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How does Swiss relate to Gold?
Posted: Sat Nov 20, 2010 10:57 am
by oem7110
The correlation between Swiss currency and Gold is high, does anyone have any suggestions on how Swiss currency relate to Gold together? Does someone use Swiss to purchase Gold? or use Gold to purchase Swiss?
Thanks in advance for any suggestions
Eric
Posted: Mon Nov 22, 2010 10:22 am
by drm7
Both CHF and EUR are currently correlated with Gold as an "anti-dollar" trade, although, paradoxically, EUR is a proxy for risk-taking and CHF is a proxy for safety. This relationship implies that EUR may decouple from gold as the macro concerns around Ireland, Spain, Greece, etc., put pressure on the currency (the same way that QE2 put pressure on the dollar.)
CHF may track gold more closely, because it is seen as the "safest" non-dollar currency. When people get nervous, they buy gold and Swiss Francs.
Of course, the charts are already telling us all of this, aren't they?
Posted: Mon Nov 22, 2010 11:11 am
by oem7110
drm7 wrote:Both CHF and EUR are currently correlated with Gold as an "anti-dollar" trade, although, paradoxically, EUR is a proxy for risk-taking and CHF is a proxy for safety. This relationship implies that EUR may decouple from gold as the macro concerns around Ireland, Spain, Greece, etc., put pressure on the currency (the same way that QE2 put pressure on the dollar.)
CHF may track gold more closely, because it is seen as the "safest" non-dollar currency. When people get nervous, they buy gold and Swiss Francs.
When economy gets inflation, does the price of gold rise too?
but Swiss Francs does not rise.
So do you have any suggestions on how to tell what happen in economy is among the relationship between CHF, EUR, USD and Gold?
Thanks in advance for any suggstions