Swiss To Vote On Massive Gold-buying Plan

In a test of their sense of financial security, the Swiss are being asked to vote on a proposal to make the central bank hold a fifth of its reserves in gold within five years. The proposal is opposed by the government and financial leaders but aims to capitalize on a growing sense of caution among the Swiss about the perceived dangers and increasing volatility of financial markets. The experience of the 2008 global financial crisis, triggered in part by complex investments that brought down multiple banks and bankrupted states, is fresh in people's memories. "Initial market reaction to a yes vote would be a sharply higher price — a $50 dollar rise looks plausible," said Carsten Fritsch, commodity analyst at Commerzbank. [...] 1973, Switzerland was part of the Bretton Woods system of fixed exchange rates and the value of the Swiss franc was defined in grams of gold. A gold-buying binge could also hurt the Swiss economy by reducing the amount of money the central bank has to spend on keeping a lid on the strong Swiss franc.

Topics:  initial   carsten fritsch   commerzbank   switzerland   bretton woods   swiss   a   vote   gold-buying   sense   
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