Value of gold in the government's kitty has grown by over Rs 1,00,000 crore in about two years, helped by a sharp rally in the bullion price and a 200-tonne purchase from IMF in November 2009.
The appreciation in the gold bought from the IMF (International Monetary Fund) itself is about Rs 30,000 crore, as the prices have nearly doubled from near Rs 15,000-per ten gram level at the time of the purchase.
The total gold holding with the Reserve Bank, which keeps the precious metal as part of its forex reserves on behalf of the government, is currently estimated at 557.7 tonnes.
The value of gold held by the central bank, just before its 200-tonne purchase from IMF on November 3, 2009, stood at about Rs 50,718 ($10.8 billion), as per the RBI data.
Based on the current price of about Rs 29,000 per ten gram in the domestic market, the total value of the gold held by the RBI, at present, stands at about Rs 1,60,000 crore.
However, the latest data available with the RBI puts the central bank's total gold holding at Rs 1,31,442 crore ($26.9 billion) as on November 11, 2011.
An RBI working paper last month said that the central bank should go for more purchase of the precious metal.
"India's purchase of gold as a diversification strategy is fully justified and is in line with the global trend and still there is scope to increase its holding," the paper had said, while noting that the country's physical gold holding has remained static since the purchase from IMF in 2009.
As per the latest data available with the World Gold Council (WGC), India's total gold holding of 557.7 tonnes is the 10th largest for any country in the world, but it accounts for only 9% of its total forex reserves.
In comparison, the gold holding of the US -- the biggest in the world at 8,133.5 tonnes -- accounts for as much as 75.5 per cent of its total reserves.
The gold price is currently ruling just over Rs 29,000 per ten gram level in the national capital, while the prices were near Rs 28,600 level in Mumbai on Friday last.
In the international market, gold is currently ruling near $1,720 per ounce level (equivalent to over Rs 30,000 per ten gram at the current rupee value). It scaled a record high of $1,921 in the first week of September 2011.
The prices in the domestic market hit an all-time high of Rs 29,440 per ten gram earlier this month.
The WGC said last week that the global gold demand rose by six per cent in the July-September quarter, as investors rushed to accumulate the precious metal to hedge their risks from falling equity and other commodity markets, thus pushing the prices to record high levels.
The gold prices have, however, fallen in the past few days in the domestic as well as international markets as demand has weakened and profit has been booked due to recent rally.
Still, the experts have been optimistic about a robust rally in the gold prices going ahead amid surging investor demand, especially in the wake of investment classes such as equities and other commodities facing significant downward risks due to economic turbulence in Europe.