Swiss bank and wealth manager Vontobel Holding AG is reporting that investors are buying more gold as an alternative to Swiss francs.
The Swiss National Bank (SNB) imposed a 0.75% negative interest rate on some deposits as of January 22 – an increase in charges on banks that use the SNB as a custodian for Swiss franc deposits. Subsequently, Vontobel Holding AG raised the proportion of gold in its discretionary managed investments by 2%. Vontobel has also had to charge its large clients additional fees in order to compensate for the SNB charges.
“The cost of holding Swiss cash or bonds, which have yielded negatively for notes as long as 10 years, is prompting bankers and their clients to review investment portfolios,” Giles Broom writes in Bloomberg.
“We keep noticing that gold is coming back into favor with investors.”
Fears that Greece may stop using the euro as well as heightened conflict in Ukraine have sparked demand for gold as a safe-haven asset, helping it to rise 4.2% this year even as the dollar remains strong and the Federal Reserve talks of raising interest rates. On Monday we wrote of increased demand for gold coins among Greek investors. Concerns over a currency war have contributed as well, as numerous central banks around the world announce plans to print money.
“We keep noticing that gold is coming back into favor with investors,” Vontobel CEO Zeno Staub said to reporters on Wednesday.
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