New Delhi: The Reserve Bank of India, as on March 31 this year, held 879.58 metric tonnes of gold as compared to 822.10 metric tonnes as on March 31, 2024, reflecting an increase of 57.48 metric tonnes, the Parliament was informed on Monday.
These gold holdings contribute to strengthening confidence in the Indian rupee and the overall external stability of the economy, Minister of State for Finance Pankaj Chaudhary told the Lok Sabha in a reply to a question.
To questions about the surge in gold and silver prices in the domestic market, he said that domestic prices of precious metals like gold and silver are primarily determined by their prevailing international prices (in US dollar terms), the exchange rate of the Indian rupee against the US dollar and applicable tariffs.
The recent surge in prices is largely attributable to heightened geopolitical tensions and uncertainty over global growth, which have boosted safe-haven demand, including substantial gold purchases by central banks and major institutions worldwide.
The minister said that the recent rally in gold prices may have differential effects across states or population groups, depending upon the degree of socio-cultural and economic reliance on these precious metals.
“They serve a dual role — not only as a consumption item but also as an investment avenue, as they are considered safe assets for hedging against uncertainties,” he said.
Thus, an increase in the price of gold or silver positively influences household wealth, as the notional value of existing gold or silver holdings appreciates, he added.
Chaudhary further stated that the prices of precious metals are determined by the market, and the government is not involved in the price fixation.
However, the government, as a relief measure for consumers, lowered customs duty on gold imports from 15 to 6 per cent in July 2024.
The government introduced measures such as the Gold Monetisation Scheme (GMS), Gold exchange traded funds (ETFs) and Sovereign Gold Bond Scheme to reduce the demand for physical gold and to mobilise idle domestic gold, so that part of the demand is met from local stocks rather than fresh imports, thereby reducing external vulnerability and price pressures.
“The RBI and government regulation of bullion imports through nominated agencies, banks and refineries improve traceability, reduce grey market channels and help domestic prices more smoothly track global benchmarks rather than react to shortages or speculative spikes,” the minister said.
(IANS)
