Gold investors should be watching the outcome of the upcoming Swiss referendum very closely.
Set to take place on the 30th November the Swiss will vote whether or not they should increase their country’s gold reserves from 8% to 20% over the next 5 years.
Due to a stronger dollar and what appears to be overheated stock prices the gold price has been continuing to slip over the past couple of weeks.
If they vote “yes” the Swiss could soon be buying up to 300 tons of gold each year for 5 years, the purchasing power of the Swiss could soon underpin the price of gold. The campaigners also ask to pass new laws preventing the government from selling their gold reserves under any circumstances and should be held within the country’s own vaults.
“It could provide a hell of a lift to the gold price over the net few years – it will very much underpin it,” he said. “Perhaps the Swiss people know better than other Europeans that gold is something that custodians of the reserve assets should have more of.” Chief executive of Sharps Pixley.
The Swiss national bank sold about 60 percent of Switzerland’s gold reserves during the 2000s and currently holds the majority of their reserves in Euros.
If they are to vote “yes” they will be joining the likes of Russia and China who have been rushing to fill their vaults over the last year.
The (latest) poll showed 38 percent of respondents were in favour of the initiative, down from support of 45 percent in a poll in the paper last week. Some 47 percent of those in the survey opposed the proposals, while 15 percent remained undecided, this is however likely to change as the”yes” and “no” campaigns run over the coming month.