Binary traders who have exposure to gold should take special note of the Swiss parliament’s proposal to make gold the ‘health currency’. The Swiss People’s Party, which happens to be the biggest party in this country is pushing through a hard hitting campaign to have the proposal approved and implemented.
Discussions to Determine Feasibility
The proposal will be assessed by a Swiss parliament panel to determine its feasibility. The panel will be considering the move to bring in a new currency which will be called the ‘gold franc’. About 5 Swiss franc will equal one gold coin, which gives the coin a dollar value of around $5.30. Even if the gold franc currency does come into use here, the Swiss franc will continue to be the official currency of the nation. In effect, the gold will be parallel currency and will not replace the existing one at any cost. .
The panel will also deliberate o the importance and viability of bringing in gold currency to shore up the Swiss franc from devaluation. A serious debate about the present state of the Swiss franc is expected to be undertaken by the panelists.
Reasons Behind the Proposal
One of the main reasons behind the proposal for introducing a gold franc currency is that the Eurozone has been taking a battering for quite a few months now. Globally, the turmoil and financial insecurity in various economies is still very much a reality. Within the Eurozone countries, several have fallen back into recession including Italy and Britain. The only Eurozone country to show marginal positive growth is Germany.
Not surprisingly, confidence in the Euro as well as in Swiss currency is waning fast. It is in a bid to offer some stability to the Swiss economy and to bolster investor confidence in this country’s financial condition that the gold franc scheme is being mooted.
Obviously, this program seeks to mitigate the potential risks that arise from continuing with the fiat Swiss franc currency. Like all other currencies across the world, Swiss francs are also not backed by gold reserves. If the gold franc system does come through, the dynamics could change dramatically. Gold binary traders should note that prices may change significantly depending on the outcome of the parliamentary panel discussion.