The repatriation of India’s gold reserves is not merely a logistical adjustment but a fundamental restructuring of national financial security. Historically, central banks stored gold in London and New York to leverage deep bullion markets, settlement efficiency, and institutional trust in custodians like the Bank of England. However, recent geopolitical events have reshaped this logic. The freezing of Afghanistan’s reserves by Western powers following the invasion of Ukraine, alongside ongoing conflicts involving the United States, Israel, and Iran, has introduced a palpable risk: assets held abroad may not be immune to political decisions.

The RBI’s Half-Yearly Report on Management of Foreign Exchange Reserves highlights the speed of this transition. In March 2023, only 37% of India’s gold was stored domestically. By the end of March 2026, that figure had risen to 77%. This means roughly 680 tonnes now sit inside Indian vaults, while approximately 197.67 tonnes remain with the Bank of England and the Bank for International Settlements. An additional 2.8 tonnes are held as deposits.

This shift is part of a larger rebalancing of India’s foreign exchange reserves, which have declined to $691.1 billion but now see gold comprising about 16.7% of the total mix, up from 13.9% just months earlier. The strategy is not an abrupt break but a steady recalibration: retaining a portion abroad for liquidity while shifting the bulk home to ensure immediate access during economic uncertainty. As noted in recent analysis, "Gold under one's own thumb also means ready liquidity which is of great importance in case of global economic crises."

Expert Insights and Analysis

Market experts emphasize that this move represents a change in philosophy regarding asset ownership. Ritesh Jain of Pinetree Macro stated, “In a world where the global monetary system is breaking down, I firmly believe that if gold is not in your possession, then it is not your gold.” This sentiment underscores the view that India is treating gold less as a balance sheet asset and more as strategic insurance.

The historical dominance of London and New York remains significant. Krishan Gopaul of the World Gold Council noted that central banks historically held gold close to where they transact for speed and liquidity. However, the post-2022 world has complicated this logic. The precedent set by G7 countries restricting access to sovereign assets during geopolitical conflicts has forced a re-evaluation of custody risks.

In the broader market context, Kitco News provides technical insights into how these macro shifts are playing out in price action. Analysts note that silver is acting strong as it passes through resistance, while gold charts show positive momentum with a higher low seemingly formed. Conversely, Bitcoin faces renewed bearish pressures amid divergences and USD turmoil, suggesting a flight to safety within the precious metals sector.