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.
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.
Though you are in US, your name sound like you are from Canada/France? :-)
CommoditiesTrader
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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.
jangseohee
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OK
IvanLabrie
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I'm bullish on gold, intermediate and long term.
Short term, drop to 1250, as long as above 1217 it's very attractive.
CommoditiesTrader
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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.
jangseohee
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deflation cum recession
IvanLabrie
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I advised people I know to go long with physical gold and silver a while back.
Looks promising, particularly for silver.
but it is not nice to "blame" SNB..
gold is just overbought :-) with vertical price movement (a taboo to me)
tradingview.com/v/0fsypylM/