(Yicai) Nov. 18 — Switzerland’s role in the gold industry will focus increasingly on sustainability and transparency in the future, according to the president of the Swiss Association of Manufacturers and Traders in Precious Metals.
Despite higher costs and a smaller market share, Switzerland aims to stay competitive by ensuring its gold is ethically sourced, Christoph Wild noted in a recent interview with Yicai.
This presents an opportunity for the country to showcase that responsible, ethical practices are possible in an industry whose reputation is sullied at the moment, he said.
As one of the world’s 12 major gold refining centers, Switzerland plays a key role in refining the yellow metal and also has a unique authority in setting global standards. The ASFCMP, which Wild heads, represents its major precious metal refiners and traders, and is the country’s most influential group in the field.
Below are excerpts from the interview:
Yicai: What makes Switzerland so critical in the global gold supply chain? What are the unique factors that contribute to its dominance?
Christoph Wild: Compared to the other 11 leading refining centers globally, we stand out not necessarily by volume but by the range and quality of services we offer. This is what makes Switzerland unique.
Switzerland provides an extensive range of products and services across the gold supply chain, from mining through to the final consumer product. This breadth of offerings certainly sets Switzerland apart.
Historically, when Switzerland took over from London in the late 1960s, we established a strong reputation in precious metals refining and trading. Precious metals require several essential components: a highly efficient logistics system, a robust banking sector for secure transactions, a high level of security, political stability, and reliable infrastructure to store and transport these valuable materials.
Switzerland meets all these needs seamlessly. Moreover, our proximity to both upstream suppliers and downstream consumers enhances our position in the market.
Yicai: Could you expand on how Switzerland manages to maintain this reputation globally?
CW: Reliability is the foundation of Switzerland’s reputation. We often say that when a customer brings precious metals to Switzerland, they know exactly how much they are bringing in and can be confident they will receive the same amount back without delay.
Switzerland is also exceptionally efficient in refining and transforming precious metals, which reduces turnaround time and, consequently, interest costs for clients. This efficiency reflects Switzerland’s strong culture of refining excellence.
Historically, in the late 1960s, Swiss banks like UBS, Swiss Bank Corporation, and Credit Suisse were actively financing mines and often received their returns in the form of refined gold from Switzerland’s refineries, which were owned by these banks.
This synergy between banking and refining created a powerful network of business interests, which ultimately positioned Switzerland as a leader in the global precious metals market.
Yicai: Switzerland leads in setting global standards for the precious metals industry. Could you elaborate on Switzerland’s influence in international standards for gold and explain why the country has this authority?
CW: Switzerland’s unique position stems from being the only country with a dedicated Precious Metals Law, which governs the precious metals industry here. Since 1931, Switzerland’s industry has adhered to strict regulations concerning product quality throughout refining and transformation processes. These standards remain in effect today.
In recent years, we have been working to update this law to include sustainability and transparency requirements. An essential goal is to incorporate environmental, social and governance factors, making the supply chain more transparent, sustainable, and ultimately fairer.
We also maintain close collaboration with major organizations, including the World Gold Council, the London Bullion Market Association, and the Responsible Jewellery Council, among others. Those associations have been instrumental in advancing discussions on responsible gold standards, particularly around due diligence practices, industrial mining, small-scale operations, and recycled gold.
Yicai: What challenges might the Swiss gold industry face in the coming years as the market evolves?
CW: Switzerland’s future role will increasingly focus on sustainability and transparency. Switzerland is not the largest market and can only serve a limited segment due to higher costs compared to, for example, Indian refiners. Therefore, we need to remain highly competitive and demonstrate to the international market that our gold is ethically sourced.
This is Switzerland’s opportunity to show that it’s possible to maintain a reputable industry that adheres to ethical and reliable practices.
Switzerland’s role, moving forward, will be to prove that responsible business practices are possible within an industry that currently suffers from a tarnished reputation.
Editor: Tom Litting