NEW DELHI — As India’s foreign exchange reserves surpassed $700 billion, the share of gold in the country's forex has also surged more than 209 per cent since 2018.
India’s gold reserves stands at $65.76 billion (as on October 4), compared to $21.15 billion as on December 7, 2018, according to the Reserve Bank of India (RBI) data. Shaktikanta Das assumed the RBI office in December 2018.
Under his tenure, forex also went up 78 per cent. The total foreign exchange reserves of India stood at $701.176 billion (as on October 4) compared to $393.735 billion on December 7, 2018.
The central bank’s gold holding increased by 27.46 metric tonnes to 822.10 metric tonnes in FY24, according to its “Half Yearly Report on Management of Foreign Exchange Reserves”.
The RBI also brought home more than 100 tonnes of gold from the UK this year.
In value terms (USD), the share of gold in the total foreign exchange reserves increased to about 8.15 per cent as at end-March 2024 from about 7.81 per cent as at end-March 2023.
Of the total gold holdings, 408.31 metric tonnes were held domestically while 387.26 metric tonnes were kept in safe custody with the Bank of England and the Bank for International Settlements (BIS).
According to industry experts, gold prices stayed elevated on Wednesday with gains of Rs 350 in MCX, while Comex gold traded above $2,675, up 0.55 per cent.
Traders continue to position themselves on expectations that the Federal Reserve will maintain its path of interest rate cuts. This has sustained bullish sentiment around the yellow metal, which reached record highs in September.
Since then, gold has been consolidating in the low-to-mid $2,600 per ounce range, as traders anticipate a slower pace of rate cuts from the Fed.
The geopolitical situation in the Middle East has further bolstered safe-haven demand for gold, adding to its upward momentum. D
As long as the Federal Reserve's dovish tone and geopolitical risks remain, gold is likely to continue trading with a positive bias, said Jateen Trivedi from LKP Securities.