Support among Swiss voters for a referendum proposal that would force a huge increase in the central bank's gold reserves has slipped to 38 percent, an opinion poll showed on Wednesday, falling short of the majority backing it needs to become law.
Under the "Save our Swiss gold" proposal, the Swiss National Bank (SNB) would be banned from selling any of its gold reserves and would have to hold at least 20 percent of its assets in the metal, compared with 7.8 percent last month.
More than 50 percent need to vote in favor in the Nov. 30 referendum for the proposal to succeed.
Wednesday's poll, conducted by Berne-based research institute gfs.bern in partnership with Swiss broadcaster SRG, showed 47 percent opposed the initiative, which has been led by the right-wing Swiss People's Party, while 15 percent were undecided or gave no answer.
Support for "Save our Swiss gold" was down from 44 percent in a survey conducted last month, also by gfs.bern.
The proposal has set gold and foreign exchange markets on edge and drawn fire from the SNB itself, which has bristled at what it says would curb its ability to set monetary policy.
The central bank faces the biggest test of its cap on the Swiss franc in more than two years, which it has vowed to defend in foreign exchange markets to keep the currency from strengthening beyond 1.20 per euro.
Supporters of the proposal say it would secure a stable franc but the SNB and government have said a "yes" vote would raise unemployment and the risk of recession.
The Swiss franc weakened to the day's low of 1.2027 per euro after the poll results were published.
SNB WARNS AGAINST YES-VOTE
Central bank Chairman Thomas Jordan said before the poll was released that he foresaw problems if the initiative were to pass. "The SNB couldn't fulfill its mandate of securing price stability or buffer major shocks to the economy as well as it currently does," he said in Wednesday's edition of Zuercher Oberlaender, a regional Swiss newspaper.
According to data from the World Gold Council, Switzerland is the world's seventh largest official sector gold holder ahead of Russia and Japan, with reserves of 1,040.1 tonnes, worth 38.5 billion francs ($40.21 billion) at today's prices.
It sold substantial quantities of gold in the early years of the 21st century, with its reserves declining from 2,590 tonnes in early 2000 to their current levels by mid-2008.
LBBW commodity analyst Thorsten Proettel said the proposal was unlikely to become law. "The chairman of the Swiss National Bank has spoken against the referendum, and I think the necessary 50 percent vote will not be reached," he said.
Deutsche Bank said in a report last week that a "yes" vote, while possibly giving some immediate lift to gold prices, would not necessarily benefit the metal in the long term.
The SNB could spread out its gold buying, take transactions off market, or use derivatives to cushion prices from the impact of a "yes" vote, Deutsche said.
Spot gold prices were down 1.5 percent at 1614 GMT at $1,179.76 an ounce.
© 2023 Thomson/Reuters. All rights reserved.