Higher Gold price vindicates Indian Central Bank’s investment plan

London (Nov 12)  Gold purchase plan of Reserve Bank of India seems to be paying off as the monthly valuation gains have touched an eight month high with investor demand for a safe haven rallying the yellow metal.

 The value of Gold in the country’s foreign exchange reserves rose 1.7 per cent in three weeks from October 12 to November 2 at $20.9 billion. Gold prices rose 2 per cent during the same period.

 India’s reserves are at $393 billion and Gold comprises about 5 per cent of the total reserves.

 According to the central bank, Gold, including the Gold deposits placed abroad, is revalued on the last business day of the month at 90 per cent of the average of the Gold price quoted daily by London Bullion Market Association for the month.

 Central banks across the globe, including RBI, have added a net 193.3 tonnes to their stock of Gold reserves in the first six months of 2018, up 8 per cent from the same period a year ago, according to a recent report by the World Gold Council.

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