China Hong Kong UK Germany Tokyo


Investors Information

Gold Prices Gain Despite Volatility From Swiss Vote

Press Release Date: December 02, 2014

A great many pundits took heavily opposed views on gold’s price reaction to the canton referendum held in Switzerland that would have forced that country to more than double its gold reserves.

Following on from what has been hyped by many as the true test of gold’s potential for gains at the close of 2014, the market for the precious metal displayed a great degree of volatility, as the result of the Swiss gold referendum of November 30th . The referendum saw returns of 78% voting against further expansion of the country’s central bank gold reserves and up to 20% of its total assets from the 7% it currently holds. Despite heavy campaigning on the issue by the “Save Our Swiss Gold” organization, even early polls showed little chance of seeing Switzerland return towards a gold standard, something the country abandoned in 1999.

With todays lower stock values, the downgrading of Japan’s credit rating and slowing of economic growth in China helping to make the case for gold a more appealing one, despite the Swiss vote, prices ended up ahead. . Though recent increases in the health of the US dollar may prove to be an ongoing impediment for gold bulls, delays to interest rate hikes by the Federal Reserve and investor uncertainty in Europe should more than balance this situation out.

Overall, gold’s performance is still being taken from a bearish standpoint, though increasingly, the metals more bullish backers are showing renewed signs of life. Many analysts point to the metal’s swing price of $1208 per ounce being a pivotal juncture, at which any additional rises could attract new buyers looking to take up long positions. Even at a $1200 median price, many short sell positions are being left exposed to what is a traditionally active period for buyers of physical product.

“The Swiss referendum on whether or not the central bank should be forced to nearly triple its gold reserves was more of a media hyped story than anything that would ultimately affect prices. Even with the defeat of this bill, we are seeing bulk buying by a number of central banks. Russia’s being a prime example of exceptionally large volumes. These large scale trades have been an ongoing phenomenon for the last twelve months and like the desperate scramble to restock by ETPs and hedge funds receiving little scrutiny aside from serious investors” noted Mr. Han Liu Wei CEO of ARUN Minerals.

Go Back to Archives