{"id":31634,"date":"2024-11-02T17:58:56","date_gmt":"2024-11-02T12:28:56","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=31634"},"modified":"2024-11-02T17:58:58","modified_gmt":"2024-11-02T12:28:58","slug":"gold-reserves","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/02-11-2024\/gold-reserves","title":{"rendered":"Gold Reserves"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India\u2019s gold reserves currently total 854.73 metric tonnes, according to a recent Reserve Bank of India (RBI) report.\n<ul class=\"wp-block-list\">\n<li>Of this, 510.46 metric tonnes are held within the country, while 324.01 metric tonnes are stored with the Bank of England and the Bank for International Settlements (BIS).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Gold now makes up <strong>9.32% of India\u2019s total foreign exchange reserves<\/strong>, a rise from 8.15% in March 2024.\u00a0<\/li>\n\n\n\n<li>On a global scale, <strong>India ranks 8th for gold reserves.<\/strong> The top-ranking countries are the United States, Germany, and Italy, with the U.S. holding nearly as much gold as the combined reserves of Germany, Italy, and France.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Gold Reserves<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Gold has <strong>lower co-relation with other asset classes<\/strong> and, therefore, provides a <strong>safety cushion <\/strong>during periods of geopolitical stress and prevailing economic uncertainty and\/or downturn in markets.<\/li>\n\n\n\n<li><strong>Prices of gold are<\/strong> suggested to hold an <strong>inverse relationship with interest rates.\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li>When interest rates are tightened gold becomes less attractive to investors as they do not offer any yield.\u00a0<\/li>\n\n\n\n<li>Conversely, lower interest rates coupled by a weaker dollar can prompt investors to also opt for the safety bullion cushion.\u00a0<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Central banks accumulate gold for several reasons:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Monetary Stability: <\/strong>Gold provides a store of value and is often used as a safeguard against economic uncertainty.<\/li>\n\n\n\n<li><strong>Currency Support:<\/strong> Gold reserves enhance a nation&#8217;s currency credibility, as it is seen as a backing for the currency\u2019s value.<\/li>\n\n\n\n<li><strong>Investment Diversification:<\/strong> Holding gold diversify a central bank&#8217;s assets, reducing risk in their investment portfolios.<\/li>\n\n\n\n<li><strong>International Trade and Payments: <\/strong>Gold reserves facilitate international trade and payments, serving as a universally accepted form of currency.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Countries with significant gold reserves include the <strong>United States, Germany, Italy, and France.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Gold Reserves Strategy<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The RBI continues to retain 324 tonnes of its gold reserves under the protection of the <strong>Bank of England and the Bank for International Settlements, <\/strong>which collectively hold a substantial portion of India&#8217;s gold abroad.\u00a0<\/li>\n\n\n\n<li><strong>The Bank of England, <\/strong>established in <strong>1697<\/strong>, is renowned for its extensive gold storage facilities and remains the world\u2019s second-largest gold custodian after the New York Federal Reserve.\n<ul class=\"wp-block-list\">\n<li>Storing part of India\u2019s gold in London provides the RBI with <strong>immediate access to the London bullion market,<\/strong> allowing for enhanced liquidity.\u00a0<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/epaper.thehindu.com\/ccidist-ws\/th\/th_international\/issues\/105561\/OPS\/G5IDG8EOK.1+GLPDHCDFL.1.html\" target=\"_blank\" rel=\"noopener\"><strong>TH<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s gold reserves currently total 854.73 metric tonnes, according to a recent Reserve Bank of India (RBI) report.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-31634","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/31634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=31634"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/31634\/revisions"}],"predecessor-version":[{"id":31635,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/31634\/revisions\/31635"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=31634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=31634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=31634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}