Switzerland’s proposed referendum to force the Swiss National Bank (SNB) to more than double its gold reserves was rejected by voters on November 30 with a majority vote of about 77%.
Had the “Save Our Swiss Gold” referendum passed, the SNB would have been required to increase its gold reserves from about 8% of total assets to 20% by 2019 and repatriate at least 30% of Swiss gold being held overseas. The referendum would have also barred the SNB from selling any more gold.
If you take a look back at the gold prices, you can see a sharp dip the day after the vote. But the bearishness soon wore off as the week progressed – as most analysts had predicted.
Since the referendum was predicted to fail, the effect on the markets was not as substantial as it could have been. Even though no one is surprised at the result, the SNB and other policy makers are no doubt relieved that vast majority of Swiss citizens stand behind the SNB’s current monetary policies. As such, the status of Switzerland’s gold reserves is not likely to be challenged again anytime soon.