New Delhi — The global gold market is currently valued at $23 trillion, with India holding a significant 15% share, according to a report released on Monday.
The report, published by DSP Mutual Fund in its July 2025 Netra report, noted that while global foreign exchange reserves stand at around $12.5 trillion, gold continues to gain prominence as a preferred reserve asset.
Of all the gold ever mined, approximately 65% exists in the form of jewellery. The report pointed out that even a modest shift—just 5%—of global reserves into gold could trigger a prolonged and substantial price rally.
Central banks worldwide have notably increased their gold holdings, purchasing more gold in the past four years than they did over the previous 21 years combined. Between 2000 and 2016, central banks bought $85 billion worth of gold, whereas in 2024 alone, they acquired gold valued at $84 billion.
Since 2022, central banks have been purchasing nearly 1,000 tonnes of gold annually, accounting for over a quarter of global annual gold production. This surge in demand reflects many countries’ preference for diversifying away from dollar-denominated reserve assets, given the increased volatility of US Treasury bonds.
India’s Reserve Bank currently holds 880 metric tonnes of gold, based on the latest data. The RBI has yet to make additional gold purchases in FY26, likely waiting for prices to stabilise after gold surged over 80% in the past five years amid global geopolitical and trade tensions.
The report highlighted that gold has recently hit new lifetime highs when adjusted for inflation and remains firmly in a bull market. This trend is driven by limited alternatives to the US dollar as a global reserve currency.
“The euro has repeatedly shown structural vulnerabilities due to the fragmented fiscal nature of the Economic and Monetary Union (EMU),” the report stated. “The Chinese yuan is neither sufficiently market-driven nor politically acceptable to serve as a global reserve currency, while other contenders are simply too small to attract meaningful reserve allocations.”
The report also pointed to India’s strong operating cash flow (OCF) margins, underscoring healthy corporate governance and effective capital allocation, which are seen as positive indicators for the broader economy.
With inputs from IANS