Source: BL
Context
The World Gold Council’s (WGC) 2026 Central Bank Gold Reserves (CBGR) survey indicates that central banks around the world would continue accumulating gold in the future. Over the past 4 years, central banks have accumulated an average of 1,000 tonnes of gold annually, double the 500-tonne average of the preceding decade. Indian gold prices have risen by about 40 per cent in 12 months, driven by central banks’ buying and rupee’s depreciation against the US dollar. The Reserve Bank of India (RBI) has been aggressively expanding its gold reserves, with total holdings rising from 822.1 tonnes in FY24 to 879.58 tonnes in FY25, and marginally to 880.52 tonnes in FY26. The survey was conducted 5 February to 19 May 2026, with most responses coming after the West Asia conflict began.
The Survey
- Released by: World Gold Council (WGC).
- Edition: 2026 Central Bank Gold Reserves (CBGR) survey.
- Survey period: 5 February to 19 May 2026.
- Most responses: Received after the West Asia conflict began.
Key Findings
- Central banks remain very positive on gold.
- Gold’s role: Reflects significance amid volatile geopolitical and economic environment.
- Continuation of multi-year trend: Central banks see gold making up a growing share of reserve portfolios.
India’s Gold Reserves
| Period | RBI’s Gold Reserves |
|---|---|
| FY24 | 822.1 tonnes |
| FY25 | 879.58 tonnes |
| FY26 | 880.52 tonnes |
| FY24 to FY26 increase | ~58.4 tonnes |
Why Are Central Banks Buying Gold?
- Diversification away from US dollar reserves.
- Hedge against inflation and currency depreciation.
- Hedge against geopolitical risks and sanctions.
- Lessons from Russia’s frozen reserves (2022).
- Distrust of Western financial system by some EMs.
- Long-term store of value.
About the World Gold Council (WGC)
- A global market development organisation for the gold industry.
- Founded: 1987.
- Headquartered: London, UK.
- Members: Over 30 leading gold mining companies.
- Functions:
- Market intelligence and research.
- Industry promotion.
- Investment products (e.g., SPDR Gold Shares ETF).
- Central bank engagement.
- Key publications:
- Gold Demand Trends (quarterly).
- Central Bank Gold Reserves Survey.
Global Top 10 Gold-Holding Central Banks (Approximate, Mid-2026)
| Rank | Country | Approximate Reserves (Tonnes) |
|---|---|---|
| 1 | United States | 8,133 |
| 2 | Germany | 3,352 |
| 3 | IMF (international body) | 2,814 |
| 4 | Italy | 2,452 |
| 5 | France | 2,437 |
| 6 | Russia | 2,332 |
| 7 | China | 2,279+ (rising) |
| 8 | Switzerland | 1,040 |
| 9 | India | 880.52 (FY26) |
| 10 | Japan | 846 |
Why is Gold a Reserve Asset?
- Universal acceptance.
- No counter-party risk (unlike fiat currencies or bonds).
- Historical store of value over 5,000+ years.
- Liquid market.
- Hedge against inflation and currency debasement.
- Politically neutral asset.
Sovereign Gold Bonds (SGB)
- Launched in 2015 by the Government of India through the RBI.
- Tenure: 8 years, with early exit after 5 years.
- Interest rate: 2.5 per cent per annum (in addition to gold price appreciation).
- Tax benefits: Capital gains tax exemption if held to maturity.
- Issuance paused in FY25 and FY26 due to high government cost.
Gold Monetisation Scheme (GMS, 2015)
- Allows households to deposit physical gold with banks and earn interest.
- Aim: To mobilise idle gold in Indian households (estimated 25,000-30,000 tonnes).
- Three categories: Short-term, medium-term, long-term deposits.
Why Did RBI Increase Gold Reserves?
- Diversification of forex reserves.
- Hedge against US dollar depreciation.
- Reduce dependence on single-currency assets.
- Boost reserve quality.
- Geopolitical hedge following Russia’s frozen reserves.
- Long-term store of value.
Practice MCQs
Q1. With reference to the WGC’s 2026 Central Bank Gold Reserves Survey, consider the following statements:
- Central banks have accumulated an average of 1,000 tonnes of gold annually over the past 4 years.
- This is double the 500-tonne average of the preceding decade.
- India’s gold reserves rose from 822.1 tonnes in FY24 to 880.52 tonnes in FY26.
- The survey shows central banks are negative on gold and plan to reduce holdings.
How many of the above statements are correct?
(a) Only one (b) Only two (c) Only three (d) All four (e) None
(Statement 4 is wrong; central banks remain VERY POSITIVE on gold and plan to increase holdings.)
Q2. With reference to the World Gold Council (WGC), consider the following statements:
- WGC is a global market development organisation for the gold industry.
- It was founded in 1987 and is headquartered in London, UK.
- WGC’s members include over 30 leading gold mining companies.
- WGC publishes Gold Demand Trends (quarterly) and Central Bank Gold Reserves Survey (annual).
How many of the above statements are correct?
(a) Only one (b) Only two (c) Only three (d) All four (e) None
Q3. With reference to India’s gold reserves and forex reserves, consider the following statements:
- India’s gold reserves were 880.52 tonnes at the end of FY26.
- India’s forex reserves are over USD 700 billion.
- Gold’s share in India’s forex reserves is about 9-10 per cent.
- India does not hold any gold in its forex reserves.
Which of the above are correct?
(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four
(Statement 4 is wrong; India holds 880.52 tonnes of gold in its forex reserves.)
Q4. With reference to Sovereign Gold Bonds (SGB), consider the following statements:
- SGBs were launched in 2015 by the Government of India through the RBI.
- The tenure is 8 years with an early exit option after 5 years.
- SGBs offer 2.5 per cent annual interest in addition to gold price appreciation.
- Capital gains tax is exempt if SGBs are held to maturity.
How many of the above statements are correct?
(a) Only one (b) Only two (c) Only three (d) All four (e) None
Q5. With reference to India’s position in global gold consumption and reserves, consider the following statements:
- India is the world’s 2nd-largest gold consumer, after China.
- India’s annual gold demand is about 750-800 tonnes.
- India ranks among the top 10 gold-holding central banks globally.
- Gold has no cultural or religious significance in India.
Which of the above are correct?
(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four
(Statement 4 is wrong; gold has deep cultural and religious significance in India.)
Answer Key
- (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because central banks remain very positive on gold.
- (d), All four statements are correct.
- (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India holds 880.52 tonnes of gold.
- (d), All four statements are correct.
- (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because gold has deep cultural significance.
Exam Relevance
| Banking (RBI Gr B, SBI PO, IBPS, NABARD) | Very high importance, RBI reserves, gold, forex, SGB, GMS |
| RBI Grade B | Core area on monetary policy, forex management, gold |
| NABARD Grade A | General awareness on financial sector |
