How The SGB Rate Is Calculated


2020-12-29 05:30:33

Gold Bond Price At Rs 5,000 Per Unit. Here's How The Price Is Calculated

The Sovereign Gold Bonds come with a maturity period of eight years.

Sovereign Gold Bonds: Bonds under the government’s Sovereign Gold Bond programme are available for purchase till Friday, January 1, 2021. This is a ninth tranche of the gold bond scheme, which will be followed by three more instalments — which will be available for five days each — till March 2021. For the current series, an issue price of Rs 5,000 per unit is applicable. One unit is equivalent to the price of one gram of gold in the spot market. But how is this price calculated?

Here’s how the SGB price is calculated:

The issue price for gold bonds is calculated using a simple average of prices provided by Mumbai-based India Bullion and Jewellers Association (IBJA).

(Also Read: All You Need To Know About Sovereign Gold Bonds)

Issue Prices Of Series I-VIII Gold Bonds  

Series (2020-21) Dates Issue Price
I April 20 – April 24 Rs 4,639
II May 11 – May 15 Rs 4,590
III June 8 – June 12 Rs 4,677
IV July 6 – July 10 Rs 4,852
V August 3 – August 7 Rs 5,334
VI August 30 – September 4 Rs 5,067
VII October 12 – October 16 Rs 5,051
VIII November 9 – November 13 Rs 5,177
IX December 28 – January 1 Rs 5,000

Closing rates of three days prior to the first day of subscription are taken into account, to arrive at this simple average.

Date Closing Price (Per Gram)
December 22 Rs 5,013.90
December 23 Rs 4,985.10
December 24 Rs 4,999.50
Average Rs 4,999.50
(Source: ibjarates.com)

For the ninth tranche of Sovereign Gold Bonds, the issue price of Rs 5,000 is calculated on the basis of gold rates of December 22-24 by IBJA. 

Launched in 2015, the Sovereign Gold Bond scheme is aimed at enabling investment in non-physical gold, wherein the RBI issues bonds linked to the market price of gold on behalf of Government of India. Each unit of the bond in the SGB scheme represents the current value of a gram of gold. The bonds have a maturity period of eight years. 

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