The Reserve Bank of India (RBI) has disclosed the premature redemption price for Sovereign Gold Bond (SGB) 2017-18 Series-XIII set to mature on Friday. Investors holding SGB 2017-18 Series-XIII, issued on December 26, 2017, can opt for early redemption at Rs 13,563 per gram. These bonds have an eight-year maturity period, with the option for premature redemption from the fifth year onwards.
The initial issue price of this SGB was Rs 2,866 per gram without any discount, resulting in investors achieving a 381.6% absolute simple return. Additionally, investors receive 2.5% annual interest paid semi-annually, enhancing the effective yield. The final redemption price is determined based on the average closing price of gold of 999 purity over three business days.
SGBs are government-backed securities denominated in grams of gold, offering a digital alternative to physical gold ownership with returns based on price appreciation and semi-annual returns. Holding SGBs until maturity or the premature redemption date allows investors to avoid capital gains taxes. The returns from these bonds reflect gold’s performance over the past five years, influenced by factors such as central bank buying, US Fed rate expectations, concerns over US tariffs, geopolitical tensions, and strong inflows into gold and silver ETFs.
Experts anticipate a further rise in gold prices due to escalating geopolitical tensions and challenges to the US dollar’s reserve status. In international markets, spot gold prices climbed over 0.5% to $4,501.44 per ounce, driven by growing tensions between the US and Venezuela. Traders are factoring in two quarter-point Fed rate cuts in 2026 amidst cooling inflation and softening labor market conditions, combined with safe-haven demand stemming from rising geopolitical uncertainties.
