Survey: Switzerland Looks To Vote On Future Of Gold
Switzerland is set to vote on whether to substantially boost its gold reserves at the end of the month. Investors and analysts are waiting with bated breath to see if the next gold run is around the corner.
On November 30, Switzerland will head to the polls to vote on whether the Swiss National Bank should be forced to rebuild its stockpiles of gold. Analysts believe a "yes" vote could provide support for the currently shaky gold price. The proposal comes from "Save Our Swiss Gold," a group that would like to see the central bank build up its gold position to at least 20 percent — from a current 8 percent — of total assets. With gold closing Friday at $1,177.81 per ounce and down 13.32 percent for the year, a victory for the "yes" side could cause prices to skyrocket. The push for "yes" The movement has found traction within the conservative Swiss People's Party, with current Swiss Federal Assembly members Lukas Reimann and Luzi Stamm turning out for the "yes" side. They're intrigued by the fact that if the proposal goes through, the tiny country will rise to third place in global gold holdings. Switzerland currently holds just over 1,000 tons of gold, making it the seventh-largest holder of gold in the world. However, it will take a lot of work to get there. If the initiative is passed, the bank will have to buy up to 1,800 tons of new gold at prices that have quadrupled since 2000. It will also have to repatriate about 30 percent of the gold it has sold, which is currently held abroad in the United Kingdom and Canada. Finally, the bank will be forbidden from selling gold ever again. That said, the impact for investors could be huge. In an interview with Bloomberg, Joni Teeves, an analyst with UBS (NYSE: UBS), said a "yes" vote could create waves in the current marketplace. "It would have a major impact if it passes. If they do launch a buying program, it would have effectively a constant bid in the market," said Teeves.