Gold slid 2 percent and silver slumped to its lowest since 2009 after Swiss voters overwhelmingly rejected a proposal to boost central bank gold reserves. But as Sonia Legg reports a rebound quickly followed.
A yes vote would have forced the Swiss National Bank to increase its gold reserves from 8% to 20% of its assets. So a NO vote - which in the end voters favoured - sent gold prices tumbling 2%. Spot gold fell to its lowest level since early November while spot silver followed suit, hitting a five year low. A rebound quickly followed after a fresh wave of buying. And the result of the referendum, which also rejected strict new curbs on immigration, was a relief for the Swiss government. (SOUNDBITE) (French) FEDERAL COUNCILLOR EVELINE WIDMER-SCHLUMPF SAYING: "The majority of voters refused to considerably restrain the Swiss National Bank's capacity to act. As an independent institution, it has the required flexibility to ensure price stability, while contributing to the harmonious development of the economy." Despite its prosperity there's a growing feeling in Switzerland that foreign workers are eroding the country's Alpine culture. The referendum asked voters whether they'd like to see numbers cut by three-quarters. Those behind the initiative were disappointed. (SOUNDBITE) (French) ECOPOP INITIATIVE'S SPOKESWOMAN, ANITA MESSERE, SAYING: "Indeed, it's a bitter defeat, 70 percent of the voters rejected the initiative, that's huge. I didn't expect such a Putin-like result, but it is the case, we must acknowledge it." The Swiss franc dipped slightly against the euro after the vote. But investors still regard it as one of the safest currencies in the world. There was relief too that the government doesn't have to ditch its efforts to salvage treaties with the EU. Economic ties with the bloc are based on the principle of free movement of people and the EU is it's biggest trading partner.