Portugal’s Gold Reserves Surge Amid Global instability
Portugal’s gold reserves have reached their highest valuation in 25 years, demonstrating a important increase in value despite a period marked by geopolitical and economic instability. As of Friday, the reserves were valued at €37.6 billion, a more than 570% increase from the €5.6 billion valuation at the start of the century.
A ample portion of this growth occurred during the five-year mandate of Mario Centeno, witnessing an over 80% rise in the value of the reserves. This year alone, the reserves have increased in value by approximately €7 billion, moving from €31 billion at the end of 2023.
While current reserves stand at 383 tons, Portugal previously held a larger reserve of over 600 tons in the year 2000. Between 2002 and 2006, under the leadership of Vítor Constâncio, the Banco de portugal (BDP) sold approximately 225 tons of gold, after which the reserve remained relatively stable.
Currently,half of Portugal’s gold is stored within the Banco de Portugal’s vaults,while the other half is held at the Bank of England. In 2024, Portugal ranked as the sixth-largest gold reserve holder in Western Europe, following Germany, Italy, and France.
The BDP generates revenue from the gold held in England through metal loan agreements. this allows investors to include gold in their portfolios while the physical gold remains securely stored within the BDP’s custody.
Recent weeks have seen gold prices reach historic highs, driven by factors including a weaker dollar, central bank purchases, low interest rates, and ongoing geopolitical and economic uncertainty. the actions of Donald Trump, particularly his criticism of the US Federal Reserve, are also contributing to the upward pressure on gold prices, as it’s perceived as an attempt to influence interest rate cuts.
analysts, such as Adrian Ash of BullionVault, attribute the recent climb to Trump’s impact on geopolitics and international commerce. while China and India are typically the largest consumers of gold, demand in these countries has recently decreased due to the high prices.
Experts predict continued growth in gold prices in the coming quarters. Joni Teves of UBS suggests that a combination of low interest rates, weakening economic data, and persistent geopolitical risks will further enhance gold’s appeal as a portfolio diversifier.
Ricardo Evangelista of ActivTrades highlights the ongoing conflicts in Ukraine and Gaza as contributing to the demand for safe-haven assets like gold. Ross Norman, another analyst, emphasizes that upcoming legal challenges regarding tariffs in the Supreme Court will further test Trump’s influence and provide a safety net for investors through gold.
Lower interest rates are also expected to stimulate economic activity in the US and weaken the dollar, further bolstering gold’s value.
