Jun 15, 2007

Switzerland keeps bailing out its banks short gold

Switzerland to Sell 250 Tons of Gold

By The Associated Press
via Yahoo News
Thursday, June 14, 2007

BERN, Switzerland -- The Swiss National Bank said Thursday it will sell 276 US tons of gold reserves over the next two years.

The sale would fetch about $5.2 billion (3.9 billion euros) at current prices.

The proceeds will be used to increase Switzerland's foreign currency reserves, national bank directorate member Thomas Jordan told reporters.

The share of gold in Switzerland's currency reserves has risen to 42 percent from 33 percent since mid-2005 due to the increase in gold prices. Jordan said the sale would return the share of gold in the currency reserves to their previous level.

The sale will occur at regular intervals over period of two years to minimize the impact on the gold market. Once completed, the national bank will hold 1,040 metric tons (1,146 US tons) of gold.

Between 2000 and 2005 Switzerland sold 1,300 metric tons (1,433 US tons) of surplus gold reserves. The proceeds -- about 21 billion Swiss francs -- were distributed between the federal government and the country's 26 cantons (states), which used the money to pay off debts.

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