Page 44 - Banking Finance February 2026

ARTICLE

rewarding investment, by delivering remarkable returns, re- going and expected geopolitical turmoil. The RBI purchased
inforcing its reputation of the most valuable asset class. The around 57.49 tonnes of gold in the last fiscal year (FY 25). A
following graph shows this long-term appreciation in value similar trend has been observed among most central banks.
of gold, which reflects the enduring trust individuals place Historically, gold has often moved in the opposite direction
in gold as their most preferred asset class. of the US dollar; therefore, central banks hold gold to hedge
against any unfavorable movement of the US dollar.
Drawing from the above graph, the fol-
Most central banks regard gold volatility as a systemic fac-
lowing table shows decade wise growth:
tor to hedge, and therefore the central banks of countries
Decade Start Price End Price Growth like Poland, China, Turkey, India, and Kazakhstan have ac-
(Rs.) (Rs.) (%) celerated their gold accumulation in recent months. How-
1970-1979 184 937 409.24 ever, due to rising gold prices, cumulative gold purchases
around the world have somewhat slowed down, especially
1980-1989 1,330 3,140 136.09
in the April-June 2025 period, however it has again picked
1990-1999 3,200 4,234 32.31 up from July onwards. As per the data of the World Gold
2000-2009 4,400 14,500 229.55 Council, reported on September 3, 2025, the total official
2010-2019 18,500 35,220 90.38 gold held by central banks around the world stands around
27054.15 tonnes.
2020-2025 48,651 1,19,597 145.80
According to the World Gold Council, in the past decade
Gold has consistently appreciated in value across decades,
with witnessing steepest rise in the 1970s and 2000s. The (2015-2024), the global annual average demand for gold
current decade (starting from 2020) is also showing a ro- has been around 4,338 tonnes against the average annual
bust growth of 145.80%, reaffirming the role of gold as a supply of 4,771 tonnes, which was largely driven by 75% of
mined gold and 25% of recycled gold. As far as the demand
reliable long-term investment.
is concerned, gold consumption in the form of jewelry re-
mains the single largest segment, accounting for almost
Global Gold Reserve and Consumption 49% of average annual demand, followed by bars and coins
Patterns- at 25%, purchases by central banks at 15%, various techni-

In the last few years, central banks of many countries have cal usages at 8%, and ETFs and similar products at 3%. As
increased their gold purchases to safeguard against the on- per the aforementioned data, as of 2024, the total above-
ground stock of gold stood
The following bar chart shows the top ten countries by gold reserves (in around 216,265 tonnes,
tonnes), as of 30th June 2025. out of which 45% was
held in jewelry, 17% was
held officially by central
banks, and the remainder
was held as investment
and in other forms.

While government and
central banks consider
gold as a safe haven as-
set, individuals also treat
it as a preferred invest-
ment. Globally, jewelry
remains the largest form
of consumption, and after
Data Source: World Gold Council Website China, India is the second-

38 | 2026 | FEBRUARY | BANKING FINANCE