Here's Why the Price of Gold May Jump 20%

The Swiss National Bank's gold holdings, currently the seventh largest globally, may increase significantly under a new proposal. This change could see the SNB buying 7% of the world's gold demand annually, potentially raising gold prices by 17%. While intended to preserve national wealth, the move might strengthen the Swiss franc, harming Swiss businesses. The SNB would need to hold 20% of its assets in gold, up from 8%, possibly selling foreign currency reserves. This shift raises concerns about the franc's strength amid a global economic slowdown.

What is the current global ranking of the Swiss National Bank's gold holdings?

• Third

• Tenth

• Seventh

• Fifth

How much could the price of gold increase according to some analysts if the SNB implements the new proposal?

• 10%

• 15%

• 17%

• 20%

What percentage of its assets will the SNB be required to hold in gold under the new rule?

• 25%

• 20%

• 15%

• 10%

What could be a potential consequence of the SNB selling its foreign currency reserves?

• Stronger Swiss franc

• Weaker Swiss franc

• Increased inflation

• Decreased gold prices

Why might the strengthening of the Swiss franc be a concern for Swiss businesses?

• It could decrease foreign investment.

• It could make Swiss exports less competitive.

• It could increase domestic inflation.

• It could lead to higher import costs.