock-in period on specific interest payment dates. India Bullion and Jewellers Association (IBJA): An apex national jeweler association that plays a key role in price fixation and standardization of gold and silver in India. Geopolitical Uncertainty: A state of instability or conflict in international relations, which often causes investors to move towards safe-haven assets like gold.