Profit of Swiss central bank rises due to increase in gold prices

(Patria) - The Swiss central bank on Friday reported a profit of 12.6 billion Swiss francs ($15.7 billion) for the first nine months of 2025, driven by a sharp rise in gold prices and stock market gains, AFP reported.

The Swiss National Bank's gold reserves remained unchanged, but their value surged as investors rushed to buy the precious metal, with economic and geopolitical uncertainties driving prices to record highs.

At the end of September, the price of a kilogram of gold stood at 98,024 Swiss francs, compared to 76,011 francs at the end of December 2024, representing a valuation gain of 22.9 billion francs for its gold reserves, according to a statement from the Swiss National Bank (SNB).

The SNB recorded a gain from equity securities and instruments prices amounting to 23.1 billion Swiss francs. This gain helped offset foreign exchange-related losses totaling 46.3 billion francs.

Like gold, the Swiss franc is considered a major safe-haven asset. Amid a climate of uncertainty, the Swiss currency has strengthened significantly since the start of the year, especially against the dollar.

In 2024, the SNB's profit reached 62.5 billion Swiss francs after the first nine months, then rose to 80.7 billion francs by the end of the year.

Arturo Bris, a professor of finance at the International Institute for Management Development in Lausanne, expressed concern about a potential artificial intelligence technology bubble.

According to his calculations, using data from the U.S. Securities and Exchange Commission, shares of just six technology companies (Nvidia, Microsoft, Apple, Amazon, Alphabet, and Meta) account for more than $48 billion in the SNB's portfolio.

To diversify its reserves, the Swiss central bank's equity portfolio uses a passive strategy that reflects stock market indices, rather than selecting stocks to generate profit.

These six major stocks alone are responsible for a very large portion of the U.S. stock market's growth, Bris said.

"As an economist, you cannot talk about a bubble before it happens," only when it bursts, he told AFP. However, "there is a significant overvaluation of these stocks," and if artificial intelligence is a bubble that bursts and causes a crash, "the risk is very high" for the SNB, he warned.