India now accounts for 15 percent of the $23 trillion global gold market, according to the July 2025 Netra report released by DSP Mutual Fund. The report highlights a significant shift in global reserve trends, with central banks increasingly favoring gold over traditional assets like the US dollar.
With global forex reserves at approximately $12.5 trillion, a modest reallocation, just 5 percent, into gold could trigger a substantial and sustained price rally, the report stated. Currently, 65 percent of all gold mined globally is in the form of jewellery.
The report reveals that central bank gold purchases have surged in recent years, outpacing two decades of acquisitions. Between 2000 and 2016, central banks bought $85 billion worth of gold. In contrast, in 2024 alone, gold purchases reached $84 billion. Since 2022, central banks have been acquiring nearly 1,000 tonnes annually, more than a quarter of the world’s total annual mining output.
This aggressive buying spree reflects a growing desire among nations to hold non-dollar assets amid volatility in US Treasury Bonds, making gold a preferred safe-haven investment.
India’s central bank, the Reserve Bank of India (RBI), currently holds 880 metric tonnes of gold. As of FY26, the RBI has not added to its reserves, likely awaiting a market correction after gold prices surged over 80 per cent in five years due to geopolitical and trade uncertainties.
Gold has now reached a new lifetime high when adjusted for inflation and remains in a bull market, bolstered by a lack of viable alternatives to the US dollar. The euro continues to struggle due to structural fiscal issues within the Economic and Monetary Union, while the Chinese yuan remains politically and economically unappealing as a global reserve currency. Other potential contenders lack sufficient scale to attract meaningful reserve allocations.
The report also notes a positive domestic trend: strong and sustained growth in operating cash flows has led to elevated operating cash flow (OCF) margins in India. This, the report says, signals healthy corporate governance and efficient capital allocation practices.
