The RBI added 4.7 tonnes of gold in February, taking its gold reserves to an all-time high of 817 tonnes.
The RBI had added nearly 9 tonnes in January, which was the first monthly increase in its gold reserves since October 2023 and the largest since July 2022. The gold holdings of the RBI had gone up to 812 tonnes. With the addition in the second straight month in February, RBI seems to be aiming at the highest yearly increase in 2024 after 2009.
After buying 200 tonnes in November 2009, the reserves were stagnant at 557.7 tonnes for a long time. India had again started buying gold in trickles from the open market since Q3 2017.
The Reserve Bank of India bought 77 tonnes of gold in 2021 and this was the highest yearly addition since 2009.
RBI has been buying gold even during the pandemic. Its gold reserves stood at 676.6 tonnes at the end of 2020 and in the next two years, RBI bought 118 tonnes.
According to the World Gold Council, Indian gold ETFs saw inflows of $93.3 million in February, the strongest monthly inflow for six months. The elevated gold prices also supported this inflow. Gold imports in value terms in February saw a substantial increase of 134 per cent to $6.15 billion from $2.63 billion in the year-ago month. Gold import value rose 222 per cent on a sequential basis.
WGC finds that during the general election period (April to June), there will be heightened scrutiny on the movement of gold and cash. Gold jewellery demand will likely remain subdued, even if prices moderate over the coming months. Meanwhile, higher prices could encourage investment into gold-linked financial products.
