India Embraces Gold Instead of U.S. Dollar
When Indian Prime Minister Narendra Modi embraced Russian President Vladimir Putin at their Moscow summit on July 9, the moment was rich with symbolism, not merely political but also financial. India has been a major buyer of Russian military and energy equipment, and especially Russian oil after Western nations imposed sanctions to limit Russia’s energy revenues. India is also following Russia’s lead in embracing gold as a core reserve asset.
Witnessing the fact that U.S. sanctions have frozen Russia’s $5 billion of dollar-denominated assets in the United States—and can now be legally seized to benefit Ukraine as part of the latest U.S. aid package for Kyiv—India is reducing its reliance on the U.S. dollar as a reserve asset and is aggressively accumulating gold.
India’s central bank, the Reserve Bank of India (RBI), added more than nine metric tons of gold to its reserves in June, the largest monthly increase in two years, according to the World Gold Council, which calculates Indian gold reserves have grown by 37 tons this year to 841 tons. That’s more than India purchased in all of 2023. India now holds 9 percent of its reserve assets in gold, significantly more than any other leading Asian economy; China has just 4.6 percent of its reserve assets in gold.
Meanwhile, the Reserve Bank of India has also moved 100 tons of its gold from storage in the United Kingdom to vaults in Mumbai, India, the largest transfer of Indian gold since 1991.
RBI Governor Shaktikanta Das recently stated that the country is accelerating its gold purchases in response to the sanctions imposed on Russia after its invasion of Ukraine. On the same day, Madan Sabnavis, chief economist of a leading Indian bank, declared, “While the U.S. dollar has historically been a stable currency, its reliability has diminished following the Ukraine conflict.”Real Time Precious Metals Data Below
