NEW DELHI : The Reserve Bank of India (RBI) stood out with its continued accumulation of gold reserves. Weekly data from the RBI revealed a 6-tonne increase in gold holdings in February alone.
This brings the total year-to-date buying by the RBI to over 13 tonnes, with total gold reserves now reaching 817 tonnes.
India’s consistent efforts to bolster its gold reserves reflect a strategy aimed at diversifying its foreign exchange reserves and mitigating risks associated with currency fluctuations and economic uncertainties.
While India remains a significant player in the global gold market, other central banks also contributed to the accumulation in February.
Central banks around the globe continued their steady accumulation of gold reserves, albeit at a slower pace compared to the previous month, in February.
This trend has been predominantly driven by emerging market banks, particularly those of India and China, as reported by the World Gold Council.
According to a report Published in the World Gold Council by Senior Analyst, EMEA World Gold Council, Krishna Gopal, global central banks increased their gold reserves by a net of 19 tonnes in February.
While this marks the ninth consecutive month of growth, it represents a significant slowdown from January, with a 58 per cent decrease in net purchases.
Despite the deceleration, the broader trend of central bank buying remains intact. Year-to-date data for January and February shows an addition of 64 tonnes, indicating a fourfold increase compared to the same period in 2022, although it’s notably 43 per cent lower than the corresponding period in 2023.
The People’s Bank of China (PBoC) emerged as the largest buyer during the month, increasing its gold reserves by 12 tonnes. However, amid the overall trend of accumulation, there were notable instances of selling as well.
Despite the slower pace of accumulation witnessed in February, analysts remain optimistic about the outlook for central bank demand for gold.
The broader trend indicates a continued interest among central banks in diversifying their reserve assets, particularly amidst geopolitical uncertainties and economic volatility.
Looking ahead, market observers anticipate the release of the next Gold Demand Trends report in late April, which will provide comprehensive insights into central bank demand for the entire first quarter of the year.
Overall, while the pace may have moderated in February, the underlying trend suggests that central banks, including India’s RBI, remain committed to bolstering their gold reserves as a strategic hedge against global economic uncertainties. (ANI)
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