RBI gold reserves value falls $2.19 billion in a week; Governor Malhotra says no gold was sold

The value of the Reserve Bank of India's (RBI) gold reserves declined by $2.19 billion during the week ended May 29, 2026, according to the central bank's latest weekly statistical supplement. The drop in valuation sparked market speculation that the RBI may have sold part of its gold holdings, but Governor Sanjay Malhotra has firmly rejected such claims, stating that the central bank's gold stock remains intact and has actually increased marginally.

RBI data showed that the value of gold reserves stood at $112.60 billion as of May 29. During the same week, foreign currency assets—the largest component of India's foreign exchange reserves—rose by $3.12 billion to $546.15 billion. The increase in foreign currency assets helped support the country's overall reserve position despite the decline in the reported value of gold holdings.

Fall in gold reserves

The fall in gold reserves was largely a reflection of valuation changes rather than any sale of the precious metal, the RBI clarified. Gold reserves are reported in US dollar terms and are revalued every week based on prevailing international market prices. Consequently, fluctuations in global gold prices and currency movements can significantly affect the reported value of reserves even when the quantity of gold held by the central bank remains unchanged.

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Addressing questions on the issue during the post-monetary policy press conference on Friday, Malhotra said there was no basis for reports suggesting that the RBI had sold gold.

"No. RBI has not sold gold. There has only been a marginal increase in our gold holdings," the governor said.

RBI denied Bloomberg reports

The clarification comes after a Bloomberg Economics analysis suggested that reserve data may indicate the sale of gold worth approximately $12 billion during the two-week period ending May 22, while foreign currency assets increased during the same period. The analysis led to speculation that the central bank could have used gold reserves to support the rupee or strengthen its foreign exchange position amid global market uncertainty.

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However, the RBI categorically denied the claim, stating that its physical stock of gold remains unchanged at 880.52 tonnes. The central bank emphasized 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 feature of reserve management.

The government's fact-checking arm, the Press Information Bureau (PIB), also dismissed reports of gold sales as "fake." Citing official RBI data, PIB highlighted that gold's share in India's foreign exchange reserves has steadily increased over the past several months. Gold accounted for 13.92% of total forex reserves at the end of September 2025, rose to 16.70% by March 31, 2026, and further increased to 16.85% as of May 22, 2026.

Gold reserve

The latest figures underscore the growing role of gold in India's reserve management strategy. Central banks worldwide have been increasing gold allocations in recent years as a hedge against geopolitical risks, inflation concerns and volatility in major currencies.

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According to the RBI's latest reserve management report, India held 880.52 metric tonnes of gold at the end of March 2026. The report also noted a rise in domestic storage of gold reserves, with around 77% of the country's gold now held within India compared with 66% six months earlier.

While the market value of India's gold reserves may fluctuate from week to week, the RBI has reiterated that the country's physical gold holdings remain stable and continue to form an increasingly important pillar of its foreign exchange reserves.

(With Informist inputs)

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