New Delhi: In a strategic move reflecting global economic shifts, the Reserve Bank of India (RBI) has purchased 57.5 tonnes of gold during the financial year 2024-25. The sharp rise in gold investments comes amid heightened global financial market volatility and a significant surge in gold prices, which climbed over 30% during the period.
This latest gold acquisition marks the second-largest annual purchase by India’s central bank since it began systematically building gold reserves in December 2017. Central banks worldwide have followed a similar path, ramping up their gold holdings to mitigate risks associated with currency fluctuations, geopolitical instability, and concerns about the reliability of US government bonds.
RBI’s Expanding Gold Portfolio
According to the latest RBI data, India’s gold reserves rose to 879.6 tonnes by March 2025, up from 822.1 tonnes in March 2024. Notably, the central bank’s highest annual gold purchase to date was 66 tonnes in FY 2021-22, followed by smaller additions of 35 tonnes and 27 tonnes in the succeeding fiscal years.
Experts attribute this renewed emphasis on gold investments to increased instability in the US dollar and the weakening appeal of US Treasuries.
Sajal Gupta, Head of Currency and Commodities at Nuwama, explained,
“All global central banks are reducing their dependence on US Treasuries and diversifying their reserves by increasing their gold holdings.”
Global Trends Reflecting a Move Toward Gold
The World Gold Council’s 2024 Trends Report also highlights this global phenomenon, citing persistent strong demand for gold from central banks. Key motivators include geopolitical uncertainties, fluctuating currencies, and a broader desire to de-risk foreign exchange reserves.
For India, gold now accounts for 11.8% of its total foreign exchange reserves as of April 11, 2025, compared to 8.7% a year earlier. This significant increase not only showcases India’s growing preference for gold but also underscores the impact of skyrocketing gold prices on boosting the valuation of its reserve assets.
RBI Among Top 10 Global Gold Holders
The RBI remains in the top ten list of global central banks by gold holdings. Unlike some central banks that actively trade their gold reserves, the RBI adopts a conservative, safety-first approach, refraining from large-scale gold sales due to political and strategic considerations.
However, the pace of RBI’s gold accumulation slowed towards the end of the financial year. After consistent monthly purchases through November 2024, acquisitions dipped significantly in December, January, February, and March. Analysts at the World Gold Council suggest this slowdown could indicate a more balanced and cautious strategy in the central bank’s reserve management.
Conclusion
The RBI’s significant gold purchases in FY 2024-25 underline a strategic pivot towards securing safer assets amidst global economic uncertainty. As India continues to strengthen its gold portfolio, it not only insulates its reserves from external shocks but also cements its position among the world’s major holders of the precious metal.
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