While here in the U.S., gold continued to slip on news that the housing market has reached 6-year highs and the continuing growth of the dollar, the main topic on gold investors’ minds and tongue this week was Switzerland.
Last year, the far right Swiss People’s Party launched a campaign to force the Swiss National Bank into bolstering their gold reserves in big way (from 7% to 20%), in a landmark referendum that could have major implications for the global gold market. Well this week, the head-to-head gold referendum battle that will take place in Switzerland over the next five weeks finally began, marking the start one of the biggest rulings on gold in recent times.
Said the WSJ’s MoneyBeat:
To reach the 20% target, ‘the SNB would have to buy around 10% of global annual production during five years in order comply with the initiative by 2019.’ This would be equal to around 1500 tons of gold in total. It doesn’t take a genius to figure out this could turbo-charge the price of gold, particularly in the immediate aftermath of a shock ‘yes’ vote.
Likewise, Reuters commented:
To get to 20 percent, the SNB would have to go on a buying spree that could push gold prices significantly higher.
Furthermore, a recent survey by the biggest newspaper daily in Switzerland has some analysts actually believing this referendum will actually pass – unlike the recent failed Scottish referendum.
According to Forbes:
[A fund manager at Liechtenstein-based Incrementum AG] added that the gold initiative is doing its job as more people throughout the country are discussing the role of the central bank and the state of Switzerland’s economy.
You’ll want to keep your eyes open for the latest news on the Swiss gold referendum is the coming weeks.