Is the Swiss Franc to Blame for Gold's Pullback?

CME:S61!   Swiss Franc Futures
The Swiss franc             is lower on the day amid speculation that the Swiss National Bank (SNB) will intervene in the foreign exchange market in order to actively weaken the currency.

As you can see by the comparison, gold             tracks the Swissy rather closely. Interestingly enough, gold's all-time high of $1,923 ended at about the same time the SNB decided to peg their currency to the euro             . When the peg was first introduced, the single-largest daily inflow in the GLD             occurred but had been wound down throughout the last few years. Traders matched that inflow into the GLD             when the SNB pulled the plug on the peg.

However, I think the SNB is playing with fire. They have already taken a 60 billion CHF hit to their FX reserves due to the abrupt end of the euro             peg. Furthermore, it became too expensive to keep the peg on the euro             , so the SNB will likely hint at intervention as a means to keep traders from piling into it. This could work in the short-term, but these methods usually do not have lasting effects. With a balance sheet of almost 90 percent of GDP, the SNB's bluff will likely be called out in the long-run.

The franc has been a "safe" haven for investors, whether the central bank likes it or not. If global turmoil continues to strengthen, I expect the franc, and presumably gold             , to increase throughout the year.

Keeping in mind, there is a 40 percent weekly appreciation that has to be digested.

The correlation should be watched further.
In the end, with all major central banks actively printing like mad only gold and silver will be left standing as money that holds value
afbitcoins afbitcoins
and perhaps crypto currencies too ;-)
interesting co-relation
but it is not nice to "blame" SNB..
gold is just overbought :-) with vertical price movement (a taboo to me)

+1 Reply
Hahah, haters be hatin' Near-term, I agree. However, look on the longer-term charts. Far from oversold. The daily is not even oversold anymore :D Also, I published an article on my site that I expected price action to reenter the trend channel on the daily. Now, if it breaks through that, $1,224/14 most likely.
jangseohee CommoditiesTrader
Though you are in US, your name sound like you are from Canada/France? :-)
+1 Reply
French-Canadian on my father's side. Traced it back to Normandy 1600s lol. Although, I have a lot of Irish, English and some native America. Bit of a mutt really.
+1 Reply
jangseohee CommoditiesTrader
IvanLabrie CommoditiesTrader
I'm bullish on gold, intermediate and long term.
Short term, drop to 1250, as long as above 1217 it's very attractive.
+1 Reply
True. I'm long physical, but try to remain flexible in paper markets. Please check out my article I posted above. I believe if it holds within the channel, things are good. Being that gold was up nearly 9 percent this month, the economy bulls are cringing. This is expected. Global data still sucks.
+1 Reply
jangseohee CommoditiesTrader
deflation cum recession
+2 Reply
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