The Reserve Bank of India (RBI) continues to buy gold. In the last two or three years there has been a constant increase in the RBI's gold reserves. P Somasundaram, India MD at the World Gold Council, was in conversation with CNBC-TV18 to discuss central banks' gold buying.
Somasundaram said: “Central banks continue to be net buyers, even RBI has added to the reserves in April. So our reserves since the time we stated buying have grown by nearly 100 tonne.”
He added, “When it comes to central banks they are just not looking at returns alone, safety is most important; liquidity and then comes obviously the returns so they will obviously be very cautious.
"We have seen that this is not a short-term reaction, central banks have probably foreseen from what we are seeing today, and have been buyers in the last two years and they have brought actually highest in the last two years and they continue to do so.”
On retail demand for gold, he said: “The prices are very volatile right now and that is definitely not something which will help in retail demand. When the prices are volatile they tend to normally stay away from the market.”