Highlights
RBI gold buying hits 8-year low
In 2025, RBI purchased just 4.02 tonnes, down from 72.6 tonnes in 2024 (a fall of 94% YoY)
Total RBI gold reserves at record: 880.2 tonnes, despite a sharp slowdown in fresh buying
Gold share in forex reserves at an all-time high: Jumped from 10% to 16% in one year
Five-year shift: RBI’s gold exposure rose from 5.87% (March 2021) to 16% in 2025
Gold value in reserves: Over $100 billion as of November 2025
The Reserve Bank of India’s (RBI) 2025 gold purchases fell to their lowest level in eight years. RBI bought 4.02 tonnes of gold in total in 2025, compared to 72.6 tonnes in 2024, according to the World Gold Council’s latest report. Compared to the previous year, the RBI made almost 94% fewer gold purchases in 2025.
How much gold does the RBI hold?
Despite this slowdown, the RBI’s total gold holdings stand at a record 880.2 tonnes. At the end of 2024, it was 876.18 tonnes.
The share of gold in the RBI’s foreign exchange reserves also stands at a record high. As of November 2025, the RBI’s gold-based foreign exchange reserves stood at over $100 billion.
The substantial accumulation of gold in 2024, combined with a sharp rise in gold prices in 2025, has materially increased the share of gold in the RBI’s foreign exchange reserves – up from around 10% to 16% within a year.
The RBI may have paused gold purchases due to the rising proportion of total gold reserves relative to total foreign exchange reserves. WGC, in its report, says, “We believe these points to a measured approach in reserve management, with higher gold prices and the increased share of gold in foreign exchange reserves likely influencing the pace of additional purchases.”
RBI’s data show that the exposure to gold in India’s forex reserves (in dollars) was 5.87% in March 2021. In just five years, the RBI’s allocation to gold assets has increased from almost 6% to 16%.
Not all gold deposits are held within the country, as a large portion of the RBI’s gold reserves is stored in vaults abroad.
“As of March 2025, the Reserve Bank held 879.59 metric tonnes of gold, of which 511.99 metric tonnes were held domestically. While 348.62 metric tonnes of gold were kept in safe custody with the Bank of England and the Bank for International Settlements (BIS), 18.98 metric tonnes were held in the form of gold deposits,” reads the RBI’s Half Yearly Report on Management of Foreign Exchange Reserves published on May 5.
As of January 20, 2026, the Reserve Bank of India (RBI) has made headlines for a significant tactical shift: its gold purchases have plummeted to an eight-year low.
While this looks like a retreat at first glance, the "hidden logic" points to a sophisticated rebalancing of India's $687 billion forex reserves.
The Hidden Logic: Why the Slowdown?
1. "Portfolio Saturation" and Record Exposure
The primary reason for the pause is that the RBI’s gold strategy has already been "too successful."
Target Weightage: Gold now makes up 16.2% of India’s total foreign exchange reserves—the highest level in over two decades.
3 Price Appreciation: Because gold prices surged by over 65% in 2025 (hitting record highs above $4,600/oz), the value of the gold the RBI already owns skyrocketed to over $112 billion.
The Logic: Central banks typically have "target bands" for asset classes. With gold's share jumping from 8% to 16% in a short window, the RBI is likely pausing fresh buying to prevent its portfolio from becoming "top-heavy" with a single non-yielding asset.
2. Guarding the Rupee via "Liquid" Assets
Gold is a safe haven, but it is not as "liquid" for daily currency management as the US Dollar.
The Tariff Factor: Following new global trade tariffs in early 2026, the Indian Rupee has faced depreciation pressure.
4 The Logic: To support the Rupee, the RBI needs a "war chest" of liquid cash (US Dollars). By slowing down gold purchases, the RBI is prioritizing the accumulation and retention of foreign currency assets to intervene in the currency markets if the Rupee slides too far.
3. Avoiding "Peak Pricing"
The RBI is known for its disciplined "value-buying" approach.
The Logic: With gold prices up nearly 175% since 2022, the central bank is likely practicing "wait and watch." Analysts suggest the RBI is waiting for a price correction or a cooling of geopolitical risk premiums before committing more capital to the yellow metal.
RBI Gold Statistics (Jan 2026)
| Metric | Current Status | Change vs 2024 |
| Total Gold Reserves | 880.2 Tonnes | Record High |
| Annual Purchase (2025) | 4.02 Tonnes | -94% (8-year low) |
| Gold Value | ~$112.8 Billion | Surge due to price rally |
| Share in Forex | 16.2% | Highest in 20+ years |
Strategic Onshoring: The "Homecoming" Continues
Even as the buying slowed, the repatriation of gold did not. In 2025, the RBI continued moving its existing gold from the Bank of England back to Indian soil. Over 575 tonnes (roughly 65% of total holdings) are now stored domestically in vaults in Mumbai and Nagpur, reflecting a shift toward "financial sovereignty" and protection against potential Western sanctions.
Would you like me to look up the latest gold price forecasts for the remainder of 2026 to see if a better entry point for the RBI is expected?
No comments:
Post a Comment