Central Banks Bolster Bullion Reserves Amid Global Uncertainty

Quick Summary

• Global Gold Purchases: Central banks globally net bought 166 tonnes of gold in Q2 2025, a 33% quarter-on-quarter drop and the lowest since June 2022.However,this figure is still 41% higher than the average quarterly levels between 2010-2021.
• First-half Data: In H1 2025, central banks purchased 415 tonnes of gold compared to last year’s 525 tonnes-marking a slowdown attributed to elevated gold prices and geopolitical uncertainty.
• De-Dollarisation Trend: Analysts suggest ongoing diversification away from dollar reserves in favor of strategic assets like gold.The dollar’s share in FX reserves has been declining amid global economic shifts.
• india’s Role: The Reserve Bank of India (RBI) acquired nearly half a tonne of gold in late June, increasing its total holdings to approximately 880 tonnes. Gold now constitutes about 12.1% of India’s foreign exchange reserves versus last year’s share of 8.9%.
• Other Buyers:

– poland was the largest purchaser (19 tonnes) during Q2.
– China added six tonnes during this period, reaching total reserves of 2,299 tonnes but halving its previous quarterly purchases.

Indian Opinion Analysis

India remains an active participant in the growing trend among central banks to diversify foreign reserve holdings by increasing exposure to gold-a shift driven by concerns over dollar volatility and geopolitical uncertainties like trade tariffs. With RBI steadily expanding its bullion portfolio within forex reserves (now standing at over one-tenth), this appears as part of India’s broader strategy for economic resilience.

Globally, while Q2 saw reduced purchasing activity relative to prior quarters due to elevated prices and uncertain conditions, long-term trends point toward consistent interest from central banks using bullion assets as a hedge against risks tied to US-dollar dependency or inflationary pressures. This growth underscores how India’s actions reflect wider international priorities around economic diversification amid evolving macroeconomic landscapes.

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