Is 15% of the $23 Trillion Global Gold Market Held in India?
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Synopsis
A recent report reveals that India holds a significant share of the global gold market, valued at $23 trillion. With central banks increasing their gold reserves, this trend reflects a growing preference for gold as a safe-haven asset. What does this mean for the future of gold in India and globally?
Key Takeaways
- 15 percent of the global gold market is in India.
- Central banks have increased gold purchases significantly.
- Gold is seen as a safe-haven asset amid economic uncertainties.
- India's Reserve Bank holds 880 metric tonnes of gold.
- Alternatives to the US dollar are becoming scarce.
New Delhi, July 7 (NationPress) According to a report released on Monday, while the global forex reserves stand at approximately $12.5 trillion, the value of the gold market is currently at $23 trillion, with 15 percent of this total held in India.
Out of all the gold that has ever been mined, 65 percent is in the form of jewelry. A mere 5 percent shift of global reserves into gold could potentially spark a significant and sustained increase in its price, as highlighted in the DSP Mutual Fund's July 2025 Netra report.
Central bank gold reserves are on the rise, with more safe-haven assets purchased over the last four years than in the previous 21 years combined.
From 2000 to 2016, central banks accumulated gold worth $85 billion, but in the single year of 2024, they purchased gold valued at $84 billion.
Since 2022, central banks have acquired nearly 1,000 tonnes of gold each year, which represents over a quarter of the annual gold mining supply, according to the report.
This surge in gold purchases indicates a strong preference among countries for non-dollar reserve assets. The fluctuating nature of US Treasury Bonds has made gold an even more appealing option for central banks. Consequently, demand for gold remains robust, as noted in the report.
In India, the Reserve Bank of India's gold holdings currently amount to 880 metric tonnes, as per the latest data. It has refrained from increasing its gold reserves in FY26 so far, possibly waiting for a dip in the prices of safe-haven assets, which have risen by over 80 percent in five years amid geopolitical and trade tensions.
Gold has reached a new all-time high when adjusted for inflation and is firmly within a bull market. This trend is attributed to the scarcity of alternatives to the US dollar.
The report points out that the Euro has repeatedly displayed weaknesses due to the challenging fiscal structure of the Economic and Monetary Union (EMU). Meanwhile, the Chinese yuan lacks the market-driven characteristics or political acceptability to become a reserve currency, and most other contenders are simply too small to attract reserve asset investments.
Additionally, the report states that strong operating cash flows have led to increased operating cash flow (OCF) margins in India, which is a positive sign for both capital allocation and corporate governance.
Point of View
It is essential to recognize the implications of India's significant holdings in the global gold market. The country's strategic positioning in this sector reflects not only its economic stability but also its ability to navigate through global uncertainties. The growing trend of central banks prioritizing gold underscores a shift towards safer investment avenues, aligning with national interests.
NationPress
22/07/2025
Frequently Asked Questions
What percentage of the global gold market is held in India?
India holds 15 percent of the global gold market, which is valued at $23 trillion.
How much gold have central banks purchased recently?
In 2024 alone, central banks bought gold worth $84 billion, indicating a strong demand for this precious metal.
What is the significance of gold holdings for India's economy?
India's substantial gold holdings contribute to its economic stability and enhance its position in the global financial landscape.
