Gold, one of the rarest elements found in the Earth’s crust, has stood the test of time over thousands of years. Gold, a versatile element, is used in various industrial applications beyond its wearable status.
However, what distinguishes it from all other asset classes is its reputation as the ‘bedrock’ of safe-haven wealth.
It’s not just people like you and me, even institutions hold a portion of their savings in gold. India’s central bank, the Reserve Bank of India (RBI), has a significant amount of gold holdings. What’s more, the RBI has been aggressively buying gold over the past few years.
RBI’s Gold Rush
The share of gold in the RBI’s Forex kitty has increased by 25% since 2021. RBI is not alone. Central banks worldwide have been significant gold buyers in recent years. Over the last 3 years, central banks added over 1,000 tonnes of gold to their forex reserves.
In the rare instance you are wondering why central banks buy gold with public money, read my detailed note here…
RBI’s data show that the exposure to gold in India’s forex reserves (in dollars) rose from 5.87% in March 2021 to 11.7% in March 2025. In just four years, the RBI’s allocation to gold assets has doubled.
In terms of hard numbers, Foreign Exchange Reserves of the RBI are $690 billion (as of May 9), of which gold is worth $86 billion. This means nearly 12.46% of India’s forex reserve is held in gold.
Interestingly, most financial planners in India suggest not holding more than 10% of their portfolio in gold. RBI just crossed that golden line.
In 2024 alone RBI bought 57.5 tonnes of gold. The interesting part of RBI’s gold holdings is how it physically stores the precious metal. Where exactly and in what form?
“As of March 2025, the Reserve Bank held 879.59 metric tonnes of gold, of which 511.99 metric tonnes were held domestically. While 348.62 metric tonnes of gold were kept in safe custody with the Bank of England and the Bank for International Settlements (BIS), 18.98 metric tonnes were held in the form of gold deposits,” reads the RBI’s Half Yearly Report on Management of Foreign Exchange Reserves published on May 5.
How Much Gold Can You Keep at Home
But, that’s about RBI, what about you? Can Indians buy as much gold as they want, needless to say, if one has cash to spare?
The answer is Yes. You can own unlimited gold jewelry or ornaments, provided you buy it from declared income sources, including declaring any inheritances.
The income tax rules also clarify that jewellery and ornaments to the extent of 500 grams for a married lady, 250 grams for an unmarried lady, and 100 grams for the male member will not be seized, even if prima facie, it does not seem to be matching with the income record of the individual.
However, if you have a lot more gold at home, there’s nothing to be scared of. The search officer conducting the search has the authority to decide not to confiscate an even greater amount of gold jewellery, depending on a number of criteria, including family traditions and customs.
Also, married women who get jewelry in the form of “stree dhan” on a variety of events, such as a child’s birth, birthdays, marriage anniversaries, etc., and that has been amassed over the years, are not included.
Should you be buying gold aggressively?
Gold rate today in India is Rs 93,350, nearly 7% lower than the all-time high of Rs 1 lakh reached on April 22. In the international market, gold trades at $3,150, down over 10% from the all-time high level of $3,500.
The current dip in gold prices could be an opportunity for long-term investors in gold. Though one needs to be cautious about going overboard on any one single investment opportunity.
Also Read: Is the gold bull run over?
So, have a proper investment plan in place.
A well-structured plan should include equity exposure for long-term goals, debt exposure for medium-term goals, and gold as a hedge and diversifier for your portfolio.
