The Reserve Bank of India (RBI) reported a $2.19 billion decrease in the value of its gold reserves during the week ending May 29, 2026. This decline quickly fueled market speculation regarding potential gold sales by the central bank. However, RBI Governor Sanjay Malhotra swiftly clarified that no gold had been sold, attributing the change solely to valuation adjustments influenced by international gold prices.
According to the RBI's latest weekly statistical supplement, the total value of gold reserves stood at $112.60 billion as of May 29. While gold's reported value fell, India's foreign currency assets, the largest component of its overall foreign exchange reserves, saw an increase of $3.12 billion, reaching $546.15 billion in the same period. This rise in foreign currency assets helped stabilize the country's reserve position despite the reported dip in gold's value.
Valuation Changes, Not Sales
The RBI emphasized that the reduction in gold reserves was primarily a reflection of valuation changes rather than any actual transactions involving the precious metal. Gold reserves are denominated in US dollars and are revalued weekly based on prevailing international market prices. Consequently, fluctuations in global gold prices and currency movements can significantly impact the reported value, even when the physical quantity of gold held by the central bank remains constant.
Addressing queries during a post-monetary policy press conference, Governor Malhotra stated, "No. RBI has not sold gold. There has only been a marginal increase in our gold holdings."
This clarification directly countered a Bloomberg Economics analysis that had suggested a possible sale of approximately $12 billion worth of gold over a two-week period ending May 22. Such analyses had led to speculation that the central bank might be using gold reserves to support the rupee or bolster its foreign exchange position amidst global market uncertainties.
Physical Holdings Remain Stable
The RBI categorically denied any such claims, confirming that its physical stock of gold remains unchanged at 880.52 tonnes. The central bank reiterated that movements in the value of gold reserves should not be confused with changes in actual holdings, as valuation gains and losses are a routine aspect of reserve management. The government's Press Information Bureau (PIB) also dismissed reports of gold sales as "fake," citing official RBI data that shows gold's share in India's foreign exchange reserves has steadily increased, from 13.92% in September 2025 to 16.85% by May 22, 2026.
Growing Role of Gold in Reserves
The latest figures underscore the increasing importance of gold in India's reserve management strategy. Central banks globally have been augmenting their gold allocations in recent years, viewing it as a hedge against geopolitical risks, inflation concerns, and volatility in major currencies. As of March 2026, India held 880.52 metric tonnes of gold. Notably, the RBI's reserve management report indicated a rise in the domestic storage of gold, with approximately 77% of the country's gold now held within India, up from 66% six months prior.
While the market value of India's gold reserves may fluctuate weekly, the RBI has consistently affirmed that the nation's physical gold holdings are stable and continue to form an increasingly vital pillar of its foreign exchange reserves.