Why China and India are Buying Gold
Gold is a precious metal and it’s no longer just a symbol of wealth. Gold has become a strategic tools in ranking in the global economy. Central banks around the world, led by Asian countries like China and India, are aggressively expanding their gold reserves in 2025, to robust their economic security and reflecting a shift in how nations perceive financial resilience.
Gold Protects Economies in Uncertain Times
The sudden surge in gold purchases by these two countries is not merely about hedging against inflation but to reduce dependency on the strongest currencies in the world, especially the US dollar. Central banks of India and China are increasingly using gold to reduce the dependence on volatile currencies. China added nearly 40 tonnes to its reserves in the first nine months of 2025, bringing its total to 2,298.5 tonnes.
India is also following a similar path as China. The Reserve Bank of India (RBI) now holds 880 tonnes of gold, up about 58% compared to a decade ago. About 512 tonnes of gold are stored domestically in India, and the rest is kept abroad showing India’s intent to maintain a balanced approach between accessibility and strategic security. Clearly, this accumulation of high-value assets is a deliberate effort to diversify and shield the growing economy from geopolitical tensions. India and China are already facing sanctions from the United States, by holding substantial gold these countries are less exposed to international sanctions or external financial pressures, making it a reliable store of value.
Gold Buying Trend Beyond Asia
This global gold trend is not limited to Asia. Russia, Turkey, and other emerging economies have also increased their gold purchases, collectively adding over 1,000 tonnes annually since 2022. Analysts suggest that central banks see gold as a cornerstone of economic resilience, especially as recent global markets face unpredictable challenges from tariffs, war conflicts, trade tensions, and fluctuating interest rates.
It also sends a signal that resilience in the 21st century requires more than currency holdings or fiscal policies. For China, gold purchases complement efforts to maintain the global stature of the yuan. For India, rising gold reserves are part of a broader push to align with global best practices in financial security and strengthening national economic strategy. In this context, gold is no longer just a commodity, countries that strategically balance reserves of these precious metals, diversify assets, and hedge against uncertainty are better positioned to navigate shocks and maintain long-term stability against the uncertainties of a rapidly changing world.
