On May 7, 1999 Britain's Chancellor of the Exchequer, decided to sell 60% of the country's gold reserves. The price of the shiny stuff had been in decline for nineteen years, falling from it's January 1980 high fix of $850 (I seem to remember an $875 print in Hong Kong, but it was a long time ago) to $282.40 on that May Friday.
Not only did Brown decide to sell after a 67% decline, HE ANNOUNCED HIS INTENTIONS IN ASVANCE.
Market players did their thing and gold dropped to $252.80 on July 20. Eventually he sold off half of Britain's gold reserves, 395 tons, over the course of 17 auctions from July 1999 to March 2002, at an average price of about $275 per ounce.
Kitco's 24-hour gold is currently at $1162 with the futures at $1164.20.
The Swiss on the other hand...
From MarketBeat:
The Swiss National Bank is once again at the center of the currency markets, with London-based traders at two banks saying the SNB has been dumping some of the euros it hoarded during this year’s aggressive but ill-fated intervention program.
The euro is generally climbing at the moment as other investors continue to close their negative bets on the currency and express their nerves over the U.S. economy instead.
However, London traders said the SNB has been a steady seller of euros against the dollar over the past 10 days, likely limiting the scale of the single currency’s ascent. The central bank declined to comment.
The SNB launched a heavy-duty program of euro buying earlier this year in an effort to hold down the soaring Swiss franc. The bank’s official reserves more than doubled from the end of last year to the end of last month, reaching 226.7 billion Swiss francs by June 30. In May alone, the SNB scooped up the equivalent of almost €60 billion, equal to around 15% of the country’s entire annual economic output.You will note that the two situations are completely different, in Britain's case it was "diversification" in Switzerland's an emergency attempt to prevent their currency from strengthening to the point that it destroyed the countries export and tourism businesses which account for something like 60% of Swiss GDP.
The bank’s efforts may have limited the franc’s ascent, but the currency still smashed through a series of record highs against the euro, which dipped under 1.31 Swiss francs in early July. It has since bounced back to around 1.38 Swiss francs....MORE
And yet, the SNB managed to not sell their accumulated euros at the nadir.
You play the hand you're dealt and sometimes you lose but you don't have to set what became known as a "Brown Bottom".
Here's the three month chart, from Yahoo Finance:
Mr. Brown went on to become Prime Minister of Great Britain.
