• RBI’s gold holdings rose to 879.58 tonnes as of March 2025, up nearly a third from mid-2020.
• Gold now makes up 12 percent of India’s net foreign assets, up from just 8.3 percent the previous year, driven by rising prices and strategic buying.
• The World Gold Council says global central banks bought over 1,000 tonnes of gold for three consecutive years.
• India has begun repatriating gold stored abroad, a move that mirrors global concerns about foreign-held reserves.
• As the dollar’s share in global reserves falls, India balances its gold accumulation with a steady, though plateauing, exposure to US Treasuries.
Central banks have been bingeing on gold, and the party is set to continue. That is the conclusion of the World Gold Council’s recent Central Bank Gold Reserves Survey 2025. An overwhelming 95 percent of the central banks surveyed said that global gold reserves will increase over the next 12 months, while 43 percent said their own gold reserves will also increase over the same period.
But here’s the kicker: Seventy-three percent of the respondents see moderate or significantly lower dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi, as well as gold, will increase over the same period.
The European Central Bank said, ‘Global holdings of gold by central banks now stand at 36,000 tonnes, close to the all-time high of 38,000 tonnes reached in 1965 during the Bretton Woods era. With the price of gold reaching new highs, the share of gold in global foreign reserves at market prices, at 20 percent, surpassed the share of the euro (16 percent).’
What is the attraction of the yellow metal for central banks? The ECB survey found that two-thirds of central banks invested in gold for diversification, while two-fifths did so to protect against geopolitical risk. We had pointed out that recent US policies, such as unilateral decisions on tariffs, high deficits and erratic decision-making have all resulted in a move away from dollar assets. We had said that central banks worldwide are voting with their feet, and they’re walking away from the dollar.