India's foreign exchange reserves have recently crossed the $700 billion mark, in which the share of gold has also seen a significant increase. The share of gold has increased by 209 percent since 2018, which shows that the country's central bank has given importance to gold in its assets.

RBI figures

According to the data of the Reserve Bank of India (RBI), India's gold reserves are $65.76 billion as of October 4, 2023. At the same time, this figure was only $21.15 billion on December 7, 2018. During the tenure of RBI Governor Shaktikanta Das, the foreign exchange reserves have also increased by 78 percent. As against $393.735 billion in 2018, it has reached $701.176 billion in 2023.

Increase in gold holdings

According to RBI's "Half-Yearly Report on Foreign Exchange Reserve Management", the Reserve Bank's gold holdings have increased by 27.46 metric tonnes to 822.10 metric tonnes in FY24. This year, the RBI has also imported more than 100 tonnes of gold from Britain, further increasing the gold reserves.

Evaluation of gold share

The share of gold in foreign exchange was around 7.81 percent as of the end of March 2023, which has increased to 8.15 percent by the end of March 2024. Of the total gold reserves, 408.31 metric tonnes are kept domestically, while 387.26 metric tonnes are kept in the Bank of England and the Bank for International Settlements (BIS).

Market response

According to industry experts, the price of gold on MCX remained high with a gain of Rs 350 on Wednesday. At the same time, the price of Comex gold was trading 0.55 percent higher at above $ 2,675. Traders are hopeful that the Federal Reserve Bank will continue to cut interest rates, which has created a positive environment for gold.

Influence of geopolitical situation

The ongoing geopolitical situation in the Middle East has further increased the demand for gold. This has led to a surge in safe-haven demand for gold among investors and traders, which is also increasing its prices. Gold has been showing stability since reaching a record high in September, but traders remain concerned about a possible cut in interest rates by the Fed.