The Reserve Bank of India has categorically denied reports of selling gold reserves, dismissing claims of a sale worth approximately $12 billion. In a clarification issued on Wednesday, the central bank stated that reports in certain sections of the media suggesting a sale of gold were 'not correct'. The RBI confirmed that the country's physical gold holdings stood at 880.52 tonnes and remained unchanged as of the clarification date. The central bank advised the public to rely on official information published by the RBI, emphasizing that the physical stock of gold is disclosed by the RBI in its Monthly Bulletin and remains unchanged at 880.52 tonnes. The clarification followed media reports suggesting the RBI may have reduced part of its gold holdings, estimated at around $12 billion, to protect foreign currency reserves from the impact of ongoing geopolitical tensions in West Asia. The Press Information Bureau (PIB) has labelled the report as 'fake' on X and stated the claims were inconsistent with publicly available data, providing official backing to the RBI's position.
Between May 8-22, global gold prices fell from around $4,650 per ounce to the $4,450-$4,500 range, according to global bullion pricing platforms, explaining the decline in reported reserve value rather than a sell-off by the RBI. The RBI values its gold holdings using London Bullion Market Association (LBMA) prices in US dollars, multiplied by the USD/INR market exchange rate, with import duty changes not factoring into this valuation methodology. Senior treasury officials also point to a possible change in valuation methodology as an additional contributing factor to the reported decline. RBI data further show that the share of gold in India's foreign exchange reserves has risen consistently — from 13.92% at end-September 2025 to 16.70% on 31 March, 2026, and further to 16.85% as of 22 May, 2026, the very period cited in the original report. This confirms that gold's share in total forex reserves has grown from 12% to 17.2% of RBI's net foreign assets by March 2026, primarily due to revaluation gains from higher gold prices.
Gold prices have shown recent stability with 24K gold trading at ₹15,621 per 10 grams and 22K gold at ₹14,319 per 10 grams as of June 4, 2026, showing minimal movement after a slight decline of just ₹1 per gram each. According to Goodreturns.in, 18 carat gold was retailing at ₹11,716 per gram at the time of writing around 9:16 am IST. The 7-day price trend shows 22K gold declining from ₹144,372 on May 26 to current levels, indicating some market correction from recent highs. Gold prices remain elevated due to inflation concerns, global uncertainty, and strong demand for safe-haven assets, with the GST structure adding 3% tax on gold value and 5% on making charges, making the final purchase price higher than the base rate. The government currently levies 6% customs duty (5% Basic Customs Duty + 1% AIDC) on gold imports, which are passed directly to consumers, making any policy changes in Delhi immediately reflected on local jewellers' boards.
Digital gold is gaining significant attention because it allows consumers to invest in small amounts without purchasing physical jewellery or coins. As reported by BankBazaar.com, many platforms now allow investments to begin with very small values, making gold ownership more accessible for younger and first-time investors. The convenience factor is driving this shift, as consumers can buy, sell, and track gold online without visiting physical stores. Digital gold also reduces additional costs linked to making charges, storage, and physical security compared to traditional jewellery purchases. With current prices showing 24K gold at ₹15,621 per 10 grams and 22K gold at ₹14,319 per 10 grams, digital platforms are becoming increasingly attractive for smaller investment amounts. Gold can be bought online through e-commerce platforms in the form of coins, bars, and jewellery with certification and doorstep delivery, while digital gold on apps is also popular among IT professionals seeking pure, fee-free investment-grade gold.
India's gold demand has weakened sharply following the government's decision to raise gold import duty from 6% to 15%, taking the effective tax burden to 18.45%. According to The Times of India, demand reportedly declined by nearly 70% to around 7.5 tonnes in the fortnight after the duty increase compared with 25 tonnes during the corresponding period last year. This dramatic reduction in demand reflects the immediate impact of the substantial duty increase on consumer purchasing power. The hike has made gold significantly more expensive for Indian consumers, with the effective tax burden reaching 18.45% creating a substantial barrier to traditional gold purchases. Despite this setback, gold prices have managed to exhibit some resilience in the domestic market, supported by persistent rupee weakness and the sharp increase in import duties. However, traditionally strong May and June demand periods due to the ongoing Hindu wedding season have been impacted, with buyers now more cautious and postponing big jewellery purchases due to the elevated prices.
Market veteran Ajay Bagga said the report was ill-timed and poorly sourced, adding that India's economic fundamentals remain resilient. Bagga emphasized that "India's gold holdings remain constant. The 1991 comparison — when India had to pledge its gold to secure foreign exchange lines — is simply not applicable today. India in 2026 is a far stronger economy. A clarification should have been sought from the RBI before publishing." His comments highlight the significant difference between India's current economic position and the historical context often invoked in such discussions. The veteran's assessment provides important perspective on how India's financial strength has evolved since the 1991 economic crisis, with the country now maintaining substantial foreign exchange reserves and a more diversified economic base.
The Press Information Bureau (PIB) issued a fact-check backing the RBI's position, noting that the increase in gold's share within India's foreign exchange reserves reflected valuation changes rather than any sale of bullion. According to the PIB, gold accounted for 13.92% of India's foreign exchange reserves at the end of September 2025, rising to 16.70% on March 31, 2026, and further to 16.85% as of May 22, 2026. This confirms that gold's share in total forex reserves has grown from 12% to 17.2% of RBI's net foreign assets by March 2026, primarily due to revaluation gains from higher gold prices. The PIB's confirmation provides official backing to the RBI's clarification that the physical gold stock remains unchanged at 880.52 tonnes and that reports of a sale were inaccurate. This official confirmation reinforces the central bank's stance that the increase in gold's share within India's foreign exchange reserves reflects market valuations rather than actual transactions.
