Switzerland votes against gold reserves expansion

Around 78 per cent Swiss voters today voted against an expansion of central bank's gold reserves to 20 per cent of its assets from the current 7 per cent, according to Swiss national broadcaster SRF, Forbes reported.

The vote comes as a blow to the ''Save Our Swiss Gold'' movement that had hoped to move Switzerland back toward a gold standard, which the country left in 1999. There had been no requirement since then for the country's currency to be backed by gold and consequently central bank gold reserves had waned considerably.

The referendum results did not come as a surprise given earlier polls had predicted the ''no'' camp would win by a large margin, though the results had mitigated concerns that increased demand from the Swiss National Bank (SNB) bump up gold prices.

Commenting on the popular vote on requiring the central bank to keep 20 per cent of its assets in gold, Swiss National Bank (SNB) president Thomas Jordan said ahead of the vote that it would hinder the central bank's ability to conduct monetary policy. Quoting Jordan, The Wall Street Journal reported, ''The initiative is both unnecessary and dangerous'', adding ''It is unnecessary because, under the current monetary order, there is no link between price stability and the share of gold in the SNB balance sheet.''