A sharp rally of over 20% in gold prices to date this month has led to a surge of about $5 billion (over Rs twenty two, 000 crore) in the value of gold held by RBI, which acts like a custodian of the yellow metal for the government of India.
The central bank keeps the yellow metal within the country's international reserves portfolio, where it had gold worth Rs 1, 11, 940 crore ($25. 35 billion) at the conclusion of last month.
The gold prices in domestic market has appreciated through 20. 4% since the beginning of this month to hit a record a lot of Rs 28, 230 per 10 grams.
The prices have also appreciated sharply by over 16% within the international market from $1, 616 per ounce to $1, 880 currently.
Considering a price rise of 20%, the value of gold held by RBI offers appreciated by over Rs 22, 000 crore or about $5 billion dollar to date in August.
The experts are anticipating further rise and believe that the gold prices may touch Rs 30, 000 level well before Diwali as investors are increasingly shifting funds to gold amid a totally free fall in equity markets.
Gold has traditionally been a preferred high-value buy for Indians, but mostly for jewellery purposes and as a means of preserving the household wealth. However, the trend is also picking up for gold as the pure investment play.
RBI has also been increasing its exposure to gold in its international reserve portfolio previously few years.
RBI's gold holding had seen a significant increase of regarding $7 billion after it purchased 200 metric tonne of gold from IMF upon November 3, 2009.
Before this purchase, gold accounted for only about 3% associated with RBI's total international reserves, but it has now increased to nearly 8%.
The central bank happens to be estimated to hold a total of 557. 75 tonne of gold.
According to RBI data, its gold reserves have grown by Rs 22, 376 crore ($6 billion) in the last one year, while it has gone up by Rs 11, 254 crore ($2. 9 billion) so far in the present calendar year 2011.
RBI figures among 10 largest central banks across the world when it comes to gold holding in foreign reserves portfolio.