A shocking move from the Swiss National Bank reignited markets fears and caused investors to flock to gold as a safe haven. Switzerland’s central bank abandoned its long-standing floor against the euro which spurred colossal intraday moves for currencies.
The Swiss National Bank (SNB) also cut its interest rate on deposit accounts to negative .75%. The SNB decision is positive for gold because gold is now a positive yielding asset versus holding the Swiss Franc.
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, and the market is seeing mild selling emerge as the session winds down.
Silver rode gold’s coattails from a low of 16.58 in the overnight markets to a midday high of 17.24. Silver has since settled down into the $16.90 range going into the close.
The gold silver ratio currently stands at almost 74:1, making a gold for silver arbitrage swap very attractive. (See chart below.)
