To gold investors, a different election is more important than the United States' Nov. 4 election that gave Republicans control of the U.S. Senate.

According to Mike Fuljenz in his first November weekly report in The Mike Fuljenz Metals Market Report, this more important election is in Switzerland Nov. 30, where Swiss voters will likely adopt at least one of three measures requiring the Swiss National Bank to actively enter the gold market.

One measure requires Swiss citizens to increase their overall assets in gold to 20 percent, from the current 7 percent. The other two measures would require the Swiss National Bank to repatriate all Swiss gold held overseas, and to never sell their mandated gold holdings.

“Speculators might pour into gold if all three measures pass, but the SNB won’t likely enter the gold market right away,” Fuljenz says. “They will be allowed five years to meet the 20 percent gold-backing requirement, and they will probably procrastinate (or refuse to act) for the first year, waiting for a lower price. They will likely buy gold in small lots, so as not to impact the price of gold, pushing their future purchase price higher.”

To accomplish the goal of the proposed requirement, according to Fuljenz, the Swiss would need to add approximately 48 million ounces to their holdings, which reflects about 60 percent of annual mine production.

Polling of Swiss voters suggests the vote will be narrow. Gold could suffer another price drop should none of the three proposed measures pass, Fuljenz says.

“Swiss politicians, of course, are outspoken in their opposition to these measures,” says Fuljenz. “Imagine telling a politician they have ‘no right to sell gold.’ That’s a red flag, even to a gold-friendly politician.”

At the recent New Orleans Investment Conference, Gary Alexander hosted a closing panel with Marc Faber, Porter Stansberry and Alan Greenspan, in which Faber, publisher of the Gloom Boom & Doom Report newsletter, said he didn’t care if the gold vote passed or not. Faber said that many people have asked him to write articles favoring the Swiss gold resolutions, but he has turned them down.

Fuljenz said Faber explained himself this way: “The referendum calls for 20 percent gold backing. If it were a 100 percent backing, I would endorse it, but 20 percent is neither here nor there. I think we should all become our own central bank. Each one of us can put 10 percent or 20 percent of our portfolio into gold right now. We don’t need a central bank to back a currency with 20 percent gold. We should each hold our own gold reserves.”

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