News that the Swiss National Bank (SNB) would sell 250 tonnes of its gold reserves by the end of 2009 did little to dampen enthusiasm for the yellow metal in Asia today (Monday, June 18).
Late last week the SNB made the following announcement: "The Swiss National Bank is adjusting the composition of its currency reserves.
"Before the end of September 2009 it will sell 250 tonnes of gold and increase its foreign exchange reserves by a corresponding amount. The overall level of currency reserves will remain unchanged."
The price of gold initially fell to $649.50 per ounce on Friday, but then rebounded to $656.50 per ounce. Losses by the US dollar increased gold's attractiveness as a hedge against the US economy.
In Japan, gold for delivery in April 2008 increased by 1.2 per cent to $663 per ounce on the Tokyo Commodity Exchange today.
The SNB is a traditional champion of gold and its decision to sell off around 20 per cent of its reserves could have had a significant impact on the gold price.