RBI’s 102-tonne gold haul this Dhanteras: What’s behind the move?

The RBI recently relocated 102 tonnes of gold from the Bank of England’s vaults to secure facilities within India. This transfer highlights the central bank’s belief in keeping valuable assets closer to home.
Since September 2022, India has repatriated 214 tonnes of gold, demonstrating the RBI’s preference for keeping more of its wealth within its own borders.
With a total of 855 tonnes in reserves, the RBI now holds 510.5 tonnes within the country. This shift aligns with rising geopolitical risks and the government’s goal of enhancing security by managing its assets domestically.
The decision to bring home a portion of India’s gold reserves comes amidst a backdrop of growing international tensions and economic challenges. According to government sources, holding these reserves within the country provides an extra layer of security.
The transportation of this gold required strict secrecy and advanced security measures, involving specialised aircraft and secure protocols. This approach signals the government’s commitment to safeguarding sensitive information and assets, especially as the international situation becomes more complex.
This is not the first time India has moved large quantities of gold back to its own soil. In May this year, India transferred 100 tonnes from the Bank of England to domestic vaults, marking one of the largest gold relocations since the 1990s. Back then, India’s government had to pledge gold as collateral during a financial crisis. However, this time, the move is part of a proactive strategy to secure the country’s wealth rather than a response to an economic emergency.
Currently, 324 tonnes of India’s gold reserves remain in the custodianship of the Bank of England and the Bank for International Settlements, both based in the UK. The Bank of England has long been a trusted custodian for central banks globally, offering a secure “bullion warehouse” since 1697. London’s bullion market also provides liquidity advantages. However, sources suggest that India is unlikely to move more gold out of the UK this year.
Gold now accounts for 9.3% of India’s total foreign reserves, up from 8.1% in March. This shift has been supported by a rally in global gold prices, with the current price at around Rs 78,745 per 10 grams in Mumbai. Analysts predict that prices may rise to Rs 85,000 per 10 grams over the next year, driven by increasing investor interest in gold during periods of economic uncertainty and conflict, particularly in regions like the Middle East.