Posted on April 23, 2025, by Niftynews
As gold prices soar to a historic ₹1 lakh per 10 grams, Sovereign Gold Bond (SGB) investors are weighing their options, with many contemplating profit booking after seeing impressive returns. With a 221% return for investors who bought in 2017, the decision to sell or hold SGBs is becoming a crucial one.
Let’s dive into the latest developments and options for SGB investors, as well as expert advice on whether to cash out or hold on to these lucrative investments.
💰 Sovereign Gold Bond Prices Hit Record High
Gold prices have seen a 26% increase since January 2025, reaching ₹1 lakh per 10 grams on Monday, and marking a 33% rise from the previous year. This surge in gold prices has sparked conversations among SGB investors, especially those who bought in 2017 when gold was priced significantly lower.
📊 Who is Benefiting from SGBs?
For investors who purchased SGBs between May and October 2017, when the price of gold was approximately ₹2,830 to ₹2,987 per gram, returns are now hovering around 221% as their bonds approach maturity. This translates into a substantial profit for those who timed the market well.
Additionally, investors from April 2020, who bought gold at ₹4,639 per gram, are now looking at 101% returns after completing their mandatory five-year lock-in period.
🏅 Trading Options for Sovereign Gold Bonds
As gold prices hit record highs, SGB investors are considering their exit strategies. Here are the trading options available:
- Sell on Stock Exchanges: Investors can sell their bonds on the exchange at any time, as long as they’ve completed the minimum holding period.
- Early Redemption: SGBs offer early redemption via the government’s repurchase scheme, which is available twice annually after the bond has completed five years.
- Maturity Redemption: If held until the eighth year, SGBs will be redeemed, and the investor will receive their accumulated capital, along with interest.
🔑 Expert Advice on SGB Investments
Financial experts are advising that investors maintain 10-15% of their portfolio in gold, due to its role in providing stability and serving as a hedge against inflation. Gold also performs well during periods of international conflict or economic instability.
💡 Why Choose Sovereign Gold Bonds?
According to Nikhil Gupta, founder of Sage Capital, SGBs offer multiple advantages over physical gold:
- 2.5% annual interest paid to investors
- ₹50 discount on digital purchases
- No storage costs or management fees
- Tax-free capital gains upon maturity
These benefits make SGBs an attractive option for long-term gold investors.
⚖️ Should Investors Sell or Hold SGBs?
While it may be tempting to book profits after such impressive returns, experts like Gupta recommend holding onto SGBs until maturity, especially for investors with 10-15% gold exposure. This allows them to enjoy the annual interest and the tax-free capital gains upon maturity.
For those with a larger portion of their investments in SGBs, it may be wise to diversify into other asset classes like debt or equity once the bonds mature.
📅 Gold’s Role in Investment Portfolios
Gold has long been regarded as a safe haven during times of economic volatility, and with inflation concerns growing globally, having a portion of one’s portfolio in gold can provide a much-needed cushion. Financial planners often recommend a 10-15% allocation to gold in order to balance risks and enhance the overall stability of the portfolio.
🔎 Takeaway: What Should SGB Investors Do Now?
As gold prices reach record highs, investors in Sovereign Gold Bonds are in an excellent position. Those who have held onto their bonds since 2017 are seeing massive returns. However, whether to sell or hold depends on your investment goals and your overall portfolio strategy.
For long-term investors, holding until maturity to benefit from interest payments and tax-free capital gains may be the best course of action. For those looking to diversify their portfolios, it might be time to consider shifting some profits into other investment avenues.
🚨 Disclaimer
This article is for informational purposes only. Always consult a certified financial advisor before making any investment decisions. Gold prices and investment strategies are subject to market risks, and it is crucial to evaluate your risk tolerance before making any changes to your portfolio.
