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  • Writer's pictureSahastha

Sovereign Gold Bond Scheme 2020-21 Series VII – Our view

Updated: Oct 4, 2023

Sovereign Gold Bond Scheme 2020-21 Series VII opens today (Monday 12th oct 2020) with a issue price of ₹5051/gm against the last issue price of ₹5117/gm. Considering fall in price of gold and festival season around the corner, are you thinking to add it in your portfolio? Read below to understand if you should invest in it or not? Gold is a cyclical and momentum asset means there is just more to gold than pure profits. People who buy at one end of cycle might find them stuck in it for years to recover just the cost. Just like any other risky assets, entry and exit points matter in gold as well. Just foolishly investing at any point of time without looking at the prices is asking for trouble. Please read this post to know more about volatility in gold prices.

Better opportunity

Also doing little bit of research might help you to find it much better bargain in open market for SGB. Take a look at the SGB series X 2019-2020 issue price which was trading at ₹4730 in secondary market on 9th October 2020. This is a sweet discount of ₹321 per gram for same security with little bit less of a holding period.

2.5% interest looks tempting at first but personally I don’t see any ludicrous opportunity of money making from the interest itself. Interest will attract tax in hands of receiver and should not be the sole point of decision to buy SGB.


Sovereign Gold Bond is a open ended scheme from Govt of India. So, it means, you can buy and sell in secondary market anytime. Only thing which will change is the nature of taxation, as capital gain tax is free if you hold it till maturity (8 years) but if you sell it in profit before maturity then you have to pay capital gain tax.

Our trade and future views

We have advised the same march series quoted above to the clients at ₹4210 (buy) in march and advised exit in July-Aug at ₹5000 in secondary market giving us a sweet 18.76% return in very less time. Our thoughts on current gold price is bearish and we will add more gold to portfolio below ₹4200-4400 price bracket only.

Note: View on gold prices is personal and it should not seen as recommendation of investment at any particular price. Investor should do their own research or hire a professional before investing in risky assets.

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