Says Citi: Citi: It makes no sense for the Swiss National Bank to hold 20% gold
- Unsound to invest 20% of central bank’s balance sheet in a single commodity
- Says it represents a “highly unorthodox and risky investment strategy”
- Better to have balanced portfolio of commodities, commodity ETFs or other derivatives
- Holding all physical assets in one nation ignores benefits of geographic diversification of ‘custodial risk’
- Making it illegal to ever sell any of the gold the bank has now or acquires in future, and enforcing this sale ban would make the gold useless as an international reserve
(Citi via Bloomberg)
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Citi is referrring to the gold referendum in Switzerland this weekend: Will there be a buyer of 1700 tons of gold after November?
- The poll is on Sunday (November 30)
- Initial results are expected from around 1630GMT (there is no firm time, this is a reasonable expectation based on early exits polls for the Swiss immigration referendum in February)
- Latest polls put the ‘Yes’ vote in a losing position around 38%
