RBI's gold reserves increase by $16.23 billion so far in 2025 amid rising uncertainty

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

“Concerns over the inflation outlook and potential trade conflicts, particularly amongst EMDE (Emerging Market and Developing Economies) banks, show that diversification and risk mitigation continue to be key drivers of strategic reserve management decisions,” the World Gold Council said in a report.

Flight to gold

Since the beginning of the year, global uncertainties have increased, starting with tariff imposition by the US, the India-Pakistan tensions, and the Israel-Iran with the US entering it. All these events have put pressure on the dollar index, Brent crude oil prices and the Indian rupee. These crises have also led to an increase in risk aversion among investors and central banks globally, which are moving to safer assets such as gold or gold reserves.

The total gold held by the RBI was 879.58 metric tonnes as of March 31, 2025, compared to 822.10 metric tonnes as of March 31, 2024, reflecting an increase of 57.48 metric tonnes over the year, according to the RBI’s annual report.

Looking ahead, the World Gold Council Survey 2025 indicates that central banks’ demand for gold remains healthy due to increased volatility and unpredictability.

“As the world becomes increasingly volatile and unpredictable, gold’s safety, liquidity and return characteristics – the three key investment objectives for central banks – have risen in importance,” the World Gold Council said.