Sovereign Gold Bonds: Will SGBs Return Amid Soaring Gold Prices?

• The Ministry of Finance is reviewing policy suggestions ahead of the Union Budget 2026, with discussions on reintroducing Sovereign Gold Bonds (SGBs) gaining traction due to record-high gold prices.
• SGBs were a popular investment, offering 2.5% annual interest, appreciation benefits, and tax-free redemption at maturity, making them an attractive alternative to physical gold.
• The SGB scheme was discontinued in early 2024, with the last tranche (SGB 2023–24 Series IV) issued in February 2024; existing bonds continue to earn interest until maturity.
• Global uncertainties and a weakening US dollar have driven gold prices to record highs, with MCX gold reaching ₹1,58,339 per 10 grams, increasing investor demand for structured gold investment options.
• The government views SGB issuance as costly when gold prices are high and will decide on reintroduction based on market conditions, gold price trends, and borrowing costs compared to other instruments.

Why It Matters: Amid record gold prices, the government is weighing the reintroduction of SGBs against fiscal costs and market conditions.