"High-net-worth individuals are dependent on the health of the financial system. If you take some of your investments out and put it in the vault, then you can reduce your exposure."
- Ole Hansen, head of commodity strategy as Saxo Bank A/S
The Swiss federal government revised its budget outlook, saying it expects to end this year with a modest budget surplus, instead of a previously expected deficit, as the nation's authorities cut on spending and received a share of a $1.5 billion fine against UBS for rigging Libor. The latest estimates are now showing the government expects a surplus of about 600 million francs, compared with an earlier forecast for a deficit of 400 million francs. So far the government has curbed its spending on social security, as well as at the military and government staffing. Moreover, it has registered a one-time gain of 59 million francs from the country's flagship banks UBS for its recent manipulations with Libor interest rates, handed down in December. Since 2003 Swiss public expenditures have been monitored with the help of a constitutional "debt break", which compels the government to link its spending plans to revenues projections and accumulate surpluses, when the economy is developing, so it works as a buffer, when the economy is struggling grow. Also Thursday, the World Gold Council said that demand for physical gold soared 53% in the second quarter, reaching 1,083.2 metric tons. As the Eurozone went through its record-long recession, demand for storing gold bars and coins in Swiss vaults experienced a strong rise. Even despite a recent 20% fall in gold price, some investors are considering gold as a less risky asset in comparison with other even government bonds.
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