Italy, whose sovereign assets from bonds to banks have so often been the subject of market crises in recent years, is currently enjoying a windfall as the central bank’s vast gold reserves track record-high prices.

The country’s bullion stockpile reflects decades of determined safeguarding after it rebuilt reserves plundered by the Nazis in the 1940s, and a stance that has seen it resist calls to sell through repeated crises and as its national debt soared.

The Bank of Italy now sits on the world’s third-largest national gold stockpile, behind only the US and Germany. Its 2,452 metric tons of gold are worth an estimated $300 billion at current prices, roughly 13% of 2024 national output, Reuters calculations show.

Italy’s love affair with bullion goes back millennia, with the Etruscans mastering the technique of fusing gold beads well before ancient Rome. Under Julius Caesar, the aureus gold coin became the monetary cornerstone of the Roman Empire, and centuries later, the fiorino became as influential in medieval Europe as the dollar is today.

The country’s more recent gold policy was shaped by its wartime experience, when Nazi forces aided by Italy’s own fascist regime seized 120 tons of its reserves. By the war’s end, these had dwindled to around 20 tons.

During its post-war “economic miracle”, Italy became an export-driven economy and saw a surge in foreign currency inflows, notably US dollars. Some of these, according to the Bank of Italy’s website, were converted into gold. Its holdings had climbed to 1,400 tons by 1960, including three-quarters of the seized bullion which it was able to recover in 1958.

The oil shocks of the 1970s ushered in further global uncertainty, which in Italy meant social unrest and frequent government changes seen as risky by investors. “The extreme monetary instability led the central banks of Western countries to buy gold, the ultimate symbol of financial solidity,” Stefano Caselli, dean of the SDA Bocconi School of Management in Milan, told Reuters.

To offset budget holes left by capital flight, Rome used 41,300 ingots from its gold reserves as collateral for a $2 billion loan from Germany’s Bundesbank in 1976. But unlike Britain or Spain, Italy has refused to sell off gold during financial downturns, retaining its reserves even through the 2008 debt crisis.

“Gold is like the family silverware, it’s like grandpa’s precious watch, it’s the last resort in times of crisis, any crisis that undermines international confidence in the country,” Salvatore Rossi, former deputy governor of the Bank of Italy, wrote in his 2018 book ‘Oro’ (Gold).

With gold still viewed as a safeguard of last resort by many Western nations, central banks worldwide are again stockpiling amid a reshaping of the global order. “That historical decision of the Bank of Italy feels strikingly modern,” said Caselli. “Because we are back there again.”

The Bank of Italy currently holds approximately 871,713 gold coins weighing some 4.1 tons in its vaults, dubbed the ‘sacristy’ after the room in a church where sacred items are kept. Gold accounted for nearly 75% of Italy’s official reserves at the end of last year, a significantly higher ratio than the 66.5% of the euro zone, according to World Gold Council data.

Around 1,100 tons are stored in the vault beneath the Bank of Italy’s headquarters at Palazzo Koch, a short walk from the Colosseum. A similar portion is held in the US, while smaller amounts are kept in Britain and Switzerland. Italy also remains one of the world’s top exporters of gold jewellery, with production concentrated in Alessandria, Arezzo, and Vicenza. Luxury brands like Bulgari, Buccellati and Damiani enjoy global acclaim.

Calls to sell gold to reduce Italy’s public debt, now over 3 trillion euros ($3.49 trillion) and seen at 137.4% of GDP next year, continue to surface but have not yet succeeded. “Selling even half of the gold holding would not solve Italy’s debt problem anyway,” said Giacomo Chiorino, head of market analysis at Banca Patrimoni Sella & C.

Some argue that selling ingots could unlock funding for essential public services to benefit citizens instead of sitting idly in vaults.
Nonetheless, the Bank of Italy shows no intention of selling. It had no comment on its gold policy for this article.

“At a time when the world is being redrawn, market prices have reached unprecedented multiples and (digital assets such as) stablecoins and cryptocurrency are gaining ground, central banks currently hold the hottest asset,” Bocconi’s Caselli said. “They are right not to sell.”