RBI purchased another 8 tonnes of gold in Nov as safe-haven asset
The Reserve Bank of India (RBI) bought another eight tonnes of gold in November 2024 as central banks around the world 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 some central banks with added motivation to accumulate the precious metal, the report pointed out.
Like other central banks, RBI has been buying gold as a safe-haven asset, mainly to hedge against inflation and reduce foreign currency risks, especially in times of uncertainty triggered by geopolitical tensions.
With the addition of eight tonnes of gold to its reserves in November, the RBI has increased its purchases to 73 tonnes in the first 11 months of 2024, bringing its total gold holdings to 876 tonnes. It remains the second-largest buyer of gold in 2024, after Poland.
The People’s Bank of China (PBoC) resumed gold purchases after a six-month gap, adding five tonnes to its reserves, bringing its year-to-date net purchases to 34 tonnes and total gold holdings to 2,264 tonnes (5 percent of its total reserves), the report said.
Meanwhile, the Monetary Authority of Singapore was the largest seller of gold during the month, reducing its gold reserves by 5 tonnes, bringing its year-to-date net sales to 7 tonnes and total gold holdings to 223 tonnes.
The RBI’s gold purchases have surged five-fold compared to the same period in 2023, according to WGC figures.
According to the data, the RBI’s total gold reserves have now increased to 890 tonnes, with 510 tonnes held in India.
The WGC report also highlighted that central banks that bought gold in November included Poland (21 tonnes) and Uzbekistan (9 tonnes).
These large purchases of gold by central banks have been driving up prices 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.
In 2024, the Reserve Bank shifted 100 metric tonnes of gold held in the UK to its own vaults in India, as there was enough domestic storage capacity. This move is expected to result in savings by reducing the high fees previously paid for using vaults in the UK.
