Sovereign Gold Bond (SGB) 2019-20 Series-VII due for redemption today: Check details

The Reserve Bank of India (RBI) has announced the next premature redemption date for SGB 2019-20 Series VII issue as June 10, 2026. As per the RBI rules on Sovereign Gold Bonds (SGBs), premature redemption in SGBs is allowed after the fifth year from the date of issue of such bonds on the date on which interest is payable. So, accordingly, investors in the scheme, if required, may go for premature redemption.

The premature redemption price for the SGB series is fixed at ₹15,275/ unit. This is a decent price given the continuous slide in gold price currently.

The redemption price of SGB is based on the simple average of closing price of gold of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA). Here the three business days taken into account for calculating the redemption price are June 05, June 08, and June 09, 2026.

The SGB 2019-20 Series VII issue price was ₹3,745 per gram for online investors who got ₹50/ unit discount on their application. For offline investors, the price was fixed at ₹3,795 per gram. So, investors redeeming the investment prematurely can make a handsome return of 307%.

Gold prices are on a falling trend

Gold prices are on a losing streak for now as the inflationary and rate hike fears continue to dominate. Also, the dollar index is recovering to levels near 100, making dollar-priced bullion expensive for holders of other currencies.

Furthermore, as tensions between the US and Iran continue to escalate, oil prices are also gaining. Analysts largely anticipate more correction in gold prices in the near term after prices hit a record high early this year.