MUMBAI: On the back of a record rally in the prices of the yellow metal, the country’s gold reserves have increased by $31 billion during the current fiscal so far, reaching $108 billion as of the week to October 17, according to the latest Reserve Bank data. The reserves stood at $77 billion at the end of March this year. The reserves crossed 880 tonne as of end September, which is close to 14 percent of the total forex reserves of the nation which stood at $702.4 billion as of October 17.
This is despite the central bank not buying the safe haven metal much this year—having bought only 0.6 tonne till the end of September, according to the October RBI bulletin. This included 0.2 tonne (200 kg) bought in September and another 0.4 tonne in June. With these additions, the RBI’s total gold holdings rose to 880.18 tonne by the end of September, up from 854.73 metric tonne a year ago and 879.58 tonne at the close of FY25 when the RBI had added 54.13 tonne of gold to the reserves.
During the reporting week the prices of the metal had sniffed at $4,400 ($4,381.52 on October 23) for an ounce in the global markets, but since then it crashed below the $4,000 mark. The metal, at the peak, has rallied more than 70 percent on-year this year, which comes on the heels of a 27 percent rally in 2024 and another 22 percent in the year before. Gold prices have remained high through 2025 as investors sought safe-haven assets amid geopolitical tensions and expectations of lower global interest rates.
Central banks across emerging markets, including India, have been diversifying their foreign exchange reserves by increasing gold holdings. Economists said the value increase reflects a combination of actual buying by the central bank and the surge in gold prices amid global uncertainty. They say the shift appears strategic, as the country is strengthening its external balance sheet by holding more non-currency assets that hedge against currency volatility and external shocks.
By raising the share of gold in its reserves, the RBI is reducing dependence on dollar assets while building a stronger hedge against currency and interest-rate risks. The move also reflects a broader strategy to strengthen the external buffers amid global uncertainty and rising safe-haven demand. Meanwhile, the RBI has been consistently shifting the gold kept in the overseas to the domestic shores. While 290.37 tonne of gold were kept in safe custody with the Bank of England and the Bank for International Settlements, 13.99 tonne were held in the form of gold deposits, the RBI said in its latest report.
The gold reserves rose from 854.73 tonne at the end of September 2024 to 880.18 metric tonne at the end of September this fiscal -- an increase of 25.45 tonne. Of the total reserves of 880.18 metric tonne, as much as 575.82 tonne are held domestically or 65% of the total. This was only about 38 percent in September 2022,” the RBI said in its half yearly report on management of foreign exchange reserves for H1FY26 released on Tuesday.
So far this fiscal, the Reserve Bank has brought back nearly 64 tonne of gold. Over the past four years, the central bank has repatriated nearly 280 tonne of gold. In dollar value terms, the share of gold in the total foreign exchange reserves increased from 11.70 percent as of end-March 2025 to about 13.92% as of end-September 2025, it said. However, forex reserves marginally declined to $700.09 billion as of end-September 2025 compared to $704.78 billion as of end-September 2024.
During the half-year period under review, reserves increased from $668.33 billion as of end March 2025 to $700.09 billion as of end-September 2025, it said. Although both dollar and the euro are intervention currencies and the foreign currency assets are maintained in major currencies, the foreign exchange reserves are denominated and expressed in dollar terms, it said. The foreign currency assets comprise multi-currency assets that are held in multi-asset portfolios as per the existing norms, which conform to the best international practices followed in this regard.
As of end-September 2025, of the total foreign currency assets of $579.18 billion, $489.54 billion were invested in securities, $46.11 billion was deposited with other central banks and the BIS and the balance $43.53 billion comprise deposits with commercial banks overseas, it said.
With the objective of exploring new strategies and products in reserve management while diversifying the portfolio, a small portion of the reserves is being managed by external asset managers. The investments made by the external asset managers are governed by the permissible activities as per the RBI Act, 1934,” it said.
