India Now Holds 15% of the $23 Trillion Gold Market, Says New Report

While global foreign exchange reserves are around $12.5 trillion, the value of the gold market has touched an astronomical $23 trillion with India contributing 15% of that, as per DSP Mutual Fund's Netra report dated July 2025, which came out on Monday.

The report points out that 65% of all the gold that has been mined is in the form of jewellery. It implies that even a small change—only 5%—of world reserves into gold would ignite a sustained and significant rise in its price.

Over the past four years, central banks have ramped up their purchases of gold, acquiring more of the asset during this period than they did over the two decades prior. Between 2000 and 2016, central bank gold acquisitions totalled $85 billion. In stark contrast, the year 2024 alone saw them purchase $84 billion worth of gold.

Since 2022, central banks have been purchasing about 1,000 tonnes of gold every year—over 25% of the annual mined supply, as per the report.

This relentless amassing is part of a wider global pattern: the penchant for greater non-dollar holdings in light of increasing fears regarding the riskiness of US Treasury bonds. Gold has, as a result, increasingly been an attractive alternative for reserve management. "Demand for gold, therefore, is strong, for now," the report observes.

The Reserve Bank of India in India now has 880 metric tonnes of gold, according to the most recent available data. The RBI, however, has not added any gold to its coffers during FY26 till date, probably choosing to wait for a price correction in gold. Gold has risen by more than 80% in the past five years with increasing geopolitical tensions and trade uncertainties driving it.

Gold has also hit a new all-time inflation-adjusted high and remains in a bullish trend. With few constructive substitutes for the US dollar available, this bull run looks to have legs to it.

"Euro has consistently demonstrated frailties as a result of an unforgiving fiscal composition of the Economic and Monetary Union (EMU). The Chinese yuan is too far from being market-oriented or politically acceptable to be the reserve currency, and the majority of other rivals are currently too diminutive to induce reserve asset buying," says the Netra report.

Locally, the report also highlighted a significant trend in India's business world. Firms have been witnessing robust operating cash flows, which have resulted in improving operating cash flow (OCF) margins. This, it stated, augurs well for both capital deployment and corporate governance locally.