RBI repatriates more gold to Indian vaults as global uncertainties rise

The Reserve Bank of India (RBI) has significantly increased the share of its gold reserves stored within the country, moving a substantial portion back from overseas vaults amid growing global geopolitical tensions.

According to official data, the central bank brought around 64 tonnes of gold to India during the first six months of the current financial year. As of the end of September, India’s total gold holdings stood at 880.8 tonnes, of which 575.8 tonnes are now kept in domestic vaults.

The remaining 290.3 tonnes continue to be held with the Bank of England and the Bank for International Settlements (BIS), while around 14 tonnes form part of gold deposit arrangements.

Since March 2023, the RBI has repatriated a total of 274 tonnes of gold from foreign locations. The large-scale shift began following global developments such as the Russia-Ukraine conflict and the Taliban’s takeover of Afghanistan, when G7 nations froze both countries’ foreign reserves.

Analysts say the RBI’s decision to house a greater portion of its gold domestically reflects caution over the safety of overseas reserves, as financial sanctions and asset freezes increasingly become tools of geopolitical pressure.

Meanwhile, gold prices in India edged higher on Wednesday, mirroring international market trends ahead of the US Federal Reserve’s policy decision. On the Multi Commodity Exchange (MCX), gold opened nearly flat at Rs 1,19,647 per 10 grams against the previous close of Rs 1,19,646, before rising Rs 401, or 0.34 per cent, to Rs 1,20,047 per 10 grams in early trade.

Silver prices also gained, opening at Rs 1,44,761 per kg and climbing Rs 989, or 0.69 per cent, to Rs 1,45,331 per kg.

In global markets, spot gold rose 0.2 per cent to $3,957.42 per ounce after touching its lowest level since 7 October in the previous session. Gains, however, remained limited amid easing US-China trade tensions and anticipation of an interest rate cut by the Federal Reserve.

Gold prices have surged nearly 52 per cent so far this year, reaching an all-time high of $4,381.21 per ounce on 20 October, fuelled by economic uncertainty, expectations of monetary easing, and sustained central bank buying, including from the RBI.