When gold prices soared in the period 2010–2012, there were murmurs of reserve mismanagement, supported by hypothetical estimates of the notional “losses” we suffered by not investing up to 50 per cent of our reserves in gold.
Gold prices fell nearly 30 per cent to USD1,204 in 2013, its sharpest decline since 2001, pushing, for example, the Swiss National Bank to a SFR9 billion loss in 2013. I wonder how our Bank would have coped if we had followed the advice to invest half of our reserves in the yellow metal!