Don’t be short CHF if metals are rallying
I cut my long EUR/CHF position yesterday for a tiny loss once the precious metals started rising. I don’t think it’s the right time to be short any of the commodity currencies (AUD, NZD, CAD or CHF) if precious metals are rising.
The USD will be the biggest loser out of this market phase whilst the EUR would also be expected to lose out on the crosses.
Hi Sean!
What commodity relation has the CHF? Chocolate? 😀
Too true Chris, or Holy Cheese 🙂 Never have understood why the CHF belongs with the commodity ccys but I’m not going to re-educate the market so best behave like a sheep and start bleating 🙂
My understanding is that the Swiss have more ounces of gold per capita then any other country in the world, by a significant margin.
http://www.contrarianinsights.com/gold-investment/top-10-gold-reserves-in-the-world-in-current-gold-stock-market-who-own-most-of-the-worlds-gold/
8. Switzerland
Switzerland has had a long association with gold. Swiss bank vaults are some of the most trusted in the world.
So Switzerland may be the eighth largest owner of gold in the world. On a per capita basis, however, it’s by far number one. In fact, Switzerland owns more than three times gold per capita than #2 Germany.
Switzerland Gold Reserve Facts
Gold Reserves: 1,146.5 tons
Market Value: $58.7 billion
Ounces of Gold Reserve per Capita: 4.796
Market Value of Gold Reserve per Capita: $7,673
Percent of the World’s Gold: 0.63%
Great stuff, thanks James
To add to James’s point, CHF was the last currency to leave the gold standard – not too long ago. Perhaps market still remembers those old good days :p
However, the franc stubbornly maintains its overvaluation despite GOLD price free fell recently.
USD/CHF did actually rally from near 70 to almost 100 in period where Gold fell from 1900 to 1200