SGB is the best way to invest in gold. Where and how to buy.

Gold has seen a sharp rise in prices recently, rekindling investor interest in the precious metal. While it may not match equities in long-term wealth creation, gold continues to serve a meaningful role as a portfolio diversifier and hedge. So, how do you invest in gold? Among all the ways—physical gold, exchange-traded funds (ETFs) , mutual funds , digital gold— sovereign gold bonds (SGBs) stand out for multiple reasons. Issued by the Reserve Bank of India and backed by the government of India, SGBs provide a guaranteed 2.5 per cent interest over and above the change in the prices of gold. Additionally, if held till maturity, the capital gains are tax exempt. That said, the RBI hasn't launched any new tranches after February 2024. And going by various media reports, fresh tranches are unlikely to be launched in the near future. So, if you want to invest now, the only option is to buy the existing gold bonds from the stock exchange. That said, there are a few things you must consider before buying SGBs from the stock exchange. Here's what you must check before buying Hard to Buy or Sell Easily The biggest issue with buying Sovereign Gold Bonds (SGBs) from the stock market is low trading activity. Many SGB series barely trade, and even the popular ones see only a few buyers and sellers each day. This can cause problems like: A big gap between the price you can buy at and the price you can sell at Trouble selling quickly when you need the money Being forced to sell at a lower price if the market isn't in your favour Here's a snapshot of the top-10 SGB tranches based on their trading volume. Most actively traded SGBs and how they are priced Tranche Maturity Last traded price (Rs) Volume Value (₹ crore) Premium / Discount (%) SGBSEP31II Sep-31 9,330 1,881 1.75 -1.39 SGBFEB32IV Feb-32 9,550 1,647 1.57 0.94 SGBMAY29I May-29 9,274 1,073

This article was originally published on May 15, 2025.