Winning Bizness Desk

Mumbai. The Reserve Bank of India (RBI) was the third largest gold buyer in the world in May as it bought gold worth about Rs 722 crore last month, according to the World Gold Council. Only Switzerland and China bought more gold than India. In the last 5 financial years, India upped its gold reserve by about 204 tonnes of gold. In March 2019, the country's gold reserve was 618.2 tonnes, which rose up by 33% to 822.1 tonnes on 31 March 2024. However, during this period, gold prices have increased by about 70%. Due to rising gold prices, the average daily trading volume in the global gold market was Rs 18 lakh crore last month. This is 13% less than April 2024, but 32.51% more than the average of Rs 13.6 lakh crore per day in 2023.

Gold prices keep going up

Gold prices rose for the third consecutive month in May. But on Friday (June 7), jewelry gold (22 carat) in the country fell by Rs 773 per 10 grams to Rs 65,872. The price of 24 carat gold also fell by Rs 844 to Rs 71,913 per 10 grams as compared to Thursday. According to the data, investment in Global Gold ETF increased in May affecting the decline that continued for the last 12 months. Europe, Asia played a major role in gold ETF investment, while minor withdrawals were made in America and other regions. Driven by inflows and higher gold prices, total AUM rose 2% on a monthly basis to $234 billion (about Rs 19.5 lakh crore) in May.

Prices went up Rs 8,000 so far this year

According to the India Bullion and Jewelers Association (IBJA), gold prices have risen by Rs 8,561 so far this year. On January 1, gold was at Rs 63,352, which has now reached Rs 71,913 per 10 grams. At the same time, the price of one kg silver has increased from Rs 73,395 to Rs 90,535.

India recalled 100 tonnes of gold last month

Notably, in an unprecedented move, the Reserve Bank of India (RBI) recalled 100 tonnes (about 1 lakh kg) of gold from Britain, by a special aircraft. This was the first time since early 1991 that so much gold has returned to India's reserves. RBI held a total of 822.1 tonnes of gold at the end of March 2024, of which 413.8 tonnes were deposited abroad. RBI has been one of the central banks buying gold in the past few years. Owing to this, 27.5 tonnes of gold has increased in the Reserve Bank's gold reserves in the last financial year. This step will also help the RBI to save some of the storage costs, which it used to pay to the Bank of England. However, this amount is not so big.