Italy, whose sovereign assets have often been the cause of crises, is currently enjoying unexpected stability, as the vast gold reserves of the Italian central bank reach record high prices, Reuters writes in an analysis on the subject, BTA reports.
Italy's gold reserves are the result of decades of decisive action to create a safety buffer after the country rebuilt its reserves looted by the Nazis in the 1940s, and of refraining from selling, even during recurring crises and rising public debt.
The central bank of Italy has the third-largest national gold reserves in the world, after those of the United States and Germany. Its 2,452 tonnes of gold are worth about $300 billion at current prices, representing roughly 13 percent of the country’s economic output in 2024, according to Reuters calculations.
Italy’s love affair with gold dates back millennia, with the Etruscans mastering the technique of fusing gold beads long before ancient Rome. Under Emperor Julius Caesar, the gold aureus coin became the monetary pillar of the Roman Empire, and centuries later the florin became as influential in medieval Europe as the dollar is today.
In more recent times, Italy’s gold policy has been shaped by its experience during World War II, when Nazi forces, aided by Italy’s fascist regime, confiscated 120 tonnes of its reserves. By the end of the war, Italy's gold reserves had dwindled to around 20 tons.
During the post-war "economic miracle", Italy became an export-driven economy and saw an increase in the inflow of foreign currency, particularly US dollars. Some of them, according to the website of the Italian Central Bank, were converted into gold.
By 1960, Italy's reserves had increased to 1,400 tons, including three-quarters of the confiscated gold bars that it managed to recover in 1958.
The oil crises of the 1970s led to additional global uncertainty, which for Italy meant social unrest and frequent changes of government, considered risky by investors.
"Extreme monetary instability led Western central banks to buy gold, which is the ultimate symbol of financial stability," explains Stefano Caselli, dean of the SDA Bocconi Business School in Milan.
To compensate for the budget holes left by the capital flight, Rome used 41,300 bars of its gold reserves as collateral for a loan of $2 billion from the German "Bundesbank" in 1976.
Unlike Britain or Spain, however, Italy refused to sell its gold during financial crises, retaining its reserves even during the 2008 debt crisis.
"Gold is like the family silver, like a grandfather's precious watch, it is the last resort in times of crisis, in any crisis that undermines international confidence in the country," writes Salvatore Rossi, former deputy governor of the Bank of Italy, in his 2018 book Oro (Gold).
Central banks around the world are now once again accumulating gold reserves amid a changing world order.
The Bank of Italy currently holds around 871,713 gold coins weighing around 4.1 tonnes in its vaults, called "sacristia". The term is used for a room in a Christian temple where sacred objects are kept.
According to the World Gold Council, at the end of last year, gold made up almost 75 percent of Italy's official reserves, while in the eurozone the share of the precious metal was only 66.5 percent.
Around 1,100 tons are stored in the vault under the headquarters of the Bank of Italy in Palazzo Koch, not far from the Colosseum. A similar amount of Italian gold is stored in the United States, and smaller volumes in Britain and Switzerland.
Italy also remains one of the largest exporters of gold jewelry in the world, with production concentrated in Alessandria, Arezzo and Vicenza. Luxury Italian brands such as "Bulgari", "Buccellati" and "Damiani" (Damiani) are world-renowned.
Calls to sell gold to reduce Italy's public debt, which currently exceeds 3 trillion euros ($3.49 trillion) and is expected to reach 137.4 percent of GDP next year, continue to emerge, but are still being rejected.
"Selling even half of Italy's gold reserves will not solve Italy's debt problem," said Giacomo Chiorino, head of market analysis at "Banca Patrimoni Sella & C.".