Global Gold Rush: Why China and India Are Increasing Their Gold Reserves
Gold Prices Hit Record Highs as Central Banks Worldwide Boost Bullion Holdings
India’s Gold Price Crosses ₹1.21 Lakh per 10 Grams
Gold has always been considered a safe investment, but in recent months, its prices have soared to unprecedented levels.
On October 8, 2025, the price of 10 grams of gold in India surpassed ₹1.21 lakh, marking a record high. Over the past five years, gold prices have crossed the ₹1 lakh mark, creating concern among common buyers about affordability.
Global Factors Driving the Surge
Experts attribute the rise in gold prices to global economic tensions, inflationary pressure, and the growing trend of central banks diversifying away from the US dollar.
Between 2023 and 2025, gold prices surged from around ₹70,000 per tola to over ₹1.25 lakh, a 75% increase.
China’s Aggressive Gold Buying Strategy
China has emerged as one of the largest official buyers of gold in the world.
According to data from the People’s Bank of China, the country purchased around 39.2 tonnes of gold between January and September 2025, bringing its total reserves to 2,298.5 tonnes as of October 8, 2025.
China continues to buy 2–5 tonnes of gold per month, steadily building its reserves.
Why China Is Buying Gold
Economists point to several strategic motives behind China’s consistent gold accumulation:
-
Reducing Dependency on the US Dollar — China holds vast dollar reserves but wants to diversify into assets not tied to US economic performance.
-
Hedging Against Geopolitical Risks — Ongoing conflicts like the Russia-Ukraine war and rising global sanctions have pushed many nations to seek “safe haven” assets like gold.
-
Inflation Protection — With inflation high and currency volatility increasing, gold provides a stable store of value.
Some analysts also believe China is strengthening the global standing of its currency (the yuan) by backing it with stronger gold reserves.
Global Trend: Central Banks Stocking Up on Gold
China is not alone. Central banks in India, Russia, and Turkey have all increased gold purchases in recent years.
Since 2022, central banks globally have been collectively buying over 1,000 tonnes of gold per year, aiming to reduce reliance on the dollar and protect reserves from inflation.
India’s Rising Gold Holdings
India’s Reserve Bank of India (RBI) has also expanded its gold holdings steadily.
As of October 8, 2025, India’s total gold reserves reached 880 tonnes, up from 557.7 tonnes in 2015 — a 58% increase over the past decade.
Of this, around 512 tonnes are stored domestically in Nagpur and Mumbai, while the rest is held with the Bank of England and the Bank for International Settlements.
Gold now accounts for 11.7% of India’s total foreign exchange reserves.
The Bigger Picture
Globally, central banks’ preference for gold reflects a shift in reserve management philosophy — moving away from fiat currencies toward tangible, crisis-resistant assets.
Analysts believe this trend will continue as nations look to secure their economies against inflation, sanctions, and geopolitical shocks.
