New Delhi: While global forex reserves total around $12.5 trillion, the gold market is currently valued at $23 trillion, 15 per cent of which is held in India, according to a report released on Monday. 

Of the total mined gold ever, 65 per cent is in the form of jewellery, and a mere 5 per cent shift of global reserves into gold could trigger a sustained and significant rally in its price, according to the DSP Mutual Fund's July 2025 Netra report.

Central bank gold reserves are rising, and they bought more safe-haven assets in the last four years than in the previous 21 years.

Central bank gold purchases from 2000 to 2016 totalled $85 billion. But in a single year, 2024, central banks bought gold worth $84 billion.

In fact, since 2022, Central banks have bought nearly 1,000 tonnes of the precious metal each year, which is more than a fourth of the annual mining supply of gold, according to the report.

This torrent of gold purchases reflects the affinity of most countries to hold non-dollar reserve assets. The volatile nature of the US Treasury Bonds has made gold an even more attractive instrument for Central banks. Demand for gold, therefore, is strong, for now, the report mentioned.

In India, the Reserve Bank of India’s total gold holdings amount to 880 metric tonnes, according to the latest data. It has not added to its gold stash in FY26 yet, likely waiting for the softening of the safe-haven asset prices that surged more than 80 per cent in five years amid geopolitical and trade uncertainties.

Gold has made a new lifetime high in inflation-adjusted terms and is firmly in a bull market. This happened as the alternatives to the US dollar are scarce.

“Euro has repeatedly shown vulnerabilities due to a rugged fiscal make of the Economic and Monetary Union (EMU). The Chinese yuan is far from market-driven or politically palatable enough to be the reserve currency, and most other competitors are now too small to attract reserve asset purchases,” the report mentioned.

The report further stated that sustained strength in operating cash flows has resulted in elevated operating cash flow (OCF) margins in India, which is a positive indicator from both a capital allocation and corporate governance standpoint. (IANS)