Should you redeem your Sovereign Gold Bonds now as gold hits record highs?

With gold prices scaling record highs, Sovereign Gold Bond (SGB) investors find themselves at a critical juncture — redeem now and lock in handsome gains, or stay invested in hopes of even greater returns. The Reserve Bank of India’s (RBI) recent notification of premature redemption windows from April to September 2025 has intensified the dilemma. As the yellow metal shines brighter than ever, investors are carefully evaluating whether to cash out and capitalise on the rally, or hold their bonds for potentially higher payouts and continued interest accrual until maturity.

Adhil Shetty, CEO of BankBazaar, said, "The current high gold prices have many investors in the 2019-20 Series V Sovereign Gold Bonds considering their options. The RBI has specified that the earliest you can cash out early is today, April 15, 2025. The price you'd receive is ₹9069 per unit, based on the average gold price from the last few trading days (April 8th, 9th, and 11th, 2025). So, while the option to redeem early is there with a known price, deciding if it's the best move requires thinking about your overall investments, financial goals and what you expect from gold in the future.

The government has halted its new Sovereign Gold Bond (SGB) issues and the end of Gold Monetisation Scheme (GMS) deposits with a long-term horizon. This decision was taken largely due to the rise in gold prices and concern about the implication of future repayment. SGBs are redeemed at the market price of gold at the time of redemption, so an uptick in the price of gold has increased the government's future liabilities.

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL), said, "RBI has announced premature redemption of this SGB at ₹9096/gm which had 455,776 grams subscribed at the Issue price of ₹3788/gm. Those who invested in this SGB issue got a capital gain of ₹5281/gm, which is tax-free. Moreover, Interest Income is ₹473.50, therefore Total Gain per gram is ₹5754.50. This investment has fetched over 150% return over a 5.5-year time period, and approximately 17% CAGR returns, which is far better than equity returns."

"If inflation stays sticky and there is a slowdown in global growth, it is possible that gold might breach the ₹1 lakh/10g mark in India. The retail and ETF demand may remain robust as gold is still serving as a hedge against volatility. Gold may experience some short-term price corrections but investors need to consider a hold or accumulate strategy, that is they can buy on dips for a long-term allocation. Investors who already have gains may consider a partial profits book but gold will continue to remain an essential diversifier in uncertain times," said Kothari.

Additionally, Mahendra Luniya, Digital Gold Expert, Chairman, Vighnaharta Gold Ltd, said, "The 2019-20 Series V Sovereign Gold Bonds are nearing their five-year maturity, giving investors the option to sell and book profits, especially with gold prices at record highs. However, if your financial goals are long-term in nature, we recommend staying invested. Despite the attractive returns now, gold continues to be a strong hedge against market volatility and inflation, making it a valuable component of a balanced portfolio."