RBI's Golden Strategy

The Reserve Bank of India (RBI) has made a significant move by purchasing almost half a tonne of gold in the last week of June, signaling a strong belief in the yellow metal's value amidst global economic uncertainties.

Gold's Growing Share in Forex Reserves

Gold has emerged as the fastest-growing component of India's foreign exchange reserves, with its value soaring by more than 80% over the past five years. The proportion of gold in these reserves has increased to 12.1% as of July 18, 2025, up from 8.9% on July 19, 2024.

Institutional Support for Gold

Gold's role as a hedge against inflation has garnered substantial institutional backing. The World Gold Council reports that central banks worldwide have been acquiring over 1,000 tonnes of gold annually for three consecutive years, a significant shift from previous trends.

RBI's Approach to Reserve Management

"While safety and liquidity are the primary objectives of reserve management in India, optimizing returns is also a key consideration," according to the RBI's latest report on foreign exchange reserves.

Gold's Impressive Returns

In India, gold has delivered approximately 26% returns in the first six months of this year, outperforming many major currencies. This performance underscores gold's appeal as a stable and lucrative investment.