Italian gold reserves third highest in the world

The current Labour Government must be cursing the day that then Chancellor of the Exchequer, Gordon Brown decided to sell half of Britain’s gold reserves.

At that time he managed to sell it at €233 per ounce and now it stands at more than €3,600 per ounce.

It is well known that in times of crisis, many individual and corporate investors turn to gold as a relatively safe area to hold funds but it is not so well-known that certain governments also see gold as a safe haven.

Italian gold reserves third highest in the world after Germany and USA

Indeed, Poland has made it clear that it will be buying as much gold as it can in order to increase its reserves and perhaps more surprising, Italy has the third larges gold reserves in the world.

Naturally, it you are gold producing country such as the USA, it makes sense to sell a proportion but also to keep some back as a hedge against the future.

Some governments take the view that if you are facing a financial crisis then it is sensible to sell gold to prop up the economy, but Italy has taken a different view, coloured by what happened to its reserves during the Second World War when the Nazi’s seized so much Italian gold that by 1945 its reserves had dropped to just 20 tons.

Three quarters of the ‘stolen’ gold was eventually returned to Italy and as its economy started to pick up, so a percentage of foreign earnings was converted to gold.

The Bank of Italy now sits on the world’s third-largest national gold stockpile, behind only the U.S. and Germany.

Italian gold reserves third highest in the world and worth €257 billion

According to Reuters reserves had reached 2,452 tons of gold by 2024 which is worth an estimated €257 billion at current prices equivalent to around 13 per cent of 2024 national output.

Rather than float questionable bonds with relatively high interest rates, the Italian Government has in the past used its gold as a guarantee against international loans which have been repaid over the years, leaving the reserves untouched.

With a huge gold jewellery industry earning even more foreign currency, Italy is able to boast that gold accounts for nearly 75 per cent of its official reserves compared to the eurozone average of 66.5 per cent.

Although much of Italy’s gold is kept in what is known as the ‘sacristy’ in Rome, other deposits are held in Britain, Switzerland and the USA.

Having so much gold in a market which sees the price increase regularly is a bonus, but it should not be forgotten that Italy’s public debt now exceeds €3 trillion (more than 137 per cent of GDP) so it may well be forced by the EU to raise funds to reduce the debt by selling some of its gold