The Reserve Bank of India (RBI) purchased yet another eight tonnes of gold in November 2024 as Central banks worldwide continued their buying spree with a collective purchase of 53 tonnes of the precious metal during the month, according to the latest World Gold Council (WGC) report.
The decline in gold prices during November, following the US election, may have provided the added impetus to some central banks to amass the precious metal, the report pointed out.
The RBI, like other central banks, has been purchasing gold as a safe haven. The strategy of holding gold is mainly hedging against inflation and foreign currency risks in times of uncertainty, especially with geopolitical tensions.
With the addition of eight tonnes of gold to its reserves in November, the RBI has increased its buying to 73 tonnes in the first 11 months of 2024 and its total gold holdings to 876 tonnes. The RBI kept its position of being the second-largest buyer during the year after Poland.
The People's Bank of China, in the second purchase since it resumed buying gold after a gap of six months, added five tonnes to its reserves, increasing year-to-date net purchases to 34 tonnes and total reported gold holdings to 2,264 tonnes or 5 per cent of total reserves, the report said.
Meanwhile, the Monetary Authority of Singapore was the month's largest seller, reducing its gold reserves by 5 tonnes, bringing the year-to-date net sales to 7 tonnes and overall gold holdings to 223 tonnes, it added.
The RBI’s gold purchases have shot up by five-fold over the quantity of the precious metal bought in the same period of 2023, according to WGC figures.
According to the data, the total gold reserves of RBI have now reached 890 tonnes, out of which 510 tonnes are kept in India.
According to WGC, the central banks that bought gold during the month are those of Poland adding 21 tonnes and Uzbekistan buying nine tonnes.
These large purchases of gold by central banks have also been driving up prices of the precious metal in the global market.
More than half of the RBI’s gold reserves are held overseas in secure custody with the Bank of England and the Bank of International Settlements, while approximately a third is stored in the RBI’s vaults in Nagpur and Mumbai.
The Reserve Bank shifted 100 metric tonnes of its gold kept in bank vaults in the United Kingdom (TADAWUL:4280) to its own vaults in India in 2024 since the country had sufficient domestic storage capacity.
The shifting of the gold reserves will result in a saving in the high fees that were paid for the use of vaults in the UK.
Read also| Morgan Stanley Forecasts 18% Rise in Sensex by End of 2025
Read also| White-Collar Hiring in India Rises 9% in December, AI and ML Roles in High Demand
