RBI bets on gold! Reserve Bank of India buys half a tonne of gold in June; yellow metal fastest growing component of India's forex reserves
RBI gold reserves: After a relatively conservative spell of gold buying, the
Reserve Bank of India
(RBI) stacked up almost half a tonne of gold in the last week of June. In India's foreign exchange reserves, gold has shown the most substantial growth in recent years, with its value increasing by more than 80% over five years.
The proportion of gold in India's foreign exchange reserves rose to 12.1% as of July 18, 2025, compared to 8.9% on July 19, 2024.
The central bank's gold holdings increased to 879.8 tonnes as of June 27, showing a rise from 879.6 tonnes recorded the week before. The addition represents a purchase of 4 quintals during this period.
Gold, serving as a protection against inflation, has recently gained substantial institutional support.
According to World Gold Council (WGC) statistics, central banks' gold acquisitions exceeded 1,000 tonnes annually for three consecutive years, marking a notable increase from traditional purchasing patterns.
"While safety and liquidity constitute the twin objectives of reserve management in India, return optimisation is kept in view within this framework," states the central bank's latest report on foreign exchange reserves.
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Despite gold generating one of the highest returns in India, the central bank rarely disposes of its gold assets.
According to central bank data, RBI's most recent gold acquisition occurred in the last week of March.
Investment-wise, gold yielded approximately 26% returns during the initial six months of this calendar year in India, as per WGC calculations. Only Turkey surpassed India's returns, exceeding 40%.
India's gold returns surpassed those denominated in major currencies like the pound sterling, Japanese yen and euro, as well as the Chinese renminbi, despite China being one of the primary gold consumers.
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