RBI’s Sovereign Gold Bond due for premature redemption priced at Rs 13,563 per gram

New Delhi, Dec 26 (IANS) The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond (SGB) 2017-18 Series-XIII (SGBs) due on Friday.

SGB 2017-18 Series-XIII issued on December 26, 2017 can be prematurely redeemed at Rs 13,563 per gram. SGBs have an eight-year maturity, but investors can opt for premature redemption from the fifth year onwards.

This SGB was issued at Rs 2,866 per gram without discount and investors achieved 381.6 per cent absolute simple return.

These returns are in addition to 2.5 per cent annual interest paid semi-annually, which increases the effective yield. The final price is based on a simple average of the closing price of gold of 999 purity for the three business days

SGBs are government-backed securities denominated in grams of gold. They are considered as a digital alternative to holding physical gold and earning returns based on price appreciation and semi-annual returns. Investors can avoid capital gains taxes by holding SGBs until maturity or until the premature redemption date.

The returns from these tranches mirror gold’s returns over the last five years. Aggressive central bank buying, expectations of US Fed rate cuts, concerns over impact of US tariffs, geopolitical tensions, and robust inflows into gold and silver ETFs drove the gold and silver prices this year.

Experts predict a further increase in gold prices due to the geopolitical tensions and threats to the US dollar’s reserve status.

International markets saw spot gold price rise over 0.5 per cent to $4,501.44 per ounce on Friday after earlier touching $4,530.60. Rising tensions between the US and Venezuela is the major factor driving gold prices higher.

Traders are pricing in two quarter‑point Fed rate cuts in 2026, as inflation cools and labour market conditions soften, and when coupled with safe haven demand due to rising geopolitical tensions, fuelled defensive buying.

—IANS

aar/na