RBI bought 8 tonnes of gold as a safe-asset in November 2024
New Delhi| According to the information given in the latest report of the World Gold Council, the Reserve Bank of India (RBI) has purchased another eight tones of gold in November 2024. Central banks around the world have continued collective purchases of 53 tonnes of precious metal during the month of November.
According to the report, the fall in gold prices during November after the US election encouraged some central banks to deposit precious metals. Like other central banks, RBI is buying gold as a safe asset.
The gold holding strategy is primarily aimed at hedging against inflation and reducing foreign exchange risks in times of uncertainty arising from geopolitical tensions. With the addition of eight tones of gold to its reserves in November the RBI has increased its purchases to 73 tones in the first 11 months of 2024 and its total gold reserves to 876 tones. With this, RBI has maintained its position of being the second largest buyer during the year after Poland.
The report said the People’s Bank of China has resumed gold purchases after a gap of six months by adding five tones of gold to its reserves and increased net purchases to 34 tones on an annual basis. With this, the People’s Bank of China has reduced its total gold reserves to 2,264 tons (5 per cent of total reserves). Meanwhile, the Monetary Authority of Singapore (MAS) was the largest seller of the month, reducing its gold reserves by 5 tones, bringing net sales on an annual basis to 7 tones and total gold holdings to 223 tones.
According to World Gold Council data, RBI’s gold purchases have increased five times the amount of precious metal purchased in the same period of 2023. According to the data, RBI’s total gold reserves now stand at 890 tones, of which 510 tones are in India.
According to the World Gold Council, central banks buying gold during the month include 21 tons from Poland and nine tons from Uzbekistan. These big purchases of gold by central banks have also led to a rise in the prices of precious metals in the global market.
More than half of RBI’s gold reserves are kept in safe custody with the Bank of England and Bank of International Settlements abroad, while about a third are stored in RBI vaults in Nagpur and Mumbai. The Reserve Bank shifted its 100 metric tones of gold held in bank vaults in the United Kingdom to its vaults in India in 2024 as the country had sufficient domestic storage capacity. Shifting the gold reserves is expected to save on higher fees paid for the use of vaults in the UK.
