What is the story about?
Investors in the Sovereign Gold Bond (SGB) 2019-20 Series VIII are set to realise substantial gains, as the government has announced a premature redemption price of ₹14,432 per gram for bonds eligible for early exit on Wednesday (January 21).
The tranche, issued on January 21, 2020, had an original issue price of ₹3,966 per gram. Based purely on price appreciation and excluding the 2.5% annual interest, investors stand to earn an absolute return of around 264% over six years.
In annualised terms, this translates into an approximate compound annual growth rate (CAGR) of 24%, reflecting the sharp rise in gold prices during the period.
According to the government notification, the redemption price is calculated as the simple average of the closing price of 999 purity gold over the previous three business days, as published by the India Bullion and Jewellers Association (IBJA). For this tranche, prices from January 16, 19 and 20, 2026 were used to arrive at the redemption value.
Under the Sovereign Gold Bond Scheme, investors are allowed premature redemption after the completion of five years from the date of issue, on interest payment dates. The full maturity period of SGBs remains eight years.
Market participants note that the returns highlight gold’s role as a long-term hedge during periods of global uncertainty, inflationary pressures, and volatile equity markets.
The tranche, issued on January 21, 2020, had an original issue price of ₹3,966 per gram. Based purely on price appreciation and excluding the 2.5% annual interest, investors stand to earn an absolute return of around 264% over six years.
In annualised terms, this translates into an approximate compound annual growth rate (CAGR) of 24%, reflecting the sharp rise in gold prices during the period.
According to the government notification, the redemption price is calculated as the simple average of the closing price of 999 purity gold over the previous three business days, as published by the India Bullion and Jewellers Association (IBJA). For this tranche, prices from January 16, 19 and 20, 2026 were used to arrive at the redemption value.
Under the Sovereign Gold Bond Scheme, investors are allowed premature redemption after the completion of five years from the date of issue, on interest payment dates. The full maturity period of SGBs remains eight years.
Market participants note that the returns highlight gold’s role as a long-term hedge during periods of global uncertainty, inflationary pressures, and volatile equity markets.
