India gives itself Dhanteras gift, shifting 102 tonnes of gold from Bank of England vault

The Reserve Bank of India (RBI) announced on October 29, the date of Dhanteras this year and an auspicious occasion for Indians to buy gold, that the country had relocated 102 tonnes of gold from the Bank of England vaults in London to secure locations within India.

While these gold reserves were already a national asset for India — only their location has now changed — the timing of the RBI announcement makes it seem that the country has given itself a Diwali gift.

A Times of India report said that out of the total 855 tonnes Indian gold reserves, about 510 tonnes were now held in locations within the country. The gold has been moved in parts from Bank of England to India.

Like before, the RBI and the Indian government carried out a covert mission, employing special aircraft and implementing comprehensive security measures to ensure the secrecy of the operation.

Since September 2022, a total of 214 tonnes of gold have been relocated to India, reflecting the RBI’s and the government’s strategy to safeguard gold reserves amid rising geopolitical tensions globally. About 325 tonnes still remain with the Bank of England (United Kingdom) and the Bank for International Settlements (Basel, Switzerland). Another 20 tonnes are held in gold deposits.

Officials speaking to The Times of India expressed a growing sentiment within the Indian government to maintain its gold reserves within the country, particularly in the context of increasing global uncertainties.

Gold is widely regarded as a safe-haven asset due to its stability during economic downturns. Unlike currency notes, the yellow metal cannot be devalued through overprinting, making it a robust hedge against inflation.

Gold prices also tend to be less volatile compared to stocks and other securities, reinforcing its reliability as a financial asset.

The Bank of England has traditionally served as a primary depository for central banks worldwide, and India’s gold reserves in London date back to the pre-Independence era. By relocating this gold to domestic vaults, the RBI is also expected to reduce storage costs paid to the Bank of England.