January 7th 2025.
The Reserve Bank of India has recently made headlines with its latest purchase of eight tonnes of gold in November 2024, as reported by the World Gold Council. This comes as no surprise as central banks from all over the world have been actively buying up gold, with a total of 53 tonnes acquired in the same month.
The decline in gold prices following the US election may have been a contributing factor for central banks, including the RBI, to add to their gold reserves. It is a common strategy for central banks to hold gold as a safe-haven asset, in order to hedge against inflation and minimize foreign currency risks, especially during uncertain times caused by political tensions.
The RBI's total gold holdings now stand at an impressive 876 tonnes, after adding a total of 73 tonnes in the first 11 months of 2024. This places the RBI as the second largest buyer of gold, just behind Poland. The report also reveals that the People's Bank of China has resumed its gold purchases after a six-month hiatus, acquiring five tonnes of gold and increasing their total reported gold holdings to 2,264 tonnes.
However, not all central banks have been adding to their gold reserves. The Monetary Authority of Singapore was the largest seller in November, reducing their reserves by five tonnes. This brings their year-to-date net sales to seven tonnes and their overall gold holdings to 223 tonnes.
The RBI's gold purchases have seen a significant increase compared to the same period in 2023, with a five-fold increase in the amount of gold bought, as reported by the WGC. This has resulted in the RBI's total gold reserves reaching 890 tonnes, with 510 tonnes held in India.
The WGC also reports that Poland and Uzbekistan were among the central banks that made significant gold purchases in November, with 21 tonnes and nine tonnes respectively. These large purchases by central banks have also contributed to the rising prices of gold in the global market.
It is worth noting that more than half of the RBI's gold reserves are held in secure custody with the Bank of England and the Bank of International Settlements, while a third is stored in the RBI's own vaults in Nagpur and Mumbai. In 2024, the RBI made a decision to transfer 100 metric tonnes of its gold from the UK to its own vaults in India, citing sufficient storage capacity in the country and a potential cost-saving measure.
Overall, the RBI's recent gold purchase highlights the continued trend of central banks around the world adding gold to their reserves. It also showcases the importance of gold as a safe-haven asset and the role it plays in hedging against economic uncertainties.
[This article has been trending online recently and has been generated with AI. Your feed is customized.]
[Generative AI is experimental.]