Following reports of India selling $12 billion gold reserves in order to safeguard the country’s forex and rupee, there have been clarifications from the Reserve Bank of India (RBI) and the Government of India stating that such claims are “fake” and “incorrect”.
Reports about the sale of India’s gold reserves have become very popular since the current scenario is witnessing some major global financial market fluctuations due to geopolitical uncertainties, increased energy prices, and the pressure on emerging currencies.
RBI Clarifies That Gold Reserves Have Not Reduced
In response to reports that India has reduced its gold reserves, the RBI has clarified that there was no reduction in their physical gold reserves and the total quantity of gold remained the same at 880.52 tonnes as of June 3, 2026.
The RBI further stated in its press release that it publishes monthly data for gold reserves of India in the Monthly Bulletins. It advised everyone to use the official data published by the RBI as opposed to any speculations in the media.
It should be noted that this explanation was provided to dispel fears that India could be forced to sell off some of its gold reserves in order to support the rupee or increase its foreign currency assets.
Origins of the Controversy
The origin of the controversy is an analysis which indicates that during the last two weeks before May 22, the RBI could have sold around $12 billion worth of gold reserves while buying around $7.5 billion of foreign currency assets.
The above-mentioned conclusion is based on the analysis of publicly available data on reserves, which indicates a decrease in the value of gold reserves for the stated period. This was interpreted by some analysts as selling, considering that at that time the Indian rupee was under threat due to global economic uncertainties and higher crude oil prices.
It should be emphasized that any changes in the value of the gold reserves of the RBI do not always indicate their sale.
Fact Check Agency Declares Reports “Fake”
In response to the widespread rumors on social media, the government’s fact check agency under the PIB took immediate action. According to the PIB, the information presented in the reports was “fake” since government statistics revealed that gold has become an increasingly large component in India’s forex reserves within the last few months.
As per government figures, gold was responsible for 13.92% of India’s foreign exchange reserves up until the end of September 2025. However, its share increased to 16.70% in March 2026 and even higher to 16.85% by May 22, 2026.
If the RBI was really engaged in selling off its gold reserves, then the share of gold in the total reserve portfolio would probably have decreased rather than increased, explained the officials.
Pressure on India’s Foreign Exchange Reserves
Although the RBI denied selling any gold, the foreign exchange reserves of India have been falling in recent weeks. Statistics published by the central bank indicated that the country’s forex reserves amounted to approximately $681.4 billion as of May 22, compared to around $688.89 billion recorded during the previous week.
This decrease was due to:
Decrease in the value of gold reserves.
Foreign currency reserves have declined.
Market volatility.
Intervention of central banks in support of the Indian rupee.
The Indian rupee has reached a historic low versus the United States dollar but has bounced back with RBI intervention in the foreign exchange market.
The Importance of Gold for Reserve Management in India
Gold is of critical importance to India’s reserve management approach. Contrary to foreign currency assets, gold offers protection against risks such as inflation, currency devaluation, and political instability.
In recent years, the world has witnessed central banks purchasing gold to reduce risk by reducing exposure to too much of one particular currency. In India, this practice is not new, and gold reserves in the country have grown steadily over the years.
The RBI owns in excess of 880 metric tons of gold, ranking among the top owners of official gold reserves. The bulk of this has been held at home over the years, indicating a robust reserve management strategy.
Effect on the Market and Investor Confidence
RBI’s clarification is likely to restore investor confidence and stability in the country’s financial markets. Rumors surrounding the massive sale of gold by India have been associated with speculation concerning the health of India’s external sector and possible extreme measures related to management of India’s reserves.
Having clarified that physical gold reserves have remained intact, RBI has bolstered confidence regarding India’s reserve position and policies.
According to financial professionals, any changes in reserve valuation are typical and do not necessarily reflect the actual buying or selling of reserves. This example demonstrates the significance of paying attention only to verified information when analyzing events taking place in the economy.
Conclusion
It has now been officially denied by both RBI and the Government of India that RBI has sold $12 billion worth of gold to ensure foreign exchange reserves of the nation. Statistics show that the physical gold reserves of India have not changed and are estimated to be 880.52 tonnes, while the portion of gold in forex reserves has risen within recent months.
Despite some reduction of forex reserves amidst turbulence in global financial markets, there have been no reports of liquidation of gold reserves by RBI.
