Why is gold rising because of the Swiss franc's cap loss?

TreasureHunter

TreasureHunter

Well-Known Member
I understand the cap issue, but how can this thing be linked to gold so strongly?

The CHF is gaining strength, the EUR and USD are weaker in comparison with it, gold is rising.

There are so many other market forces involved: the strong dollar and the cheap oil are strongly deflationary. Oil is still cheap, didn't go up. I expected gold to go lower.

Instead, it jumped.

Why is gold rising?

Is it because the ECB is planning monetary easing, the Swiss wanted out, they cut the peg to the euro?

I am trying to understand the market's forces exactly...
 
I am trying to understand the market's forces exactly...
Click to expand...
Let us know when you understand. You'll be the only person in the world who does!

Gold rising because it's hit its bottom.
Because the Euro is looking doomed (again).
Because the US dollar has topped.
Because Russia hasn't backed down.
Because Oil is about to rise.
 
Has to be manipulation, just cause ;)

Also gold markets that move in correlation or invertedly to gold are good indicators to a point but dislocations do happen. Now only if the bond market started selling off we would be on the home stretch
 
JulieW said:
I am trying to understand the market's forces exactly...
Click to expand...
Let us know when you understand. You'll be the only person in the world who does!

Gold rising because it's hit its bottom.
Because the Euro is looking doomed (again).
Because the US dollar has topped.
Because Russia hasn't backed down.
Because Oil is about to rise.
Click to expand...

Everyone's confused. Default response - buy gold.
 
JulieW said:
I am trying to understand the market's forces exactly...
Click to expand...
Let us know when you understand. You'll be the only person in the world who does!

Gold rising because it's hit its bottom.
Because the Euro is looking doomed (again).
Because the US dollar has topped.
Because Russia hasn't backed down.
Because Oil is about to rise.
Click to expand...

:)

My logic was :):

USD up, gold down
EUR down, gold down
Oil down, gold down

But right now it's :(:

USD vs EUR up, gold up!!!
EUR down, gold up!!!
Oil still going down, but gold going up!!!


I'm perplexed.
I honestly never counted the CHF in, I considered it rather less influent on gold's price, even below the JPY.

I was expecting gold to dip to the 900-1,000 $ level, certainly below 1,100 $ soon. And instead, it's almost 1,300 $. It is above key support and it looks quite bullish.

But if this high doesn't reach the previous high (last year), then the next dip could be deeper than the previous dip.

I think all eyes are on the ECB now. We should watch: oil's price in USD, gold's price in EUR/USD/AUD and compare it with its price in CHF, watch closely if the ECB will start monetary easing.

I'm all eyes to see what's going to happen next week :/
 
It has everything to do this Switzerland and other factors......

Switzerland is detaching once again to be a "NEUTRAL" currency and country..... due to many reasons... economic and "war" economics(currency, derivatives, commodities, real WAR).....

There is a great reason why GOLD is rising..... there is a massive correction coming up very soon.... inevitably it will force the US Fed Reserve to print QE4 in massive amounts.... perhaps it will be a unified printing..... US, EU, Japan.....

How many other countries are RIGHT NOW REPATRIATING their gold and bring it back on SHIPS..... "certain" seas and ports must be very well "secure" these days to cater for such a expensive and security focused operations......

Perhaps a series of "interesting" news is ahead....in a short future..... remember, in a downturn of great magnitude... there is no country that will be spared.... but, neutral ones will be better off for common reasons.....


Have a great weekend.....


cheers

T10 :)
 
Not much on the media stream regarding Russia stopping gas to 6 european countries....... and the events keep on coming.......
 
Gold is a volatility meter. But not inherently, only by default given the current fiat economy. So when an economically stern country such as Switzerland runs away from the Euro it creates volatility or confirms to a degree that the system is becoming increasingly unstable, gold reacts. It's really as simple as that.

Gold will probably have no place in the world one day but for our lifetime and many lifetimes ahead of us I'm sure it will remain as it has for thousands of years and that is the closest object to a practical asset used for trading for goods and services. I think it comes from a need to trade an asset for goods or services that the receiver will see as value, or at least it's the closest match, as opposed to diamonds or oil. Gold being more practical than diamonds or oil as a global currency. It's pretty, shiny, and very durable which I'm sure has added to it's appeal.

When people say gold is a commodity not a currency that's not the way it's been for thousands of years, just hundreds. Thanks to technology, military power, nice suits and well written speeches. But the cracks have been showing for a long time now in the global economy and they are getting worse and worse.

Granted if the people who ruled the world planned it a bit better back in 1944 maybe gold wouldn't have a place in todays economy, maybe it would only exist in jewellery stores. But they didn't plan it perfectly, or maybe it's something that just can't work. A global fiat economy that is. I believe it was doomed the minute it was unpegged from the dollar in 1971, that gave central banks free reign to print as much money as they wanted, which was never going to end well. Not when there needs to be an underlying asset or capital to back everything up because at the end of the day the whole thing is just leveraging and that's why fiat doesn't work as there is an endless supply and debt is just racking up and up. If a fiat economy is to be sustainable it needs to be backed by something and the closest thing is gold as proved over the last 6000 years.
 
Have a think about this situation for a minute.

We sit here reading news that the SNB has removed the peg of the Franc to the Euro, and ostensibly, we have a flight of fear into... gold.

Stop and consider - there has been considerable debate on here of what is likely to happen in the event of a currency crisis, global financial crisis, currency crisis etc.

Now consider the severity of that type of event compared with the one we have just witnessed.

You can quickly draw your own conclusions as to what might happen in the event of a truly major crisis based on all of this.
 
TreasureHunter said:
I understand the cap issue, but how can this thing be linked to gold so strongly?

The CHF is gaining strength, the EUR and USD are weaker in comparison with it, gold is rising.

There are so many other market forces involved: the strong dollar and the cheap oil are strongly deflationary. Oil is still cheap, didn't go up. I expected gold to go lower.

Instead, it jumped.

Why is gold rising?

Is it because the ECB is planning monetary easing, the Swiss wanted out, they cut the peg to the euro?

I am trying to understand the market's forces exactly...
Click to expand...

Here is one theory that the SNB was short gold from Sept 6, 2011 (the peak of the gold price in USD). It's a Mystery is one of the best analysts I have ever read. In February, 2013, he/she posted the correlation between the $/yen & gold.


To paraphrase the old E F Hutton slogan, when It's a Mystery writes, people should listen

http://news.goldseek.com/GoldSeek/1421424060.php

Other articles in late 2014 in which It's a Mystery is turning bullish again on pms.

http://news.goldseek.com/GoldSeek/1418310094.php

http://news.goldseek.com/GoldSeek/1416319200.php
 
Pre-emptive move ahead of next week's ECB meeting and that raises the pressure on ECB to implement its QE plans, says Mark Mobius, Executive Chairman of Templeton Emerging Markets Group. Link

Also rumours in Frankfurt that Dr. Jens Weidmann (President of Bundesbank) has called Angela Merkel, urging her to leave the Euro.
 
House said:
Pre-emptive move ahead of next week's ECB meeting and that raises the pressure on ECB to implement its QE plans, says Mark Mobius, Executive Chairman of Templeton Emerging Markets Group. Link

Also rumours in Frankfurt that Dr. Jens Weidmann (President of Bundesbank) has called Angela Merkel, urging her to leave the Euro.
Click to expand...
There's some seriously troubling economic and market indicators showing up. Throw in the Euro turmoil and we may be building up to something major.
 
TreasureHunter said:
I am trying to understand the market's forces exactly...
Click to expand...

Well when there is more buyers than sellers, the price will tend to go up

And when there are more sellers than buyers, the price will tend to go down



i gave up on trying to link market forces with logic a while ago now
Massive financial crisis, zero interest rates and money printing led to U.S. stock market at all time high
Property prices in a country with no shortage of land at insane price levels
Go figure
 
1646_its-only-logical-thumb.jpg
 
House said:
Pre-emptive move ahead of next week's ECB meeting and that raises the pressure on ECB to implement its QE plans, says Mark Mobius, Executive Chairman of Templeton Emerging Markets Group. Link

Also rumours in Frankfurt that Dr. Jens Weidmann (President of Bundesbank) has called Angela Merkel, urging her to leave the Euro.
Click to expand...

The Germans will never leave the Euro. If they did a BMW would cost the same as a Rolls and a BMW manufactured Rolls would make a son of the house of Saud blush when they saw the sticker price.

They could start the Deutschemark mk4 and deliberately devalue it but them your where you are now without the advantages of homogenous intra European currency trade. Sure, you might not have to give up free trade just because your using different currencies but it adds all sorts of added complexity because if Germany and Greece leave the Euro you know others will jump ship and before you know it VW have to keep track of 20 currencies in an area the size of WA.

Don't forget how wildly expensive, disruptive and domestically politically risky a currency change over is as well.


Financial concerns are only half of it, the Euro is as much a political animal as a monetary one. Things would have to get pretty bad before they gave up on the dream of one Europe. Germans are big on that for some reason :)
 
The Euro is entirely political, that's its problem.

Of course... This might have been a coordinated move between the Swiss central bank and the ECB. After all, a depreciation by removing this floor might avert / defer the need to start bond and asset buying by the ECB to loosen the euro.
 
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