India currently holds approximately 15 percent of the $23 trillion global gold market, according to the July 2025 Netra report by DSP Mutual Fund. The report highlights that while global foreign exchange reserves total around $12.5 trillion, gold has emerged as a preferred asset, particularly among central banks seeking alternatives to the US dollar.
Jewellery remains the dominant use for mined gold, accounting for 65 percent of the total stock. A mere 5 percent shift in global reserves into gold could trigger a sustained rally in its price, the report suggests. This scenario appears increasingly likely given that central banks purchased more gold in the last four years than in the previous 21 combined. In 2024 alone, central bank gold purchases touched $84 billion—nearly matching the cumulative figure from 2000 to 2016. Since 2022, they have acquired nearly 1,000 tonnes annually, equivalent to over a quarter of yearly global mining output.
This surge reflects a growing global preference for non-dollar reserve assets. Volatility in US Treasury bonds has made gold more attractive for central banks, underscoring gold’s resurgent status as a safe-haven asset.
India’s Reserve Bank holds 880 metric tonnes of gold, according to the latest data. The RBI has not added to this stockpile in FY26 so far, possibly awaiting a correction after gold prices soared over 80 percent in five years amid persistent geopolitical and trade instability. Gold has also reached a new inflation-adjusted lifetime high, entering a strong bull market cycle.
The report notes that alternatives to the US dollar remain limited. The euro continues to exhibit structural weaknesses due to the fiscal rigidity within the Economic and Monetary Union, while the Chinese yuan lacks the market credibility and political acceptability required to function as a global reserve currency. Other competitors are deemed too small to attract significant reserve asset flows.
Separately, the report points to robust operating cash flow (OCF) margins in Indian companies, with rising OCF seen as a healthy sign for both capital deployment and corporate governance. This financial strength complements India’s growing gold holdings, reinforcing the nation’s macroeconomic resilience.
