Gold and Switzerland
When it comes to the key words of gold and Switzerland, few people think of international precious metal trade or even gold mines. However, gold has a long and varied history in Switzerland.
Natural gold deposits
Little is known about the existence of natural gold deposits in the country. The exploitation of these deposits actually has a long tradition, however. To begin with, the Celtic Helvetians and the Romans successfully searched for gold deposits in streams and rivers of the country. To this day, especially in western Switzerland and in the cantons of Lucerne, Aargau and Thurgau, there are popular spots where panning for gold takes place. In such locations, hobby gold miners are continually turning up quite respectable nuggets from the waters.
Land-based gold mining has a heritage worthy of note: Smaller mines were operating in the country from the 17th century right through to the 1960s. For example, mining continued at the Sessa gold mine in Ticino up until 1952. This mine is located in the Malcantone mining region between Lake Lugano and Lake Maggiore, and lies close to the Astano mine which is not quite so well known. “Leonilde”, the Sessa mine’s 375-metre-long main tunnel, has been open to tourists since 2018 after undergoing extensive restoration work. It now provides some spectacular insights into the dark, subterranean world of historical mining, and also illustrates the rich mineral deposits found in the Monte Sceré region. The gold mines situated around the village of Gondo in the canton of Valais on the Italian border are also of historical importance. These “Mines d’Or de Gonde” were in operation until the last years of the 19th century, but only the ruins of the old workings can be seen today. Geologically speaking, most Swiss gold was deposited during the formation of the Alps.
This is particularly so in south-eastern Switzerland, for example in and around Graubünden, where there are still small gold deposits to this day which, in view of the level of exploitation of the world’s gold reserves, repeatedly cause speculation about a resurgence of industrial mining.
In fact, Switzerland plays a much more important role in the international gold trade than it does as a gold-producing country. In this regard, the country plays a crucial, if not the leading, global role. What may sound obvious at first is the fact that the country has one of the leading stock exchanges of all the financial centres in the world in Zurich. Here, almost everything is traded from securities to commodity derivatives. That said, gold trading is conducted well beyond the borders of Zurich thanks to the computer-aided action of digital buying and selling options. These are, in the final analysis, often simple bets on the rise of the international price of gold. The precious metal is transported to and from the country in a very real sense, where it is refined and, for the most part, re-exported elsewhere. What’s more, this happens on a very grand scale: Switzerland is the world’s largest gold importers, ahead of China, the UK and Hong Kong.
The business of gold refining is usually carried out as follows: Swiss companies refine delivered gold on behalf of their customers to the desired degree of purity or buy the precious metal, refine it and then sell it on its own accord. Furthermore, this is done very successfully: four of the world’s six largest gold refineries are based in Switzerland. In total, more than two-thirds of the world’s gold production is processed this way.
The result of these refining processes is gold bullion in the main, but also gold coins, medals and so-called semi-finished products, i.e. pre-cursors, which are mainly destined for use in the jewellery and watch industries. More than 80 per cent of the production of the Swiss gold refineries will be re-exported after the refining process. As such, the gold industry is one of the major pillars of the Swiss Federal Foreign Trade. With exports worth more than 68 billion francs, precious metals were the second most important export item of the Swiss Confederation in 2018. Indeed, around 95 per cent of this figure is attributable to gold exports alone.
The reasons for the unique position in gold refinement are varied. On the one hand, Switzerland offers excellent framework conditions for trading such a valuable and sensitive asset. The security and logistics conditions for the transit of this sought-after metal are globally unique. Of course, the stable and traditional Swiss financial system also contributes to the smooth handling of gold trading, as well.
On the other hand, Swiss refineries can score well when compared to other facilities thanks to their technical supremacy. So, they are able to achieve almost every desired degree of purity in the refining process, up to 99.99 per cent. This technical perfection is in no short measure down to the long history of the companies involved as suppliers to the Swiss watch industry as well as the and Italian jewellery sector. However, the latter, in particular, has become significantly less important for the Swiss gold industry: the most important international trading partners are now located in Asia, with main exporting countries being India and China.
Buying gold in Switzerland
As is the case in most countries of the Western world, gold purchases – especially those for investment – are conducted mainly through banks or privately-owned, independent gold dealers in Switzerland. The days when a large proportion of the precious metal was sold over the counter of jewellery and watch dealers are long gone.
The choice of which dealer to select depends on the expectations of the gold buyer. For private investors who value reliability, transparency and competitive prices, Echtgeld Ltd is a recommended place to turn. Founded in 2010, the company, which has its headquarters in Giswil and Bern, specialises in gold and silver trading in the form of ingots and coins. Membership of the self-regulatory organisation PolyReg, which is controlled by the FINMA regulator, guarantees retail investors of the company’s transparency and seriousness.
The process is simple: Purchases from 5,000 francs can be carried out by customers online via the company’s website or, alternatively, by a telephone call or an e-mail. The purchased gold will be sent to the desired address after payment. Investors who prefer personal contact can also personally process their gold purchase in the company’s office in Bern.
Storage of gold
In accordance with Switzerland’s importance in physical gold trading, large quantities of the precious metal are stored within Swiss borders. The stock levels of the country’s precious metal refineries account for a large part of this overall quantity but, of course, there are also not insignificant gold holdings that are held in private hands. Especially in view of the global financial crisis, more and more private investors are investing in this crisis-proof metal.
Often, such private stocks of gold are not insignificant in terms of their values. This means that the owner of the gold concerned is confronted with the challenge of the safe storage of his or her ‘crisis currency’. In this regard, the ideal solutions are offered by Swiss Gold Safe AG. The company stores the gold stock of private and institutional investors in highly secure facilities that are independent of banks and where access is always possible. You can choose between two options. Firstly, private investors can rent discreet lockers of various sizes for the storage of their gold holdings in the Gotthard area or in Schaan in Liechtenstein . Additional insurance can be arranged upon request. Access is possible 24 hours a day thanks to the service offered. In addition, Swiss Gold Safe AG provides segregated storage for valuables. Any precious metals delivered to the facility – as well as gold, of course, other items, such as platinum bars or silver coins are included in the service – are stored securely and, above all, are safeguarded by the vaults of the company. At the end of the storage period, unlike the usual collective custody system, investors receive their stored valuables back exactly as they were before.