Just when it looked like gold had exhausted its move to the upside, an entirely unexpected market event gave it new legs in today’s trading session. A shocking move from the Swiss National Bank reignited markets fears and caused investors to flock to the safe haven appeal of gold. Switzerland’s central bank abandoned its long-standing floor against the euro which spurred double digit reactions in the CHF and EURCHF, colossal intra-day moves for currencies. The SNB also cut its interest rate on sight deposit accounts to negative .75% and the forward swap curve is in negative territory up to eight years out now. The SNB decision is positive for gold because the yellow metal is now a positive yielding asset versus holding CHF. Upon the Swiss National Bank news release, gold jumped through double top resistance at $1,244.50 and then had even more stops triggered at its 200 day moving average of $1,253.50. Its high on the day is $1,267, a 61.80% Fibonacci retracement level, and the market is seeing selling emerge as the session winds down. Volume on the electronic exchange for the active February contract is over 250,000 lots, the second highest volume day of the contract. With gold moving up $100 this year so far, it would not be surprising to see some consolidation around these levels in the near term. Bobs additional comment: Interesting that Fed chair Yellen has postponed raising rates to some undetermined point in the future. For nearly a decade Japan has been blazing the trail of money creation amongst the western banking cartel with the SNB now forced to fall into line. Do the Swiss have any choice? I maintain that the cartel has painted itself into a corner with no exit strategy. Expect continued money creation to prop up markets and asset prices, more of the same. Is there another option? The charade abruptly ends when confidence in fiat currencies has completely evaporated. How can a standard of exchange that is created in infinite amounts have any value? Someone please explain! Think of how much a trillion dollars is and then imagine hundreds followed by thousands of trillions and then you arrive in Zimbabwe. I dont see how this ends well. For now a $20 still buys something...........an accelerating race to the bottom is what we appear to have. Sent to me this am By a dear friend of min Robert Hallam
Posted on: Thu, 15 Jan 2015 22:11:47 +0000
Trending Topics
Recently Viewed Topics
© 2015