Gold Surges In Tumultuous Week - XAU/CHF Up 5.5% WTD On Intervention And Euro Peg Concerns

Tyler Durden's picture

From RanSquawk

Gold Surges in All Currencies in Tumultuous Week - XAU/CHF Up 5.5% WTD on Intervention and Euro Peg Concerns

Gold has fallen today in all major currencies except the Swiss franc which has fallen on continued speculation of pegging the Swiss franc to the euro. Gold is trading at USD 1,754.30, EUR 1,232.10, GBP 1,078.70, CHF 1,349.30 per ounce and 134,357.00 JPY/oz. Gold is 5.1% higher in dollars week to date and 6% higher in euros and 6.6% higher in pounds or to put it correctly these currencies have fallen in value against gold.

Cross Currency Rates

Gold’s London AM fix this morning was USD 1,755.00/oz, EUR 1231.23/oz, GBP 1077.35/oz and gold fell sharply after the fix.

As we said yesterday there is a risk of a correction in the light of the CME margin increase but smart money is positioning itself to buy on the dip.

Physical demand for gold internationally remains robust - especially in Asia – which will support gold. This is seen in the premiums remaining elevated in Singapore and Hong Kong. Gold's discount in Tokyo fell to its lowest since the end of 2010.

UBS confirm this morning what we have been experiencing in terms of increased customer demand for gold and an increasing preference for allocated gold. 

UBS note that “the move to real assets such as gold in physical form signifies the heightened state of risk aversion at present.”

“The gold market remains underpinned by the movement to physical gold, which has persisted all week    . . .  European demand for small bars particularly, but also coins, remains very strong. As the week has progressed Asian physical demand, outside India, has been noticeably higher.”

The Swiss franc has fallen by another 0.4% against gold today and is down 5.7% week to date against gold. 

Pegging the franc to the euro would take time and would face steep legal and political hurdles – a change to the Swiss constitution would be necessary to begin with. 

Gold in Swiss francs – 5 Day (Tick)

A peg may not work as the SNB would have to provide liquidity to defend the peg and history shows (such as the European ERM) that pegs are rarely successful in the long term.

The Swiss franc’s reputation as a safe haven is gradually being lost and if a government and central bank are determined to debase their national currency and ensure it is a not a global safe haven then it is within their powers to do so.

Gold on the other hand has been empirically shown to be a safe haven and monetary asset.  

Swiss Francs Performance against G10 and Gold 

Unfortunately, many today know the price of everything and the value of nothing. Gold's value is that it is a safe haven asset. These are not the claims of a vested interest but an empirical fact backed up by much international academic research including from Trinity College Dublin's Dr Brian Lucey and Dr Constantin Gurdgiev.

The wise old adage that you "put 10% of your wealth in gold and hope that it does not work" has never been more apt.

Indeed, many would argue that given the scale of the global debt crisis and the real risk of contagion, that allocation could be higher. 

For the latest news and commentary on gold and financial markets follow us on Twitter.

Silver is trading at $38.32/oz, €26.85/oz and £23.56/oz. 

Platinum is trading at $1,791.20/oz, palladium at $740/oz and rhodium at $1,775/oz. 

Spot gold reverse early losses on econ worries

Rush to gold shakes up staid French market

Gold Pares Best Week Since 2009 as Equities Rally, Contract Margins Rise

CME: Comex gold margins hiked to protect investors

A rush for gold trusts in the market maelstrom

(The Economic Times)
Asia physical gold demand strong; Tokyo discount falls

40 Years on from Gold Standard, Bugs Crow

(The Irish Times)
Charlie Fell: Economic environment near perfect for gold to shine

(King World News)
Dan Norcini: What to expect after short covering and margin hikes

Bob Pisani: Should the World Go Back to the Gold Standard?

Ted Butler on Silver - The Public Be Damned

Precious Metals Rising Like a Hot Knife Through Butter -

(The Telegraph)
Desperate Swiss eye euro peg to repel safe-haven flood

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dwdollar's picture

One good thing about the mo-mos believing all is well now.  They aren't stampeding toward zerohedge's servers.  At least it's a break anyway.

Sudden Debt's picture

I don't care about the PM price. All I care for is how much I can add this month and the next month and the next month....

The system will break. When? I don't know. Will it take decades? No.

Did I lose money in total? No, I already made a hughe profit.

Did I buy when silver and gold dropped 2 weeks later? Yes. Did it all recover after a few months? Yes.

I speak in gramms, kilo's, not in Euro's or dollars. I know exactly how much silver and gold I have, but if I want the know the dollar or euro vallue I'll need a calc. and I don't really bother doing that.

My next goal? Add 10 more kilo's of silver by the end of this year. Worst case scenario it will take untill feb. 2012...

And whenever gold or silver goes down, I do one thing and one thing only: I SAY THANK YOU!


DosZap's picture

"Indeed, many would argue that given the scale of the global debt crisis and the real risk of contagion, that allocation could be higher." 

    In light of the implosion,anyone with just 10% in their portfolio's are at risk of losing 90% of their wealth.

Yeah, I think(Doh), that could be higher  is not even a question any intelligent person would have to give a second thought to.

rubearish10's picture

Had to edit.....why not get to the full scope of the currency problem etc..

The Swiss franc’s, USD and JPY have a reputation as a safe haven and is gradually quickly being lost and if a government and central bank are determined to debase their national currency and ensure it is a not a global safe haven then it is within their powers to do so.

Mercury's picture

Hey SNB: If CHF appriciation is killing you buy gold and hard assets with that inflated currency (like a company would with it's pricy stock).   In a total collapse scenario you'd own real stuff with real value and could pay dividends to your citizens and corporations if need be.  If you play your cards right you can probably make up for a lot of losses on your subordinate banks' Bulgarian mortgage portfolios too.

He who defects first (from fiat) defects best! 

I understand that would present it's own set of problems but comapred to buying EUR or pegging to EUR.....come on!

Oh regional Indian's picture

These gold days feel just like those pesky silver days a few months' ago. 

Set up for a huge down-swing. And no one is talking crude? I mean eveyone is talking crudely, but no headline is screaming the movement in crude?

hmmmmmm........ looks more and more like the cone is sitting on it's apex.


thesapein's picture

Yeah, no, black gold doesn't behave the same under deflationary pressures tho certainly inflation... And do we think emerging markets are still going to emerge? My amatuer guess is that crude will take more hits before suddenly "emerging" to new highs in dollars and relative to what the US is accustomed to.

Speaking of silver, that's the one no one is talking about this week. JPM goes long gold according to its desk whilst they are still shorting on the futures of both metals? Seems to me the attention is intentionally on gold and NOT silver. I know, supposedly silver is still thought of as more of an industrial metal and is priced as such still.

Anyhoot, I'm thinking now is perfect to sit on or pick up more of this precious silver priced as industrial, wait for it to catch up to gold, maybe it will overshoot, then trade much of it into gold and ride that wave. Both metals are nearly a sure thing, but they will dance relative to one another, so why not play the ratio on the way up?

Sequitur's picture

Believe me, I felt the fear this week. Loading up on more gold. I got everything out before this latest crash, watched from the sidelines, and fuck if the currency markets and central bankers didn't give me a heart attack. Even if gold gets cut in half from here, I will not care, the peace of mind will be more than worth it to me. We're making plenty of fiat in the "real" world, but goddamn you can see Bernake, ECB, Japs, China all looking to line their pockets at the expense of the masses.

Hurry up with me gold orders!

thesapein's picture

But isn't gold looking expensive right now compared to silver? I mean, if you have a disciplined buying routine, sure, stick to it for gold, but like you said, gold is very popular right now and looks to have a pullback before going higher. But silver is lagging, hello, so it's the better buy, right? You can always trade your silver for gold later, after silver has done some needed catching up, at which point gold will look cheaper relative to silver.

thunderchief's picture

FU jesus christ..

You don't even deserve you name in capitals...

I took drum lessons from one of you losers in the seventies, and I still can't play for shit...  So why should I take your advice on the pm's today..?..

Get with the program and buy the the physical...

for jesus real christ, east coast, early 1970's, led zepplin, madison square garden, 1973, mohammed..911.. afghanistan..tea party... cheecha smokin sensanmilia....

Just buy the dip, and keep buying the physical...



thesapein's picture

But I already traded pretty much everything I had for physical silver two years ago. I don't have anything else to trade for more physical.

I'm not offended by your hippie days, whatever.

ella's picture

How can we tell the difference between gaming an investment with speculative market manipulation and true value?  Why would this commodity be any different?  Just wondering?

Sequitur's picture

Central banks -> buying the element like mad. Also, Bernake. End.

thunderchief's picture

You crazed "Baitard". 

I want to create a new 21'st century termonology for the "local"...

From Websters... A "Baitard"  is someone with intellect, Ideas and a foundation for revolutionary ideas, which is quickly and violently scrapt for the better  of sheeple humanity, which would rather text and paste such ideas than think of them.. 

The "Baitard" is the new generation which "goes with the flow rather than getting fired or not being in the "loop".." 

Introducing the the 21st century next new generation "Baitard".  If you see it in in Websters, I hope you remember where it really came from.. The Baitard...

Welcome to the 21st century.

thesapein's picture

True value is more reflective over longer time periods and is more easily seen in the final product. Since gold is so popular in the raw, we all hold it as a speculative decision for future usage. Unless you're buying gold to use in a product, whether it be high tech or just a cell phone, you're a speculator when you buy gold.

True value is really too complicated for any one person to see and requires group decisions, no? Real stuff has objective value. No matter subjective whims, the physics and chemistry of gold make it extremely useful for clever creatures like us and probably others in the galaxy.

But relative to silver, gold is trading above it's true value right now, don't you think? I can't stop with silver right now, as every post of mine seems to mention it, sorry.

DosZap's picture


"Unless you're buying gold to use in a product, whether it be high tech or just a cell phone, you're a speculator when you buy gold."

I disagree, from my perspective, and I would imagine many others here, I hate that I AM FORCED to buy GOLD, or SILVER.

I do not do it based on Speculation, I do it as strictly  as an INSURANCE policy.Because the PTB have screwed up the worlds currencies,economies, and I refuse to not at least TRY to retain some of the wealth I have saved all my life.(not from greed, but from /for self preservation.

Speculate?, yeah, I wished....................Traders Speculate, physical holders do it (IMHO) primarily for insurance, not an investment anymore.

Where's the upside?, it goes up in value related to what?, a devaluing fiat POS,and a world gone crazy.

All here I would bet, would like nothing better than to go back to a "normal" life, whatever that normal is or was for them.

I know I would, this crap will make you sick, and kill you,on a long enough timeline,the human brain/mind can only take in so much stress before the effects show up all over your life, and body.

Seeing a huge problem, and not being able to do ONE damn thing about it, is murder for folks that are used to seeing problems, and solving them,and moving to the next.

This is one NONE of  us can control, or solve.It's not in our power.

thesapein's picture

Not to presume anything about you, but for me, around the time I would say I was really waking up fast, two years ago, my attitude was similar to what you wrote. I started getting sick more, too. However, a year ago, I woke up to much more. I haven't had a cold sense. My scliosis is nearly gone (mine was bad enough to wear a brace in high school and almost had surgery). I look at least ten years younger. Even with the chemtrails getting more frequent above me, I starting to think, well, aging just has to do with what you said and nothing else, no genetic programming, nothing necessarily natural about failing, I mean, if all sperm believed there was no point in trying to make it to the next level. I'm surrounded by a failing, aging population that takes illness and death for granted, yet my own experience says that there is another option. And this time, I'm not talking about silver. 

thesapein's picture

I dislike (hate is so strong) people who hate buying gold and silver. What? You're saying you want to go back to using the dollar? I love the metals and love using them. The dollar never had me the same way.

thunderchief's picture

Thank's Jesus Christ,

It's nice to hear from someone who has a some what level head, and is at least the creator of the universe.. 

So thanks.. From all of us..We are your staunchest the End..

I just want to tell you from all of us, from the KOA camps, to the  Pimco Brown Shirts Society,  and at some point , to the "Knew Generation"  (We are still working on how this is  going to work out, but we have a Chinese National, a North Korean, and my Wife!!, who speaks all East Asian languages. (She's  a PHD from the old school!!!), to bring on this new foundation of inwardly directected "give it all up for the home team". 

Washington has been our biggest home team supporters, and even sent thier own umpire for our 5-12 Little league team,  ensuring that those with diabetes and ADHD, will not in the least way be discrimited against...   Thank god and god bless America..

I want you to know that I can always be contacted night or day ( but preferablly after 9am and before 3 pm at the the YMCA payphone 414-322-5666...just say hey "hot pocket" and then start breathing heavily until a response... You'll get a Sara Palin.. "you becha...."

Love Ya Jesus Christ...

Your the best...

Hope you get into office in 2012..




thesapein's picture

I'm guessing my chosen icon offends thee for some reason?

Doubleguns's picture

Its alive!!! Trying to create a frankenEuro seems....well....stupid...for the Swiss. Can they say inflation monster. Everyone run the frankeneuro is coming to eat your money away!!!

dwdollar's picture

I know.  Why bother having a separate currency?

DosZap's picture


Yeah, you know they call a child born outside wedlock a Bastard.

The Swisse joining the Euro would truly be a bastard child, why ANY mation would want to hook into that currency is beyond me, it's a harpooned whale, getting ready to be deboned.

Good thing it would require a Const Amendment, hopefuly the Swiss are not so STUPID as to allow this.

janus's picture

i love these adages i'm always finding around finance...that was cute, "...put ten percent in and hope it doesn't work."  kind of the opposite of tithing.

DosZap's picture


"...put ten percent in and hope it doesn't work." 

Two totally separate issues, and trains of thought, and purpose.

Safe haven, hoping all's well, and you never HAVE to use it.(Like life/health insurance)

janus's picture

yeah, i got it, that's why they work by opposite means:

@John 3:16

technovelist's picture

This is from GoldCore, not ransquawk.


Debt Rolling's picture

Yep. Tyler makes a lot of spelling mistakes these times... he probably does not sleep much.

thunderchief's picture

In Dubai,

I have heard they are turning down customers and limiting orders right off the radio.  Will have to venture down to the gold sukeeyaki and take a lookee for myself.  Real news is the best news..  The rest is just,.. just...News???

Franken_Stein's picture


David Rockefeller confronted at Santiago de Chile Airport:

Viva la revolucion !
Viva Salvador Allende !
Venceremos !


thunderchief's picture

Salvador Allende is Dead!

He was replaced by our longo losto friendo Bendo... Pinoche.

Viva Americana, Viva Seal Team Six...

Viva everything north of the 38th Parallell...

Nostradumbass's picture


Check out this article posted by Geoge Maniere regarding the suppression and attempted destruction of gold value. Apologies for the length but I thought it worthwhile



On Wednesday August 17th the CME came out with an announcement that they would be raising margin rates on the purchase of future contracts on gold. They reported that this was an effort on their part to cool off the price of gold which has enjoyed a parabolic run since August 1st. They said that there would be more rate hikes to protect gold from becoming a bubble. When I read this I laughed at the arrogance of the CME. There is only one reason that that they want to stop gold’s parabolic run. They simply do not have enough gold to fulfill the future contracts that they have already sold. Let’s not forget that one future contract is sold in lots of 5,000 ounces. That means if we use a proxy price if $2,000 an ounce, to make the math simple, we are talking about $10 million for one contract. Add to that, the CME gets a fee of $50.00 an ounce above the spot price, so for every contract sold they earn $250,000.00. Delivery and shipping are the buyers concern. This would lead me to conclude that the only possible reason to slow down gold’s parabolic run would be that they simply do not have the gold to satisfy the contracts sold. Let us also not forget that last April the CME raised the margin rate on silver not once but five times to get silver to finally capitulate. The fact is that the CME does not have the physical gold to satisfy the future contracts that have already been sold. Do you really think this will play out differently than it did with silver last April? Some may call it a bubble but I do not agree. Call it whatever you want. The fact remains that there is simply not enough gold to satisfy the thirst for the prospective buyers. George Soros, the hedge fund investor who called gold the ultimate bubble, has divested his portfolio of nearly its entire investment in the gold, inciting many to fear that the price will very soon plummet, devaluing the specie-heavy portfolios of millions of investors.           Agree with him or not, like it or not, like him or not, attention must be paid to his movements. It can be very expensive to ignore the predictions of Soros. For example, on September 16, 1992 (a date subsequently known as “Black Wednesday”), one of the investment funds of Soros sold short more than $10 billion worth of pounds sterling, profiting from the British government's reluctance to adjust its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries. Defiantly, the UK withdrew from the European Exchange Rate Mechanism, triggering an unsettling devaluation of the pound. Not everyone was harmed by this plummet, however. George Soros earned over $1 billion in the ordeal. Consequently, he was described by the media as the man who broke the Bank of England. In 1997, the UK Treasury estimated the cost of Black Wednesday at 3.4 billion pounds. This latest move to take a position against gold may have similar repercussions around the globe. Soros, the Hungarian-born financier made the move to cut his holdings of gold only in the first quarter of 2011. As with most things this King Midas touches, the price per ounce of gold had skyrocketed during the period of his investment in it. While at the beginning of last year gold was trading at $1,100 an ounce, the trading price in 2011 has risen to as much $1,800. The exact date of the dramatic divestment by Soros is unknown. It is known that the majority of those holdings are managed through the Soros Fund Management Company. Filings to the Securities and Exchange Commission (SEC), the American regulator showed that he had sold 99% of his holding in the SPDR Gold Trust (GLD), an exchange-traded fund (ETF) backed by gold bullion, by the end of March. The New York-based fund sold its entire holding in GLD but Mr. Soros bought shares in two mining companies, Freeport-McMoRan Copper & Gold and Goldcorp. Despite the potential for a devastating global impact of such a move by one so influential, there are those on Wall Street praising the insight of Soros. Historically, it is typical that as the precious metals rally ends, you will get transition toward related equities. Indeed, the gold mining stocks have lagged the underlying asset as people would rather hold gold and silver above the ground rather than these metals still in the ground.  As I write today it looks like Mr. Soros did not get this one right and there are those not entirely convinced of the wisdom of Mr. Soros. Filings to the SEC showed that Paulson & Co, the US hedge fund run by John Paulson, left its holding in the SPDR Gold Trust (GLD) unchanged. It was reported in Bloomberg online that Hal Lehr, a commodity trader at Deutsche Bank, said he remains bullish on gold despite its current levels and believed it could reach $2,000 an ounce by year’s end. The report went on to say that gold ETF holdings fell by 3.3 percent in the first quarter of 2011 and there are reliable indications that some of that investment was used to purchase physical gold bullion. As if there is not enough uncertainty, a worldwide devaluation of gold could create a ripple of financial insecurity. There can be no doubt that gold is viewed by a majority of the world as a very safe and trustworthy investment, one that only increases in value. This sort of reasoned speculation has undoubtedly fueled the bullish ballooning of the price per ounce of the metal.  If the actions of Mr. Soros and other global power brokers have the effect of devaluing gold, then the legitimacy and appeal of the call of many to return to a gold standard for the value of paper currency or to abolish the Federal Reserve and other similar central banks around the world will be similarly devalued. Once the worth of both gold and paper currency is wiped out by the conspiring plotting of financiers, globalists, multinational corporations, central bank boards, and other likeminded and equally influential monied interests, there will be nowhere to turn for an object of value. This complete obliteration of precious metals and paper currencies will leave those who create such catastrophes as the sole site of economic refuge for those cast headlong into the storm of boom and bust cycles and the devastation that comes in their wake. One of the most toxic elements present in this pool of bitter water is a worthless money supply. The Federal Reserve creates this non-potable problem by engaging in a practice known euphemistically as quantitative easing. It is a policy that plain-speaking men would call printing worthless money. There is no governor on the engine of the Federal Reserve's printing press and the speed with which it can crank out reams of worthless paper money is dizzying. However, unlike paper money, gold cannot be manufactured and it is of finite quantity. While this bodes well for the eventual rebound of the price of gold (assuming that it soon begins to descend), there can be little expectation that those who benefit most from a world marketplace dependent on dollars and pounds will allow gold to supplant these currencies as the coin of the realm. From their point of view, access to that resource must be restricted and dependence on printed money must be perpetuated. The current debt crisis in Europe is an example of how the price of gold can benefit from currency’s shortfall. The millions upon millions of dollars owed by Greece, Ireland, Portugal, and others in the eurozone devalues paper currency while artificially (perhaps) propelling the price of gold into the stratosphere. That said, there is a good chance that any effort to sell off holdings in the precious metal by George Soros and others may convince others to dump their own investments in gold rather than run the risk of being found on the outside of the trade looking in. In fact I’m sure this is exactly what that cagey cat George Soros is betting on. I will remain long GLD, SGOL, PHYS, SLV, PSLV and AGQ. 0 comments
machineh's picture

No paragraphs? Another illiterate crank with typing diarrhea.

Before yesterday's hike, the difference between initial and maintenance margins on Comex gold was equal to only $15.75. Now it's $19.25.

Both values are stupid low for a market that's moving 30 and 50 dollars a day. Dealers have to issue intraday margin calls all day long.

Letting weak hands get on board with 30-to-1 margin isn't doing long-term gold investors any favors.

chubbar's picture

Pretty sure a gold contract is for 100 ounces and the silver is for 5,000 ounces, fyi

machineh's picture

Correctomundo. So what does this delusional gibberish mean:

That means if we use a proxy price if $2,000 an ounce, to make the math simple, we are talking about $10 million for one contract. Add to that, the CME gets a fee of $50.00 an ounce above the spot price, so for every contract sold they earn $250,000.00. 

Obviously this goofball has never traded in his life. But his vivid imagination transports him out of his mom's dank basement.

FeralSerf's picture

$2,000/oz * 100 oz/contract = $10 million/contract????   Is this the new math or something?

eurusdog's picture

There is a definite hourly h&s building on gold this morning. I would love to buy more at it's target, $1640!

thunderchief's picture

We've all heard this Crapo Wapo stuff before..

Abreviate for Christ's Sake..

Or for Charles Manson's sake,  for that matter.

Fundamentals mean nothing, until one day they mean everything.

Get with the program Numb nuts.

This is America..Learn the Rules!!!

disabledvet's picture

we know sovereign wealth funds r buying massively. move along

Smiddywesson's picture

If the actions of Mr. Soros and other global power brokers have the effect of devaluing gold, then the legitimacy and appeal of the call of many to return to a gold standard for the value of paper currency or to abolish the Federal Reserve and other similar central banks around the world will be similarly devalued.

If they could do this, gold wouldn't have reached $1000, let alone $1800.

As disabledvet points out, the central banks and governments of the world are all buying gold at the same time.  That says it all.

They can manipulate a gold standard too you know, and all of our actions up to this point have been to kick the can and ready ourselves for a gold standard.  What do you think would happen if we went on a gold standard and they manipulated the price of gold upwards?  Wouldn't that lower the value of everything else, including soverign debt?  Changing the price of the measuring stick means they can tax you to pay for all this craziness and most people wouldn't even know it.  A gold standard ties the government's hands, but not the central bankers.   Paper is easier to manipulate, but gold prices have been manipuled to their benefit in the past and will be in the future, only not in the same direction.

Buy physical or pay their tax

Dangertime's picture


All fiat holders will be assimilated.

jmcadg's picture

No wonder gold is currnetly being bashed. Got to diswade real people from real value.

thunderchief's picture

Kitco never lies..

Your government, your mother, your mother in law, your sister, your sister in law, and your wife may, but as I have always said...

Take your medicine at, wheather you like it or not..

Bend over and take it like a man, as John Wayne once said...

au_bayitch's picture

"or to put it correctly these currencies have fallen in value against gold", needing a scale to calculate net worth is better weigh to say it.

HedgetBedgadget's picture

Suppose I had 10k of Euro this very instant. What would you guys advise me to do?

Buy gold? From where? or the gypsy down the block selling gold?

Waste it on drugs?

Waste it on holidays?

Bank deposit?


LookingWithAmazement's picture

Gold and silver are gonna plunge and stay low for long.

LookingWithAmazement's picture

It was a hype, profit taking now.

thesapein's picture

that has been true for like ten years, yo. past and present tense. silver is especiall already plunged and been staying low. call it a sale. this sale is still going on for as long as the party last. enjoy.