India Repatriates Gold Reserves, Prioritizing Security Amidst Global Uncertainty
This Dhanteras, the Reserve Bank of India (RBI) confirmed a significant move, relocating 102 tonnes of gold from the Bank of England's vaults to secure facilities within India. This brings the total amount of gold reserves held on Indian soil to 510.5 tonnes, out of a total of 855 tonnes.
The decision to repatriate gold reserves reflects a shift in strategy, driven by rising geopolitical risks. The RBI and the Indian government prioritize the security of their gold reserves, opting to bring them closer to home amidst uncertain global conditions. This move echoes the repatriation of 214 tonnes of gold since September 2022, demonstrating a clear preference for domestic custody.
The logistics of this transfer were executed with utmost secrecy, utilizing dedicated aircraft and enhanced security measures. This underlines the government's concerns over safeguarding sensitive information related to the nation's gold reserves.
Earlier this year, India had already moved 100 tonnes of gold from the UK, marking the most significant gold repatriation since the 1990s. Back then, the government had pledged gold to foreign banks as collateral during a balance of payments crisis. Today, however, the proactive repatriation of gold signifies a shift towards securing wealth rather than leveraging it in emergencies.
Currently, 324 tonnes of India's gold reserves remain under the custodianship of the Bank of England and the Bank for International Settlements, both located in the UK. The Bank of England has a long history of storing precious metals for global central banks, dating back to 1697. However, further gold shipments out of England are unlikely this year.
The increasing importance of gold in India's foreign reserves is evident, with its share rising from 8.1% in March to 9.3% currently. This coincides with a rally in gold prices, currently at ₹78,745 per 10 grams in Mumbai. Forecasts anticipate prices to reach ₹85,000 per 10 grams in the next year, as investors turn to gold amidst economic uncertainty and global conflicts.