Switzerland Goes Back To Neutrality – And Lets In Russian Gold

The global news narrative creates the impression that the world is united in its opposition to the Russian invasion of Ukraine, and that all major economies have joined in the financial and economic sanctions aimed at Russia. That narrative is false; it’s not even close to reality.

It’s true that the U.S., UK, EU, and allies such as Japan, Canada, and Australia have joined in sanctions and many are supplying weapons to Ukraine. Still, a large number of nations, including huge pieces of the global economic picture, are remaining neutral. This does not mean they approve of Putin’s actions. It just means they are keeping out of the fight and trying to go about their economic business as usual.

This neutral group includes China, the world’s second-largest economy; India, the world’s fifth-largest economy; and Brazil, the world’s tenth-largest economy. Other major economies remaining neutral include Iran, Indonesia, Saudi Arabia, and Argentina.

One of the most interesting cases is Switzerland. Of course, Switzerland has a long history of remaining neutral including during World War I and World War II. The last time Switzerland was invaded was 500 years ago (the Swiss sent the French invaders into full retreat back to France). So, it was highly unusual when Switzerland announced that it was joining in certain anti-Russian sanctions in the immediate aftermath of the invasion.

Many individual citizens of Switzerland were disappointed at this decision and considered it a blunder, regardless of their personal views on the invasion. It seems the Swiss government listened to its own citizens. As reported in this article, Switzerland has now relaxed its initial ban on imports of Russian gold for processing in its gold refineries.

I met near Lugano with the head of precious metals at one of the largest refineries in Switzerland a few years ago. He told me then that they were having difficulty sourcing gold ore and scrap to keep up with demand for new gold bars. The shortage has only grown worse since then.

Of course, the idea of “Russian gold” or “Chinese gold” is a bit ridiculous because gold is an element, atomic number 79, and is chemically untraceable when it is melted and cast into a new form. (It is possible to use a digital paper trail, holograms, and serial numbers stamped onto the bar to create a chain of custody, but that can be erased with new processing in new hands).

The financial and economic war against Russia continues, but at least one country, Switzerland, has joined the neutral column when it comes to the ultimate commodity – gold.

Corporate leaders and institutional fiduciaries looking to incorporate state of the art predictive analytics to their risk mitigation and strategic analysis should click the link to learn more about Raven Predictive Analytics®.