Swiss Voters Reject Gold Referendum, voters appear to have rejected a referendum proposal that would have forced the country’s central bank to hold 20 per cent of its assets in gold, according to early vote projections.
Proposals for drastic curbs on immigration and for ending property tax breaks for wealthy foreigners also seem to have failed.
A report from Bloomberg said the measure was voted down by a margin to 78-22.
Proposed by the right-wing Swiss People’s Party out of concern that the Swiss National Bank has already sold too much gold, the measure would have compelled the SNB to boost its gold reserves to 20 percent from around 8 percent currently. Switzerland already holds the most gold per capita in the world.
This would have severely complicated policy at a time when the central bank is trying to defend a 1.20 euro cap on the Swiss franc imposed at the height of the euro crisis.
Earlier this month, gold futures went on a wild ride after polling data showed an advantage in favor of votes against measure. Previous polls had shown about an even split among voters.
Swiss were also set to reject a separate initiative that aimed to cut annual immigration by three-quarters from current levels in order to reduce the strain on Switzerland’s natural environment, and a third referendum aimed at scrapping a tax perk for wealthy foreigners was also set to be defeated.
Over the last several months, the price of gold has been declining sharply, with the precious metal currently near mu tli-year lows.
On Sunday morning, gold futures weren’t trading, but futures settled at around $1,165 an ounce on Friday, their lowest since hitting around $1,150 earlier this month, which was gold’s lowest level since 2010.
Rejection of the measure, while not a huge surprise, likely comes as a relief both to Swiss and European monetary policy makers, who are currently facing a lack of inflation, poor economic growth, and record-low bond yields on the continent.
This week, the European Central Bank will meet, and many in the market will be focused on any clues about whether or not the central bank will launch a full quantitative easing program similar to those undertaken by Japan and the US to help boost the European economy.