Center back Mustafi joined Valencia on a five-year deal from Sampdoria in August last year.
Mustafi made 36 appearances in all competitions in his first season at the Mestalla as Valencia finished fourth in La Liga, earning a place in the UEFA Champions League.
Despite the apparent interest from the two biggest clubs in Spain, his representative Ali Bulut intimated that a move is not in the pipeline.
"There has been an inquiry from Real Madrid," Bulut told Bild. "But there have not been any further talks. Barca talked about a transfer in the winter, but Mustafi has a good contract at Valencia.Credit: Nicholas McGee/Goal
"It is a great club and he will play in the Champions League. If he is to move, everything must be perfect."
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