The past four months haven’t been particularly kind to gold prices, and by extension, haven’t been kind to owners of the SPDR Gold Trust (GLD).

All told, the gold price level is presently 13.2% below its July peak, and with the commodity as well as the GLD ETF having broken below a key support last Friday, it seems like things could get (much) worse for gold prices before they get better.

There’s a light at the end of the tunnel, however, for fans and owners of gold who can wait a few years for gold price levels to rebound. Hope is possibly coming in the form of mandated buying from the Swiss government. It seems the country’s citizens are pressuring their leaders to order the nation’s central bank to repurchase all the gold it sold between 2000 and 2008.

Why? The same reason most people buy gold: Holding any particular currency is risky, but gold holds its value no matter how turbulent the currency landscape gets.

The assumption about gold’s perpetual safety isn’t an entirely accurate one; gold prices can and have fallen in all sorts of environments. To the Swiss, though, the maneuver at least feels like a step toward greater stability.

The key question anyone who owns gold or the GLD ETF is asking now: Can the Swiss National Bank buy enough gold to actually move the dial on gold prices?

Not quite, but it’s a good start all the same.

Save Our Swiss Gold

None of this is a joke. Early in the year, the wheels of the so-called “Save Our Swiss Gold” initiative were put into motion, and on November 30th the country will vote on whether or not it wants to require its government’s central bank to at least hold 20% of its assets in the form of gold.

Seeing as only 8% of its current assets are gold-backed, should the initiative become law, the Swiss National Bank would need to buy — or rebuy — approximately 1,500 tons of gold over the next five years.

The twist is, while the Swiss National Bank will not only be required to buy more gold should the initiative become law, the central bank will then never be allowed to sell it (barring a change to the law, which presumably would also require a vote).

Crazy idea or not, the “Save Our Swiss Gold” has supporters. Though the 38% of the nation’s voters in support of the law won’t be enough to pass it, it’s interesting how even that much of the populous was interested in directly affecting the nation’s monetary policy.

Current Gold Demand Landscape

Is 1500 tons a lot? For perspective, the World Gold Council reported that in the second quarter of this year, total demand/consumption of gold was 964 tons, and that was a fairly typical quarter.

The average quarterly demand over the past four quarters (and bear in mind gold has been relatively cheap over the past twelve months) has been 947 tons. The strongest quarter of gold consumption we’ve ever seen was the third quarter of 2011, when the world purchased 1219 tons of the commodity.

In that light, yes, 1,500 tons is a lot of gold for the Swiss National Bank to buy should the “Save Our Swiss Gold” dream become a reality. Bear in mind, however, that the bank would not actually buy all that gold in one shot, nor would it want to.

Why? For starters, such a surge in demand would send gold prices through the roof, pushing the gold price out of reach for the bank and thus defeating the purpose of the plan.

Additionally, given that the Swiss National Bank would need to sell other country’s currencies in order facilitate the repurchase of gold, the global currency disruption could cause more harm than benefit. To do it right with minimal disruption, the Swiss central bank would need to pace its buying over the suggested five-year span.

Assuming little else changes on the gold demand front, over the course of the next five years we’re apt to consume 20,000 tons of gold. The Swiss National Bank would theoretically add 1,500 tons of demand on top of that, implying a 7.5% increase in total gold demand. It’s not a lot, but it’s more than a little.

Bottom Line for Gold Prices

Although the “Save Our Swiss Gold” initiative is most likely not going to become law, it has planted some seeds for such efforts in other countries. Many of those initiatives will also end up failing to win approval, but like any political effort, change can and does take place over time after multiple efforts.

So, while it’s unlikely gold prices will soar on the heels of new Swiss demand at the end of the month, don’t be surprised to see more such initiatives pick up speed in the foreseeable future. If two or three decent-sized central banks take this kind of action, it should make a bullish dent in gold prices and instruments like GLD ETF.

It’s going to take time, though.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.