Gold is one of Portugal’s fastest growing exports

By INÊS LOPES – [email protected]

Portugal’s gold exports soared 147% in February and March, representing €133 million in sales outside the country, when compared to same period last year.

Data released by the Instituto Nacional de Estatísticas (INE), the national statistics institute, also revealed that the value of gold exports in those two months equated to more than a quarter of the total sales made last year.

The export of this precious metal has recorded considerable growth in the last four years, a phenomenon that can be explained by the financial crisis and rising gold prices.

Portugal has seen three-digit growth in its gold exports since 2008, when they were up 384%, in 2009 205%, in 2010 112% and in 2011 140%. In this four-year period, gold exports amounted to €513 million.

According to the INE, the export of gold has helped bolster Portugal’s commercial presence in the European Union, with Belgium being its main market, buying 61% of the total Portuguese gold exports in the first two months of the year.

Belgium is considered one of the main diamond exchange markets in the world, which may explain this investment in gold.

Apart from gold’s traditional uses for making jewellery and in technology (such as in the automotive industry and electronics), gold is now being purchased in the form of bars or coins, representing 34% of total demand, revealed a study by BPI bank.

Gold rush

In Portugal, scrap gold dealers seem to pop up like mushrooms overnight, a phenomenon that is explained by the price of gold rising when the economy is doing poorly, turning the precious metal into an attractive investment. In 2011, four gold buying stores opened in Portugal a day.

With the ongoing financial crisis taking its toll on families, many individuals are selling unused silver and gold jewellery, some of great historical value (see panel), as a quick way to make some easy money.

Although it is unknown how many scrap gold dealers are operating in Portugal, licences to be in business, issued by the Imprensa Nacional Casa da Moeda, the national mint, have increased by 56% in 2011 in comparison to the previous year.

It is estimated that there are around 400 such dealers in the country (in 2008 there were 10), with Valores and Ourinvest dominating the market with 200 and 150 stores respectively. According to Público newspaper, both franchise companies are planning to open a further 75 and 50 stores respectively in Portugal, an indication that gold represents an attractive investment in the current economic climate.

The proliferation of gold buying stores in Portugal has led the Parliament to request an analysis of the legislation governing such businesses.

Portugal melting away its history

People are being forced to sell their precious gold and silver, some of great historical value, to make ends meet in the face of the financial crisis.

Some of this jewellery, however, is described as “authentic pieces of history”, dating back to the 19th and early 20th centuries, which are being melted and recycled with little regard for its historical importance.

João Fernandes from Fénix Gold, a franchise company trading precious metals in Portugal, told Público newspaper: “We are seeing more and more people coming into our stores to trade in jewellery with significant artistic and historical value.

“But they are treated as any other gold item brought in for recycling. In the end, what matters are the purity of the metal and its weight.”