RBI Gold Purchases Hit Fresh Peak in First Half 2021

SEATTLE (Scrap Monster): The gold purchases by the Reserve Bank of India (RBI) hit highest level during the initial six-month period of the ongoing calendar year.

The country’s central bank purchases totalled a record 29 tonnes during this period, thereby lifting the bank’s total gold reserves to 705.6 tonnes as on June 30, 2021. This is the first time that the gold reserves have surpassed 700 tonnes. The central bank gold holdings have surged higher by almost 27% over the past two years. At the beginning of 2018, the gold holdings had totalled only 558.1 tonnes. It must be noted that the RBI had resumed purchases in 2018, after a long gap of almost 9 years.

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The report published by the RBI says that despite surge in cumulative gold holdings, the gold’s share in total forex reserves have witnessed a dip to 6.5% during the June quarter. The data released by the World Gold Council (WGC) states that the cumulative gold purchases by all central banks across the world amounted to 32 tonnes. Out of this, RBI’s share stood at 9.40 tonnes.

The global central banks are likely to continue with gold purchases on a net basis in 2021, at a similar or higher rate than the previous year, mainly on account of heightened focus on portfolio diversification and risk management.