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Gold At Record High Puts SGB Investors In A Dilemma: Sell Or Hold After 200% Gains?
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Gold rises to Rs 1,57,150 per 10g as investors seek safety. SGB holders weigh selling for profit or holding for interest and tax benefits.
Gold at Peak Levels: Is It Time to Cash Out of SGBs?
Gold prices have surged to a record high as investors flock to safe-haven assets amid escalating geopolitical tensions, the Indian rupee’s slide to a record low, and aggressive gold stockpiling by central banks.
In the domestic market, gold prices touched a fresh all-time high of Rs 1,57,150 per 10 grams.
Riding on the sharp rally in gold, Sovereign Gold Bonds (SGBs)—the government-backed investment scheme—have delivered exceptional returns to existing investors, with some tranches generating gains of over 200%.
With gold prices at elevated levels, SGB holders now face a key dilemma: should they book profits by selling in the secondary market or hold the bonds until pre-mature redemption or maturity to benefit from long-term returns and tax advantages? Market experts believe the decision lies on the objective of the holder.
Aakanksha Shukla, AVP–Wealth Management at Master Capital Services Ltd, believes selling SGBs before maturity can be a prudent portfolio move in the current environment.
“Investors sitting on substantial appreciation may prefer to lock in gains rather than risk a price correction, especially when gold prices have already exceeded long-term return expectations,” she said.
Shukla added that early redemption through RBI windows remains tax-efficient, as capital gains are exempt, and the proceeds can be redeployed into undervalued assets or diversified across equity and debt.
Echoing a balanced view, Thomas Stephen, Head–Preferred at Anand Rathi Share and Stock Brokers, said the decision largely depends on individual investment objectives. Selling at a premium can deliver attractive returns, particularly for bonds that have crossed the five-year lock-in period and are eligible for premature redemption or active trading on exchanges.
However, he cautioned that holding SGBs till maturity allows investors to continue earning the fixed 2.5% annual interest, along with any further appreciation in gold prices, while enjoying full capital gains tax exemption at maturity.
“Selling early may work for short-term profit-taking in a strong gold market, but holding till maturity can enhance overall returns through interest income and tax benefits if gold prices remain firm or rise further,” Stephen said.
Stephen further noted that many SGB tranches are currently trading at a premium in the secondary market due to record gold prices and strong retail demand, which has pushed prices above their underlying gold value. “Selling in the secondary market allows investors to lock in these premiums and realise profits now, especially for series that have already seen sharp appreciation over their issue price,” he added.
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
January 23, 2026, 18:30 IST
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