RBI Buys Half Tonne of Gold in June 2025 as Forex Reserve Component Rises

The Reserve Bank of India has added 500 kg of gold to its reserves during the last week of June 2025, marking a significant move amid rising global central bank interest in bullion. This lift sees India's total central bank gold stock reach 879.8 tonnes, aligning with a broader trend of increasing gold allocation in foreign exchange portfolios.

RBI Adds 500 kg to Gold Reserves in June 2025

In a notable move, the Reserve Bank of India purchased 500 kg of gold during the final week of June 2025. This buy raised the country's gold holdings from 879.6 tonnes the previous week to 879.8 tonnes as of June 27. This purchase marks the RBI's first acquisition since the last week of March, signalling renewed interest amid gold’s strong performance globally.

Gold Now 12.1% of India’s Foreign Exchange Reserves

Gold has rapidly grown as a preferred asset in India's forex basket. Over the past 5 years, the value of gold rose by over 80%, significantly boosting its share in reserves. As of July 18, 2025, gold accounted for 12.1% of total forex reserves, up from 8.9% a year earlier. This shift highlights central banks' increasing preference for gold as a stable and inflation-hedging instrument.

Strong Performance Puts Gold in Focus

Gold has delivered a 26% return for Indian investors in the first 6 months of 2025, making it one of the highest-yielding assets. This robust return outperforms currencies like the euro, pound, yen, and even the Chinese renminbi, despite China being a leading consumer. Turkey is the only major market that recorded a higher gold return, exceeding 40%.

Read More: Best Gold Mutual Funds in India for August 2025: DSP World Gold, LIC MF Gold and More Based on 3Y CAGR!

Global Trends Reinforce Central Banks' Interest

The World Gold Council reports that central bank gold purchases exceeded 1,000 tonnes annually for the past 3 years. This consistent activity supports a global movement towards diversification and risk management within national reserves. India’s cautious yet steady buying reflects this broader strategy.

Conclusion

The RBI’s half-tonne gold addition in June 2025 reaffirms gold's growing position in India’s forex strategy. With returns outpacing traditional currencies and global central banks ramping up purchases, gold is becoming a crucial buffer against macroeconomic uncertainties and inflationary pressures.

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