A rather popular initiative by the Swiss Peoples Party, or SVP, has gained traction in Switzerland, and the country is now getting ready to hold a referendum on whether its central bank can sell gold reserves.
The “Save our Swiss Gold” measure also seeks to force the Swiss National Bank (SNB) to keep at least 20% of its assets in the metal, repatriate gold reserves held abroad and keep them at home.
The news comes one week after reports that Cyprus could sell 10 tons of its central bank gold reserves to help fund its bailout. While the amount is not big enough to have a material impact of the balance of the global gold market, the news contributed to gold's record-breaking tumble to two-year lows this week.
Referendum advocates say the SNB’s gold reserves, which reached almost 50 billion Swiss francs ($54bn) at the end of February and account for 10% of its total assess, are the best store of value available to the central bank.
The value of the SNB’s current reserves has contributed considerably to its annual earnings, particularly given the metal's gains in the face of the ongoing euro-zone debt crisis.