Switzerland’s Role In The Gold Market

Tyler Durden's picture

Submitted by Dan Popescu via GoldBroker,

« Switzerland is for gold what Bordeaux is to wine », Gilles Labarthe, Swiss journalist and ethnologist.


When one thinks of Switzerland, banking comes to mind easily but gold doesn’t as much. After all, the relationship between Switzerland and gold is more ancient than the one with paper bank deposits. Certain bankers from Geneva, such as Lombard Odier and Pictet, started in 1800 and have more than 200 years of history. Back then, paper money didn’t exist yet and deposits consisted mainly of gold and silver. Today, still, a full two-thirds of the world’s gold goes through Switzerland and, in an average year, it refines grossly 70% of the world’s gold. Six of the gold refiners on the LBMA Good Delivery list make for 90% of global volume, and four of those are in Switzerland. Up until 1992, the Swiss franc’s 40% backing by gold was written in the country’s Constitution. When Switzerland became a member of the International Monetary Fund (IMF) it had to abandon this backing by gold. Today, Swiss citizens have asked for a referendum to be called in order to get back to that backing.

Gold is, along with silver, the oldest money in the world, hence its unbreakable relation with the banking system. Gold is also the most liquid and transportable wealth protection in time and space. In case of war or revolution, it is hard to flee with one’s property or other valuable assets as can be done with gold. In 1685, when the Nantes Edict was revoked by Louis XIV, Protestants were definitely denied their religious rights. This led most of the Huguenots to flee to the European Protestant countries, such as Switzerland.

We all know about Switzerland’s banking secrecy, but a little less about its origins. One might think that it originates in a text of law, like in other banking centers. But banking secrecy is profoundly buried in the Swiss mentality. One can always revoke a law, but it is very hard to change one’s state of mind or tradition. When you ask a question of a Swiss, you have to follow up with ten more questions in order to get a complete response. He will answer bit by bit. If you ask the same question of an Italian, he will tell you about his whole life. Having lived in Switzerland, this is how I can best describe Switzerland’s banking secrecy. Swiss people are discreet by nature. They don’t need laws... laws only reinforce what is de facto.

« It is not the federal banking laws’ article 47 that defines the notion of banking secrecy in Switzerland, but common law; banking secrecy thus falls under the general dispositions of the code of contractual obligations, as well as under articles 27 and 28 of the civil code, which put into law the principle of identity protection. » (1) « Penalties for breaking this principle are covered by the federal banking laws’ article 47, constituting a disposition of administrative penal law. »(2) The civil code protects every personal right worth protecting and, notably, private life secrecy. The Swiss federal Court estimates that, « the inviolability of private life does not only constitute a moral principle, but is also a civil right, a « judicial asset »; it is an attribute of personality, and the law protects it. »(3) And privacy in the economic sphere is also protected.


« What sane man would not put away some money in swiss banks? Switzerland is the vault of the world », Félix Houphouët-Boigny, former President of the Ivory Coast.


For a long time Switzerland has been building infrastructures to safeguard financial assets such as gold. Its political stability, its neutrality, its defense system based on a militia army, and the Alps, that serve as a natural fortress, make Switzerland the ideal safe vault for gold. In addition, we can add to that ultra-qualified personnel, more dedicated to excellence than to volume.

During the crisis of the London Gold Pool in the ‘70s, Zurich has even come close to becoming the main gold trading hub, at the expense of London. The Bank for International Settlements (BIS), the central banks’ banker, is still based in Basel. Almost all of central banks’ gold trades are effected by the BIS in the utmost discretion. The headquarters of the World Gold Council was in Zurich, before moving to London recently. Geneva, where the most important jewelry auctions take place, has also been the global center for jewelry and watchmaking for many years.

The sound management of public finances has the effect of the Swiss franc mimicking the price of gold closely. Recently, in order to protect its exporting businesses, Switzerland decided to peg the Swiss franc to the euro, thus diminishing its attraction as an anti-inflation currency (in favor of gold). Even though Swiss banking secrecy is no longer backed as much by the authorities and the large banks, it still remains strong in the mentality of the Swiss people. True, the Americanization of the Swiss banking system since the ‘80s has weakened banking secrecy and the role of gold in fortune management. However, having talked with Swiss wealth managers, I see that this is starting to change and that, without admitting it publicly, they include more and more gold in their clients’ portfolios. In the last ten years, several companies specialising in gold storage for businesses and individuals, outside the banking system, have appeared.

The Swiss have a reputation for excellence in gold refining. That has let Switzerland become the hub of gold refining, with nearly 70% of the world’s gold transiting through the country. Mining companies and gold recyclers export to Switzerland, where the gold is purified to the highest levels (.9999 or even .99999). It is then exported in the whole world to jewellers, investors or central banks.

The best precious metals storage and safekeeping companies are also based in Switzerland.

Other countries are trying to compete with Switzerland, but they still have a long way to go, especially since Switzerland is not sleeping on its laurels. Two of those countries are City-States like Dubai and Singapore. Singapore is a stable haven in Asia, as is Dubai in the Middle East, but they haven’t reached Switzerland’s level yet. Dubai is trying to develop an expertise in refining and trading gold, whereas Singapore, already with an excellent infrastructure for wealth management, is developing its capacity for gold storage and, also, a gold trading market for Asia.

We live in uncertain times, and no one is safe from unforeseen events. In the actual context, it seems to me that Switzerland is the best place to store gold. However good the infrastructures may be, one must never lose sight of the financial health of the country in which one wants to store gold. A fiscal or financial paradise that has gone into debt loses its independence and will not hesitate to use legal means to confiscate assets and, thus, gold, that are on its territory, as we’ve seen with Cyprus recently. The United States and the European Union have already adjusted their legislation for possible confiscation. Even Switzerland was taking the wrong road with its public finances in the ‘90s but, thanks to direct democracy, a positive radical change has taken place. This is a positive element for Switzerland, even though I remain vigilant. The only caveat I have is that the large Swiss banks, because of high exposure to derivatives and being very present in the United States, have lost a little of their financial stability and, consequently, a little of their independence.


« It is said that the Swiss only love money... this is not true. They also love gold. » Anonymous


Gold Price vs Swiss franc


Largest Gold Refineries by Capacity (tonnes per year)


Switzerland’s Gold Trading (2013)


Gold Trading between Hong Kong and Switzerland

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_ConanTheLibertarian_'s picture

"When Switzerland became a member of the IMF it had to abandon this backing by gold."

How ridiculous is that!

DoChenRollingBearing's picture

Backing by gold does not mean losing one's gold.

BaBaBouy's picture

SWISS Is Just A Fabricating Transit Node For Phys GOLD, On The WAY To................ CHINA...

AldousHuxley's picture

switzerland offers nothing to the world except being a bookie to world's ill gotten wealth.

the people live off of their government supporting dictators.


of course they support gold standard so their purchasing power doesn't decrease.


Swiss citizens = bookie's children

SAT 800's picture

Well, I can see you've made a deep study of the Swiss Economy; not to mention the psychology of its citizens. Try to remember not to commit suicide when your guru tells you the flying saucer is coming to pick you up.

jaxville's picture

The Swiss gold has been a target for the holohoax crowd for a little over two decades now. The Swiss might as well sell it because they will ultimately be forced to give it to chosenites anyhow.

saveandsound's picture

> Today, Swiss citizens have asked for a referendum to be called in order to get back to that backing.

Really? I can't find a referendum asking for a new gold-standard:


Urban Redneck's picture

You do understand that the only reason Greenshit and Berspankme didn't have the opportunity to pwn any Swiss gold was because of the Volker Commission.

(If only they'd kept their greedy mouths shut, their masters could have had a large chunk of it for free since certain members have influence over FRBNY)

Anusocracy's picture

"switzerland offers nothing to the world except being a bookie to world's ill gotten wealth."

Gee, Switzerland is a bookie for the world's governments?

Bankstein Swissgoldberg's picture

Fuck you from Switzerland with a smile!

saveandsound's picture

Would you please post a picture of your avatar in a much higher resolution?

SilverDoctors's picture

I suspect that the Swiss aren't parting with that much of their own gold. 
Most of the gold is flowing through the Swiss towards Hong Kong...but the origination is the US & UK

Dutch website Market Update posted a couple eye opening charts on the amount of US & UK gold flowing through Switzerland to China this week:



giggler321's picture

Stands to reason, before you move, you make sure your luggage is there waiting...

Buck Johnson's picture

China isn't stupid, they know that a new reserve currency will be enacted once the dollar implodes and/or gets seriously devalued and used only in the US.  And the next reserve currency will be a currency valued in a bunch of rare metals and resources as a basket.  This way it will be hard for a country to manipulate the reserve currency.

SAT 800's picture

It's a good article and it would reveal to anyone who could think straight that the Comex lives in terror of the Swiss and London Bar market and not the other way around; but then the manipulation muppets have abandoned thought and rationality in favor of emotional satisfaction.

AvoidingTaxation's picture

The Greek historian Poseidonios (c. 135–50 BC), whose work is preserved only in fragments by other writers, offers the earliest historical record of the Helvetii. Poseidonios described the Helvetians of the late 2nd century BC as "rich in gold but peaceful," without giving clear indication to the location of their territory.

SafelyGraze's picture

there is a lot of misinformation out there about metals as money

something about barter blah blah a portion of a cow blah blah coincidence of wants blah blah

nuh uh

kings/despots/TPTB throughout the ages have demanded "tribute"

i.e., pay up, so's that you wouldn't want that nothing bad would happen to yous

that very phrase is engraved in the earliest roman coins

the point being: you could pay up using your daughters or your animals or your land or your service in the army. 

but from the perspective of the sovereign tyrant: how are his tax collectors going to transport and store all that stuff?

silver and gold were simply a way for the ruling elite to collect their tributes in a storable form

they issued the coin to whatever suckers would take it. then the demanded it all back.

the problem was that some of the payees fled with it, so there wasn't enough to re-collect and then re-issue.

capital controls and confiscation help solve the problem, by permitting the sovereign to keep re-issuing the same metal for actual goods and services.

and that, children, is how metal became money.


Telemakhos's picture

That's not on Roman coins.  

An overlooked fact of metal currency history, however, is that the metal accepted as legal tender was known to the ancients to be selected by law (fiat) rather than common custom.  According to Plutarch, Sparta was known for its gold and luxury until Lycurgus, the lawgiver, decided to reform the state into an austere and highly militarized society.  After reforming real-estate laws, he recalled all gold and silver coin and replaced them with with iron of little value, with the express intention of ensuring that possessing, saving, and spending fiat iron would be physically difficult, since you'd need at least a wheelbarrow to get a sufficent amount of iron to a potential seller for any large purchase, and a massive storage facility if you intended to store that "wealth."  That also prevented international trade (often considered a source of moral corruption among the ancients) except for transactions authorized by the state, which possessed all the gold and silver.  More importantly, however, it was supposed to hinder avarice and conspicuous consumption and encourage the Spartans to cultivate military and civic virtue as a means to compete and distinguish oneself instead.

The Athenians faced a similar problem later on, when inflation hit them, for various reasons including the influx of spoils of war and newly mined silver, and made even their coinage (silver was the Athenian metal par excellance, but they had gold too) difficult to gather and transport for payment, especially for the high prices demanded of real estate.  Bankers arose and unregulated fractional lending (See Cohen's Athenian Economy and Society), which seems to have driven inflation further.  There's no record of any run on a bank, and the wealthy who used the banks seem to have accepted the concept of money existing "on the books" only.  

And that, children, is how a) fiat developed in the ancient world as a way to hinder the free accumulation and use of wealth, and b) imaginary ledger entries became money alongside the weight of metal currencies.

Urban Redneck's picture

The glaring factual error in the second paragraph is an embarrassment, coming from someone who has supposedly practiced finance in Switzerland. "Gold is, along with silver, the oldest money in the world, hence its unbreakable relation with the banking system."

Grain is the oldest money in the world. PERIOD.

The members of the private families who control(led) the large firms will tell you that next to whoring and warring- the grain trade is the world's oldest profession, and even most conspiracy theorists couldn't tell you their names. Unlike the oil business, the grain business prints a fresh and sustainable crop of money each year (unlevered billions before taking account their captive trading subsidiaries). Before the rise of Monsanto and GMO, this was a basically closed cycle of annual wealth creation, that has been going on a since the beginning of human civilization.

It is also important in the context of the development of finance in Switzerland over the last three decades, as the commodities trading business has grown a handful of guys in Geneva into an industry on par with wealth management itself.

Gold is money, but is a relatively static and enduring form of money. TPTB aren't interested in static, as the money and debt supply grow- their share needs to grow at least as fast. So while a healthy allocation to an enduing form of money like gold is desirable, TPTB need exposure to to other hard money creation such as oil or grain, or for the nouveau riche- Janus' other face - the ever-growing debt supply.

The king's tribute, which has financed wars for millenia, has never generally been paid by serfs panning for gold... The rise of banking, which has facilitated the finance of wars, is an evolution and substitution of grain money.

Telemakhos's picture

There's always an exception: the king's tribute from Mexico in the sixteenth century very much was paid for by natives panning for gold.  That didn't last, though, and you're right that agriculture serves the primary human need of sustenenance, to which all other material desires, and thus other forms of material wealth, are secondary.

Urban Redneck's picture

That is certainly a valid exception, but along with the individuals who might pan for their tribute in Mexico, there was a large amount of industrial scale pillaging using cheap labor to extract gold (and expand the money supply). While those Mexicans were panning for gold (individually or collectively) and then shipping it back in bulk, some long dead relative of mine had to regularly buy sizable and increasing chunks of it to pay his annual Hapsburg tax since he was clearing almost 100,000 gold escudos in profit per year from his "little farms" in Cuba. It takes a lot sifting to collect enough grains of gold to mint 100,000 gold coins each year. Cuba's not that big an island, but if you scale a few thousand well managed acres generating 100,000 gold coins in profit per year to all the highly productive farms in the Crown's domain, that's a whole lot of dirt dollars.

EDIT: And this was long before the brain trust and the Deep State (with guys with names like EARL BUTZ and REX TUGWELL) jumped into bed with the Ag Trust, which of course now pays basically 0% in taxes in each year in the two decade era of overt globalization. So how much are those with hundreds of thousands and millions of acres today in integrated agribusiness pocketing each year?

The recent pieces on Hoover/FDR and the Deep State reminded me of Tugwell's The Emerging Constitution, which is a frightening read and insight to into the entrenched fascism in the US machine concomitant with little Adolf's experiment in Europe (there is a free PDF version floating around, and the googlebot can easily find all 671 pages of it).

Dewey Cheatum Howe's picture

The king's tribute, which has financed wars for millenia, has never generally been paid by serfs panning for gold... The rise of banking, which has facilitated the finance of wars, is an evolution and substitution of grain money.

Yep most people don't realize one of the biggest financiers of the American Revolutionary war was Spain via silver mined by slaves in their American colonies. Also one of the reasons for so long one of leading circulating forms of money used in the United States was the Spanish Silver Dollar until the US went off the bi-metal standard in the 1870s. Even though only the Treasury could mint coins any gold or silver coin could be used as legal tender up to that point since the founders put in a simple caveat giving them control over all monetary money used for legal tender in the Constitution aka Article I section 8.



To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;



The United States 'freedom' was bought and maintained by silver not gold. An important metal monetary lesson besides it's fertile farmlands the real money for the majority of Americans in a metal equivalent was always silver not gold at least here in the US. Not only that if you peg it to grain which the ultimate form of money value is usually based in calories since the systems are energy based they also had the ability to use inflation/deflation monetary policy to change the value of silver in relation to grain production. But that peg if it exists is well hidden through layering and dillution on the top of the monetary system.

I've said it before and I'll say it again if you want to crack the whole market manipulation scheme, silver has always been the key. It's paper value will have a direct correlation to something it shouldn't be pegged to and that correlation should almost mirror the average rate of stealth purchasing power tax through inflation since the US dropped using silver certificates in 1964 based upon the purchasing power of a single quarter because it was a fixed weight monetary coin.

I think all you Hardy Boys know which commodity market item(s) to do the analysis on now in relation to silver.

Al Huxley's picture

Damn!  Switzerland sounds like a fantastic place to store gold - if only they weren't stooges to the fascist Western governments and central banks, I'd be totally down with storing gold there!

mccvilb's picture

A puff piece if there ever was one. Refiners? More like resmelterers and rehypothecators. Got to remove those Germanic insigniae at the intermediary stage before shipping it off. Sorry, Angela.

Mesquite's picture

Also to remove any Tungsten...


SAT 800's picture

Don't stress over it; we won't miss your Kruggerand.

Al Huxley's picture

Whew, thanks for OK'ing that for me.  You know, I wanted to check in with you to make sure you were good with it, but didn't know how to contact you.

Bankstein Swissgoldberg's picture

if only they weren't stooges to the fascist Western governments?!?!?


i guess you are an independant fisher in Madagascar?

Al Huxley's picture

So they DON'T roll over and divulge all account information whenever the IRS or DHS knocks on their door?

williambanzai7's picture

All the macho talk about Swiss bank secrecy rings hollow to me...

DoChenRollingBearing's picture

Yes, to me as well.  Still if anyone with gold has the means, a little geographical diversification in storing your gold seems to be a very good idea.

Al Huxley's picture

I'd take a trip to the Antarctic and bury it under the ice before I'd give it to the Swiss to take care of.  Might as well let the FED look after it as trust the Swiss.

Manthong's picture

What? Gold is not money?
What kind of freaking idiot moron cretin would think or say something like that?

 “Gold is money. Everything else is credit.”
-J P Morgan

(my Swiss Chronograph made mostly out of money.. it has lost no value and soon it will be worth way more than I paid for it >20 years ago)

Muc Metals's picture

Sorry to say that famous J.P. Morgan quote was:



“Money is gold, and nothing else”




"Money is gold, and nothing else” was said by John Pierpont (J. P.) Morgan
on December 19, 1912 at the Pujo Committee of the House of Representatives
that was investigating the power of Wall Street.
Morgan’s statement was featured in newspapers the next day.


“Money is gold” is often misquoted as “Gold is money.”
Modern misquotations of Morgan’s remarks include
“Gold is money—everything else is credit”
and “Gold and silver are money—everything else is credit.”



Please check: 




Manthong's picture

OK, fine.. the sentiments are all correct except ol' JP was off a bit.

I believe that according to the Constitution and subsequent Coinage Act, silver is defined as money, too.

Dugald's picture

Had a Rollex Oyster for some years...worst time keeping piece of Swiss shit I ever owned, best thing the Swiss ever did was go digital...certainly saved their watch trade.....

Al Huxley's picture

NB - Might as well let the FED look after it as trust Swiss BANKERS.  Nothing against the Swiss who aren't part of the globablist, elitist, 'kowtowing to the IRS and DHS' banker set.

aleph0's picture

'NOT YET read "Gold Wars" by Ferdinand Lips ? ... written in 2001.


Lips worked for the Rothschild Bank amongst others.

The big take away was that the Western CB System had Switzerland in their sights as Public Enemy #1 ... because the CHF was backed to 40% by gold. Take away Banking Secrecy and you have no longer ANY secrets .. like where your Gold is hidden for starters.

UBS was conned into "going Global" by the Globalization hype around Y2K , strayed away from solid banking ... and paid the price with Switzerland's sovereignty.

The author is right here ... "In the last ten years, several companies specialising in gold storage for businesses and individuals, outside the banking system, have appeared."

Check out  Matterhorn's Greyerz about how some his customers who "thought" they had Gold at the Bank .... and promptly found somewhere else to store it ... after "only getting cash back".

BTW ... when are the "Cayman Islands" due ?
Probably never.

JustObserving's picture

NSA has been spying on Swiss politicians for more than a decade now.  Switzerland will never go back on the gold standard.

Look at Angela Merkel, the new American poodle, even as the US does not allow her to see her NSA file:

The US government is refusing to grant Angela Merkel access to her NSA file or answer formal questions from Germany about its surveillance activities, raising the stakes before a crucial visit by the German chancellor to Washington.


Merkel, the obedient poodle, supports the current massacre in the Ukraine - that's what you get when the NSA has been listening to your conversations since 2002. And she won't allow Snowden to enter Germany to testify and has thwarted investigation of NSA scandal.  Incidentally, she got the Presidential Medal of Freedom from Obama in 2011:


German government thwarts investigation of NSA scandal

By Sven Heymanns 
3 May 2014


On the day of Chancellor Angela Merkel’s trip to the US, the German government made clear that it would thwart any further investigation into the spying activities of America’s National Security Agency (NSA).


DoChenRollingBearing's picture

That is very curious.  We spy on them, they complain.  Then they cover up our spying on them for us.  Hmm.

Edward1290's picture

prolly showed her the Zapruder film......just sayin

The Abstraction of Justice's picture

'Gold is also the most liquid and transportable wealth protection in time and space'


That honour belongs to bitcoin.

DoChenRollingBearing's picture

Bitcoin has tremendous value as a way to get money moved around the world with great ease.  Why, even gold can be picked up on the scanners at the airport.

With BTC, you can either take it with you (on your laptop or even just a flash drive), or you can just put a wallet up at blockchain.info and you just need secure internet access wherever you are going.

And reasonably clever use of wallets and mixing services provide quite a bit of anonymity.

WillyGroper's picture

Given NSA capabiities, perhaps bitcoin is no different than that ankle bracelet most people carry around.

What is secure internet access?

DoChenRollingBearing's picture

Secure internet access: Peru?

But, you may be right abount NSA and BTC...

Thisson's picture

There is ZERO anonymity with bitcoin.

JustUsChickensHere's picture

As DCRB said, with some care, you can get anonymity with BTC.


Do all this using the Tor browser, it run from a 'tails' boot CD version of Linux.

 .. arrange a purchase on localbitcoins.com using an Over The Counter trade (complete in person for national fiat cash)

... create a new account on btc-e.com (disposable - no KYC involved)

... move BTC from localbitcoins wallet to disposible btc-e.com account

... sell into USD .... buy back from USD on btc-e

.... withdraw into several paper wallets (using random amounts to equal the total value).

This breaks any trace of your real ID with the funds - and they are now held rather securely off computer as a bonus.


saveandsound's picture

Why would anyone store his or her bitcoins anywhere else but in a wallet on his or her own hardrive or flash?

Aside that I don't thrust bitcoin anyhow:

Someone can't steal your bitcoin due to the peer-to-peer-control of the blockchain, however someone can take away your wallet when he or she has physical access to it.

Just saying.

buyingsterling's picture

Bitcoin should really be called 'bitchcoin', because e-currencies have only one distinctive characteristic: they alone, among all currencies through all time, are the only ones that are UTTERLY dependent on the powers that be, since the powers that be ultimately control the net and the grid. Use bitchcoin if you want to be their bitch.