GOLD, danger zone in the next couple of days!
There are just 2 days left until the “Save Our Swiss Gold” referendum this Sunday. On November 30, voters in Switzerland will head to the polls to decide whether the Swiss National Bank (SNB) should back the Swiss franc with gold by increasing its gold holdings to 20% – up from current levels of 7%. How the SNB came to the ‘only’ 7% of gold reserves?
In a referendum in 1999., Swiss leaders managed to convince the voters to remove the relevant constitutional article from 1971. that required the Swiss franc to be backed by 40% gold. After 15 years, Swiss National Bank (SNB) hold only 7% in gold reserves. Why the Initiative “Save Our Swiss Gold” want that gold back in the SNB reserves?
From 2000. until 2007., the Swiss National Bank sold aprox. 1500 tons of gold reserves and made the Swiss cantons happy and delivered some billions of francs to prop up their finances unfortunately, mostly due to gold price improvements and gold sales at quite cheap prices. Average price of that selling was 16.241 chf/kg. Buy the end of the 2012. price of gold was increase to 48.815 chf/kg. Opportunity loss, aprox 48 billion chf. What next?
I think the votes will be very close and the previous polls don’t show us the real picture. So, there is equal opportunity for yes and no. Referendum is not the end of the deal, but for sure could make a huge moves on the gold price at the market. My advice is that you don’t trade in the next couple of days. Ich technical level could be broken with no problem, up or down. There is no point for analysing and trading until the end of the ‘game’. Big boys are on the move!