* Support for gold proposal slips to 38 pct from 44 pct in
* Opposition at 47 pct, up from 39 pct in Oct poll
* Swiss franc weakens to day's low vs euro after poll
(Adds detail, quotes)
By Katharina Bart and Jan Harvey
ZURICH/LONDON, Nov 19 Support among Swiss voters
for a referendum proposal that would force a huge increase in
the central bank's gold reserves has slipped to 38 percent, an
opinion poll showed on Wednesday, falling short of the majority
backing it needs to become law.
Under the "Save our Swiss gold" proposal, the Swiss National
Bank (SNB) would be banned from selling any of its gold reserves
and would have to hold at least 20 percent of its assets in the
metal, compared with 7.8 percent last month.
More than 50 percent need to vote in favour in the Nov. 30
referendum for the proposal to succeed.
Wednesday's poll, conducted by Berne-based research
institute gfs.bern in partnership with Swiss broadcaster SRG,
showed 47 percent opposed the initiative, which has been led by
the right-wing Swiss People's Party, while 15 percent were
undecided or gave no answer.
Support for "Save our Swiss gold" was down from 44 percent
in a survey conducted last month, also by gfs.bern.
The proposal has set gold and foreign exchange markets on
edge and drawn fire from the SNB itself, which has bristled at
what it says would curb its ability to set monetary policy.
The central bank faces the biggest test of its cap on the
Swiss franc in more than two years, which it has vowed to defend
in foreign exchange markets to keep the currency from
strengthening beyond 1.20 per euro.
Supporters of the proposal say it would secure a stable
franc but the SNB and government have said a "yes" vote would
raise unemployment and the risk of recession.
The Swiss franc weakened to the day's low of 1.2027 per euro
after the poll results were published.
SNB WARNS AGAINST YES-VOTE
Central bank Chairman Thomas Jordan said before the poll was
released that he foresaw problems if the initiative were to
pass. "The SNB couldn't fulfill its mandate of securing price
stability or buffer major shocks to the economy as well as it
currently does," he said in Wednesday's edition of Zuercher
Oberlaender, a regional Swiss newspaper.
According to data from the World Gold Council, Switzerland
is the world's seventh largest official sector gold holder ahead
of Russia and Japan, with reserves of 1,040.1 tonnes, worth 38.5
billion francs ($40.21 billion) at today's prices.
It sold substantial quantities of gold in the early years of
the 21st century, with its reserves declining from 2,590 tonnes
in early 2000 to their current levels by mid-2008.
LBBW commodity analyst Thorsten Proettel said the proposal
was unlikely to become law. "The chairman of the Swiss National
Bank has spoken against the referendum, and I think the
necessary 50 percent vote will not be reached," he said.
Deutsche Bank said in a report last week that a "yes" vote,
while possibly giving some immediate lift to gold prices, would
not necessarily benefit the metal in the long term.
The SNB could spread out its gold buying, take transactions
off market, or use derivatives to cushion prices from the impact
of a "yes" vote, Deutsche said.
Spot gold prices were down 1.5 percent at 1614 GMT at
$1,179.76 an ounce.
(1 US dollar = 0.9574 Swiss franc)
(Additional reporting by Anirban Nag; editing by David Stamp)