Central banks across the globe are on a historic gold-buying spree, and it’s not just about market timing—it’s about preparing for a more uncertain world.
Chakravarthy V, a wealth advisor, captured the moment in a LinkedIn post: “Central banks are now buying over 1,000 tons of gold a year. That’s more than 1 in every 3 gold bars mined globally. It’s not just a trend—it’s a signal.”
For decades, gold quietly held its place in central bank reserves as a traditional store of value. But something changed in 2022. As geopolitical tensions rose, inflation surged, and the reliability of fiat currencies came under question, central banks began shifting toward physical assets with renewed urgency.
According to Chakravarthy, what’s happening now is not a minor portfolio adjustment but a “shift in mindset.” He points to the Reserve Bank of India (RBI) as a prime example. Just a few years ago, gold made up about 6% of India’s reserves. Today, that share has doubled to nearly 12–13%.
In FY25, the RBI added 57.5 tonnes of gold—its largest annual purchase in seven years—taking total holdings to a record 879.58 tonnes. The value of these reserves surged to ₹6.68 lakh crore as of March 31, 2025, up from ₹4.39 lakh crore the previous year.
A 30% global rally in gold prices, coupled with rupee depreciation, amplified the value of its stockpile. Notably, the gold held under the RBI’s Banking Department alone rose 57% in value to ₹4.31 lakh crore.
This massive build-up isn’t driven by a single concern—it’s a reaction to a converging set of global risks. The freezing of Russia’s foreign reserves in response to the Ukraine war exposed the vulnerability of holding assets in Western currencies.
With sanctions now a common geopolitical tool, gold’s appeal as a seizure-proof asset has grown sharply. Inflation, currency volatility, and rising debt levels in advanced economies have further weakened trust in traditional safe havens like U.S. Treasuries.
Gold, in contrast, has no counterparty risk. It doesn’t depend on the solvency of a government or a bank. It exists outside the digital financial system and holds its value across decades, even centuries.
For countries looking to reduce their exposure to the U.S. dollar and hedge against financial instability, gold offers a kind of security no bond or currency can match.
What we are seeing is not just a run to safety, but possibly the early contours of a global financial recalibration. Some speculate this could lead to the erosion of dollar dominance or the emergence of a more diversified currency system, potentially backed by tangible assets.
Chakravarthy leaves little room for doubt about the direction we’re headed. “Whatever comes next,” he writes, “one thing’s likely: volatility is coming. And gold? It’s looking more like a shield than a luxury.”