The Reserve Bank of India (RBI) has once again made big purchases in gold in the last week of June 2025. RBI bought about 4 quintals (0.2 tonnes) gold in just one week, causing the country’s total gold reserves to 879.8 tonnes by June 27. A week ago this figure was 879.6 tonnes. This purchase has taken place at a time when RBI was a little cautious about the purchase of gold at the beginning of this financial year. But as the signs of global economic uncertainty and inflation increased, the Reserve Bank has again turned to gold.
Why does RBI have the most trust in gold?
In the last few years, the thinking of the Reserve Bank of India has been clearly visible, gold is a more reliable property than dollars or other foreign currency. Due to this thinking, gold became the fastest growing part of India’s foreign exchange reserves in the first half of 2024-25. By 18 July 2025, the gold stake in India’s Forex Reserve has increased to 12.1%. Whereas exactly one year ago, i.e. on 19 July 2024, this stake was only 8.9%. That is, a direct increase of 3.2% in a year, which clearly shows how serious RBI is adopting a serious strategy about gold.
Why make gold the best option for investment?
When the RBI invests in gold, not only does its safety or liquidity be able to immediately look into cash, but also keeps an eye on the profit (returns) on it. According to data from the World Gold Council (WGC), in the last three years, central banks around the world have bought more than 1000 tonnes of gold every year.
In the first 6 months of 2025, gold has given a tremendous return of 26%, which has become the best performing asset for India so far. The same return in Türkiye has been more than 40%. This gold profit is not only better than strong foreign currency like pounds, yen and euros, but has also left behind powerful currency like Rainminby of China.
Why is RBI investing so much in gold?
When the RBI planning for foreign exchange reserves, it has three major motives – security, liquidity and profit (return). And all three things are found in gold. When the tension increases in the world or there is a fluctuations in the price of the dollar, then gold becomes a reliable and stable option.
When the stock market falls or the currency weakens, then gold prices often rise. This is the reason that RBI is constantly buying gold, but is not selling. In fact, since March 2025, RBI has not sold a single kilo of gold, which is a clear indication that it is looking at this investment as a long -term strategy.
Will this trend continue even further?
Financial experts believe that as long as economic uncertainty and geopolitical tension will remain globally, the central bank will give priority to the purchase of gold. Even in India, RBI will continue to invest in gold to maintain its foreign currency diversity and reduce dependence on dollars. Apart from this, gold has now become a mandatory component to keep the exchange rate of the rupee stable and to improve the quality of foreign exchange reserves.
Gold is made of real safe haven
The RBI’s constant gold purchases are indicated that India is now focusing on its quality and durability, not just the amount of forex reserve. Gold is an investment that not only provides protection from inflation, but also the backbone of the reserve in difficult times. The direct advantage of this changing strategy is expected to be seen in the economic stability of the country and the strength of the currency.