NEW DELHI– India holds 15 percent of the $23 trillion global gold market, according to the July 2025 Netra report released by DSP Mutual Fund. The report highlights gold’s growing dominance as a global safe-haven asset amid rising demand from central banks and persistent economic uncertainty.
While global foreign exchange reserves total approximately $12.5 trillion, the value of the global gold market has surged to $23 trillion. Of all the gold ever mined, 65 percent is in the form of jewelry. Notably, even a modest shift—such as 5 percent of global reserves moving into gold—could spark a sustained and significant rally in prices, the report said.
One of the key drivers of gold demand is the aggressive accumulation by central banks. From 2000 to 2016, central banks collectively purchased $85 billion worth of gold. By contrast, in 2024 alone, they bought gold valued at $84 billion.
Since 2022, central banks have been acquiring nearly 1,000 metric tonnes of gold annually—more than a quarter of global mining output each year. This trend signals a strong shift toward non-dollar reserve assets, particularly amid growing volatility in U.S. Treasury markets.
“The volatile nature of U.S. Treasury bonds has made gold an increasingly attractive reserve instrument,” the report noted. “Demand remains strong, for now.”
India, one of the world’s largest consumers of gold, holds approximately 880 metric tonnes through the Reserve Bank of India (RBI), according to the latest figures. However, the RBI has not added to its holdings so far in FY26, likely waiting for a pullback in prices. Gold has surged more than 80 percent over the past five years, driven by global geopolitical tensions and trade uncertainties.
In inflation-adjusted terms, gold has hit a new all-time high and is firmly entrenched in a bull market. The report attributed this to the lack of credible alternatives to the U.S. dollar.
“The euro continues to show vulnerabilities due to the fiscal fragility of the Economic and Monetary Union (EMU),” the report said. “The Chinese yuan remains far from being market-driven or widely accepted politically. Most other currencies are too small to attract meaningful reserve allocations.”
The report also touched on India’s domestic economic performance, noting that sustained strength in operating cash flows has led to elevated operating cash flow (OCF) margins. This, it said, is a positive indicator for both capital allocation and corporate governance in the country. (Source: IANS)
