Amid rising demand from investors, the government has offered clarity on the next possible release of Sovereign Gold Bonds (SGBs). While the public eagerly awaits new tranches of SGBs, the Finance Ministry has stated that any such decision will be made with a strong focus on prudent debt management & cost of borrowings.
The last SGB tranche (Series IV 2023–24) was issued in February 2024. Since then, the price of gold has surged more than 70%, creating a significant shift in the investment landscape. Given this sharp price increase, the ministry believes that temporarily holding off further issuances has been a financially sound move.
Government’s Strategic Pause on SGBs
Responding to a Rajya Sabha query, Minister of State for Finance Pankaj Chaudhary emphasised that the government is focused on keeping borrowing costs in check. He explained that any decision regarding the release of the next tranche of SGBs will be made only after thoroughly evaluating the cost implications.
“It is imperative for a prudent debt management strategy to carefully consider the factor of borrowing costs,” the minister noted."
This cautious stance comes at a time when the sovereign gold bond scheme has already shown impressive performance. As of March 31, 2025, the scheme has garnered subscriptions totalling 146.96 tonnes of gold, valued at approximately ₹72,275 crore, through 67 different tranches. Of this, 18.81 tonnes have already been redeemed by June 15, 2025.
Gold Monetisation Scheme: Evolution Over Time
The blog wouldn’t be complete without touching upon the Gold Monetisation Scheme (GMS). Launched in 2015 to tap into the enormous stockpile of household gold, GMS aimed to put idle assets to productive use. According to the government, India holds nearly 23,000–25,000 tonnes of gold, valued at over USD 1.4 trillion, mostly in households & religious institutions.
However, due to evolving market conditions—mainly the rising cost of gold—the government decided to discontinue the Medium- and Long-Term Gold Deposits (MLTGD) segment of GMS from March 26, 2025, while continuing the Short-Term Gold Deposits (STGD). The total gold mobilised under GMS up to March 2025 stands at 37.81 tonnes.
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Geopolitical Tensions & Gold Prices
Another key reason behind the pause in new SGB tranches is the sharp rise in gold prices, triggered by global geopolitical tensions. This rise has directly impacted the government’s borrowing cost, making SGBs a relatively expensive funding source at the moment.
The government clarified that the SGB scheme was never meant to be a standalone fundraising tool. Instead, it was designed to discourage the purchase of physical gold & encourage financial investments in gold-backed securities. Alongside SGBs, the government also mobilises funds through G-Securities, Treasury Bills, and other instruments."
Will There Be More SGBs Soon?
So, what lies ahead for the Sovereign Gold Bond scheme? The Finance Ministry has made it clear that upcoming tranches of SGBs will be announced only after a thorough cost-benefit analysis. While the long pause may have left investors waiting, it aligns with the government’s broader fiscal strategy.
In conclusion, whether you’re an investor tracking SGB subscription updates or someone evaluating gold investment schemes, it’s important to understand the fiscal logic guiding these decisions. With market volatility, rising gold prices, & external geopolitical factors at play, the government is expected to act cautiously but strategically in the months to come.
