India brings home 102 tonnes of gold amid global tensions

The Reserve Bank of India (RBI) has recently repatriated 102 tonnes of gold from the Bank of England, strengthening domestic reserves as global uncertainty grows.

According to reports, the transfer, conducted discreetly with reinforced security, aligns with the RBI’s long-term plan to hold more of India’s gold reserves within the country.

As of September, India’s total gold reserves stand at 855 tonnes, with 510.5 tonnes now stored domestically.

This latest shipment follows a similar transfer of 100 tonnes in May, marking a significant shift in the RBI’s approach to managing gold assets.

Since September 2022, a total of 214 tonnes has been repatriated, reflecting a strategic focus on securing assets within national borders rather than using them as collateral, as was common in previous financial crises.

Despite 324 tonnes of India’s gold remaining overseas with the Bank of England and the Bank for International Settlements, known for secure storage and the liquidity benefits of London’s bullion market, India’s strategy has pivoted in response to recent geopolitical risks.

Global instability, including conflicts in the Middle East, has increased demand for gold as a stable asset, pushing India’s domestic gold reserves to 9.3% of its total foreign reserves, up from 8.1% in March.

In India, gold prices have surged, with rates in Mumbai reaching ₹78,745 ($936.50) per 10 grams.

Projections suggest prices may rise to ₹85,000 per 10 grams by 2025, as investors turn to gold for stability amid cooling stock markets.

During the Dhanteras and Diwali festivals, consumer demand for gold remained high despite record prices, driven by expectations of continued returns.

PNG Jewellers’ chairman Saurabh Gadgil noted strong sales of gold and silver, highlighting the metal’s appeal over equities.

This demand surge may impact India’s trade deficit, exerting additional pressure on the rupee.