-
Algos
-
Stocks
-
Trading
-
Strategies & Arbitrages
-
Mutual Funds
India’s central bank has stacked its vaults with gold — and the reasons go beyond just shiny numbers.
According to the Reserve Bank of India’s annual report, the value of gold held by the RBI rose 57.12% year-over-year, reaching a record-breaking ₹4.32 lakh crore as of March 31, 2025. The sharp surge was due to:
The move signals a strategic shift in India’s foreign reserve policy as it braces for mounting global economic uncertainty.
In FY25, the RBI added 54.13 metric tonnes of gold to its reserves — one of the largest annual increases in recent years. This takes total RBI gold holdings to 879.58 metric tonnes, up from 822.10 metric tonnes a year ago.
This accumulation reflects India’s alignment with global central banks that are boosting their non-dollar assets, preparing for a world that’s increasingly volatile — both economically and geopolitically.
Gold prices hit historic highs in FY25, with domestic gold crossing ₹1,00,000 per 10 grams in April 2025 — a 30% jump from the previous year. This rally was driven by:
Higher international gold rates meant that even without significant additions, the rupee value of RBI’s gold rose substantially.
The Indian rupee weakened against the U.S. dollar in FY25. Since gold is priced in dollars, the drop in the INR further inflated the rupee-denominated valuation of RBI’s holdings.
Even if global gold prices had remained flat, the currency effect alone would have caused RBI’s assets to swell in value.
RBI’s gold is divided between two departments:
Compared to FY24, both departments saw slight increases in quantity, but a massive jump in rupee valuation — due to price and currency dynamics.
One major external catalyst influencing central bank behavior is the return of Donald Trump’s tariff talk in the U.S. 2025 election cycle.
Trump’s proposed plans include:
Such protectionist moves could:
💡 More tariffs → more instability → more gold buying → higher prices.
India, with its exposure to both U.S. and Chinese trade routes, is wisely hedging its reserve portfolio with gold. The RBI’s decision to buy big and buy now aligns with this strategic macroeconomic foresight.
High gold prices may pinch retail buyers, but for India’s central bank, the metal has become an essential shield.
Want more insights like this on India’s evolving financial strategy, RBI moves, and market analysis?
👉 Follow TheAIBull on LinkedIn, Instagram, and X (Twitter) for trusted updates on the Indian economy, gold, and market moves that matter.
SBI Research predicts a 50-basis-point rate cut by RBI to revive India's slowing credit cycle, with repo rate transmission and liquidity trends in focus.
India's GDP growth for FY25 eased to 6.5%, its slowest in four years, but Q4 surprised with a robust 7.4% expansion. Here’s what drove the slowdown — and the unexpected recovery — along with RBI’s outlook for FY26.
