6 April 2024 – In a notable move, India’s Reserve Bank, the RBI, has intensified its accumulation of gold reserves, recording a significant increase of 6 tonnes in February alone. This proactive approach comes amidst a broader slowdown in gold reserve accumulation among global central banks.
India’s persistent efforts to bolster its gold reserves serve as a strategic maneuver aimed at diversifying its foreign exchange holdings and mitigating risks associated with currency fluctuations and economic uncertainties. This recent surge brings the total year-to-date gold acquisitions by the RBI to over 13 tonnes, pushing the total reserves to 817 tonnes.
While India remains a key player in the global gold market, the trend of central bank accumulation witnessed a slowdown in February. However, emerging market banks, notably those of India and China, continued to contribute to the overall accumulation, albeit at a reduced pace compared to previous months.
According to the World Gold Council, global central banks collectively increased their gold reserves by a net of 19 tonnes in February. Although this marks the ninth consecutive month of growth, there was a notable 58% decrease in net purchases compared to January. Despite the deceleration, the broader trend underscores continued interest among central banks in diversifying their reserve assets.
Analysts remain optimistic about the outlook for central bank demand for gold, anticipating comprehensive insights into first-quarter demand with the release of the next Gold Demand Trends report in late April. Despite the slowdown observed in February, central banks, including India’s RBI, maintain their commitment to strengthening gold reserves as a strategic safeguard against global economic uncertainties.
