India’s Gold Stash Hits New High as RBI Makes Second-Largest Purchase in 7 Years
RBI Buys 57.5 Tonnes of Gold in FY25 – Second-Highest in 7 Years
India’s central bank has made a bold move—buying a massive 57.5 tonnes of gold in the financial year 2024-25. This is the Reserve Bank of India’s (RBI) second-largest annual gold purchase since it resumed accumulating the precious metal in 2017.
With gold prices up more than 30% in just a year, and the US dollar showing erratic swings, the RBI’s decision reflects rising global uncertainty and a shift in central banking strategy around the world.
RBI’s Gold Buying Spree Explained
Second-Biggest Gold Buy Since 2017
The RBI’s 57.5-tonne gold purchase in FY25 falls just behind its record 66-tonne purchase in FY22. This marks a clear return to aggressive gold accumulation after buying just 35 tonnes in FY23 and 27 tonnes in FY24.
India’s Total Gold Reserves Are Now Nearly 880 Tonnes
As of March 2025, India’s total official gold stock stands at 879.6 tonnes, up from 822.1 tonnes a year ago. That’s a 7% jump in physical reserves in just 12 months.
Why Is RBI Buying So Much Gold?
1. Global Uncertainty and Geopolitical Risks
With the world still reeling from trade wars, inflation, and political volatility, central banks—including India’s—are turning to gold as a safe haven.
2. US Dollar Volatility
The dollar has seen wild swings since Donald Trump’s re-election in November 2024, leading many countries to reduce dependence on dollar-based assets like US Treasuries.
3. Falling Appeal of US Government Bonds
Gold is proving more attractive than low-yielding or risky US treasuries. Sajal Gupta of Nuvama puts it plainly:
“All global central banks are reducing reliance on US Treasuries and shoring up gold reserves.”
India Joins the Global Trend
According to the World Gold Council’s 2024 report, central banks around the world have ramped up gold buying, driven by inflation fears and a desire to diversify away from the dollar.
India’s central bank is firmly in this camp, consistently expanding its gold stockpile. But it’s not just buying—it’s also holding. Unlike some countries that sell during crises, the RBI rarely sells its gold. Selling is considered politically sensitive and strategically unwise.
Gold Now a Bigger Piece of India’s Forex Reserves
As of April 11, 2025, gold now accounts for 11.8% of India’s foreign exchange reserves, up from 8.7% last year. That’s a significant shift in portfolio composition, and it’s not just about quantity.
Rising Valuation Boosts RBI’s Reserves
Thanks to gold’s price surge (over 30% in one year), even the existing gold stock has gained massive value—further strengthening India’s reserve position without new purchases.
A Pause in RBI’s Gold Buying? Not Quite
Interestingly, despite the big FY25 number, the RBI appears to be moderating its monthly purchases. After averaging 6.6 tonnes per month from January to November 2024, it paused in December and February, and slowed down in January and March.
Experts say this doesn’t mean RBI is backing off gold. Instead, it’s likely a more calculated approach in response to fluctuating prices and reserve targets.
Expert View: Why Gold Still Rules
Gold continues to be a strategic asset, especially when inflation bites and global currencies weaken. For India, it also offers a hedge against domestic currency fluctuations.
The RBI itself put it best in its Half-Yearly Foreign Exchange Reserve Report:
“Safety and liquidity are our core objectives in reserve management, with return optimisation within this framework.”
In other words: gold is safe, liquid, and now lucrative.
What’s Next for Gold in India?
With central banks continuing their gold buying spree, the trend seems far from over. If dollar volatility and global risks continue, the RBI could be looking at more gold purchases in FY26.
And for regular investors? This trend is a strong signal that gold remains a long-term safety net in a financially unpredictable world.
Conclusion: RBI Bets Big on Gold for Safety and Strength
The RBI’s 57.5-tonne gold purchase this year sends a clear message—India is preparing for global shocks with the world’s oldest financial insurance: gold. As uncertainty rises, this glittering asset is reclaiming its throne in central bank vaults across the globe.
