October 24, 2025

The Reserve Bank of India (RBI) is rolling the dice heavily on gold instead of US government bonds lately. Since the start of this fiscal year, the RBI has been adding gold to its treasure chest while slowly slimming down its holdings in US Treasury securities. How big is this change? RBI’s gold pile jumped by 600 kilograms to cross an eye-popping 880 tonnes. Meanwhile, its US Treasury investments slipped to a seven-month low of $219 billion. As of the week ending October 10, India’s total foreign exchange reserves stood at a whopping $698 billion. RBI’s weekly gold buys were notable: 200 kg in late September and 400 kg in late June. But on the flip side, its US Treasury bond stash has been shrinking steadily since July, according to data from the US Treasury Department. Experts call this a smart and spicy move. Madan Sabnavis, chief economist at Bank of Baroda, said, "There appears to be a policy of diversifying forex reserves. Gold is a good choice given also an upside in value, although that may not be a consideration for the central bank." He added, "From a market perspective there is uncertainty in the state of the US economy and implications of tariffs. Interest rate policy also is uncertain given inflation potential. This supports the action of buying gold." Look at the numbers closely: RBI’s US Treasury holdings dropped to $219.7 billion from $227.4 billion just a month ago, and $238.8 billion a year ago. Meanwhile, gold’s golden glow isn’t just in weight but also in wealth. For the first time ever, RBI’s gold stock is valued at over $100 billion — to be exact, $102.365 billion as of October 10. Gold now makes up 13.6% of total forex reserves, a jump from just 9.3% a year ago when India’s reserves were at their peak. This trend is not just Indian—it’s global! Central banks around the world are buying gold to stay safe from economic shocks. According to the World Gold Council, global central banks added 15 tonnes of gold in August alone. For perspective, worldwide central banks hold $9.1 trillion in US Treasury bills, with Japan, the UK, and China as the biggest players. But India’s golden pivot shows a clear call for diversification and safety — betting on the timeless shimmer of gold instead of paper promises amid uncertain times. Shining bright, indeed!

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Tags: Rbi, Gold reserves, Us treasury securities, Forex reserves, India economy, Central bank investments,