Tag Archive: Gold

Fundamentals and FX Movements, Week September 9 to Sept. 13

2013-09-15

The weekly summary of global fundamental news with focus on CHF and gold price movements. Friday, September 13:The leading news came from U.S. retail sales and the Michigan consumer sentiment. Retail sales were up +0.2% instead of 0.5% expected, sales excluding autos and gas +0.1% (vs +0.3% exp.) The Michigan consumer sentiment disappointed at 76.8 …

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Our Detailed Estimate of SNB Q2 Results: 17 Billion Francs Loss, The Reality 18 Billion

2013-07-30

by George Dorgan

2013-07-30

UPDATE: July 30th, 2013: Our estimate for the quarterly loss missed the reality by 1 billion francs. The quarter results: 18.3 billion francs loss. The loss for H1 was 7.3 billion CHF. July 1st 2013: We estimate that the Swiss National Bank (SNB) obtained a loss of 17.3 billion francs in the second quarter 2013. … Continue reading »

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Democracies Like Bubbles, Totalitarian Regimes Hate Them

2013-06-19

by George Dorgan

2013-06-19

Totalitarian regimes, like China, fear bubbles and revolutions. Strangely, these regimes help to prevent asset bubbles, and the resulting unequal distribution of wealth between rich asset owners and the poor without assets. Today’s FT article shows how Chinese authorities fear the bubble and the revolution. China cash crunch deepens as PBOC withholds funding Short-term interbank …

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The Cyclical and Exchange-Rate Induced Chinese Slowing

2013-06-09

by George Dorgan

2013-06-09

We believe in the Chinese economy, but it has just gone into a cyclical and a exchange-rate induced slowing. Any Cassandra views like recently by Charles Dumas, chief strategist of Lombard Research, but also some of Richard Koo’s earlier views, that there will be a burst of the Chinese housing bubble, are exaggerated. Markets Insight: …

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Ageing and Immigration in the U.S. and Japan and the New Normal

we slowly move into an inflationary environment and prices of German Bunds and US Treasuries are falling.... ECB and Fed interest rates seem to be nailed to zero for years.

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Pictet Become “Secular Dollar Bulls” and Gold Bashers: Our Response

2013-06-01

by George Dorgan

2013-06-01

Precisely at the moment when the dollar undergoes a secular bashing with a 6% loss against the yen and 3% against the euro, Pictet publish their “secular dollar bull era” video and recommend investors to avoid gold. “Secular movements” in currency markets are mostly driven by current account (CA) surpluses or deficits, while housing …

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EUR/CHF to 1.25?

2013-04-22

by George Dorgan

2013-04-22

Chinese economy is weaker, the Brent oil price under 100$ , the German DAX near 7500, the USD/JPY near 100, the Australian dollar is dipping. Most assets that are positively correlated to CHF are weaker. Time for EUR/CHF to rise?

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“SNB Concerned”: Does a Yes to the Swiss Gold Referendum Imply an End of the CHF Cap?

If the upcoming referendum "Save our Swiss gold" wins, the SNB must increase gold holdings from 10% to 20% of its balance sheet. Gold purchases and/or sales of fiat money implies an end of CHF cap.

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Seasonal Factors on Gold, the 19 February Short Trade

Gold came under pressure in early February when stock market strength but also U.S. gas prices rose. US purchases, however, help to improve foreign economies and therefore also the gold price.

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The “Get Stress in May and Relax in October Effect” for the SNB

The U.S. economy regularly improves between October and March. The SNB should use the moment to sell some currency reserves. From May on, the typical seasonal effects will push the SNB into a defense.

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SNB Profit 6 Billion CHF over the Year, 10.9 Billion Loss in Q4/2012

2013-01-17

by George Dorgan

2013-01-17

The Swiss National Bank (SNB) obtained a profit of around 6 billion francs for the year 2012 (full statement). The profit was reduced from 16.9 billion francs between Q1 and Q3 2012, which means that in Q4/2012 the bank had a loss of around 10.9 billion francs. The profit in gold fell from 6.2 billion …

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German Currency and Gold Reserves and the German Trade Surplus

2013-01-17

by George Dorgan

2013-01-17

During the Bretton Woods system, Germany managed to obtain current account surpluses. They converted these surpluses into gold. At the time they bought it at 35$ per ounce at a relatively cheap price – at the end of the 1960s the price was augmented to 42$. At the end of the 1960 and with …

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Gold Tells the History of the 20th Century

Gold value and tons per country reserves US Canada Japan Swiss Netherland UK Russia France Italy

Quantitative Easing, Gold and the Swiss Franc

2012-12-27

by George Dorgan

2012-12-27

The main drivers of demand for Swiss francs are the euro crisis, but even more, the behavior of American investors, who go out of the dollar in the fear of further bad US economic data and of Quantitative Easing. This will push down the dollar, and safe-havens like the CHF, gold or the Japanese Yen up. … Continue reading »

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Correlations Between the Swiss Franc, Gold and the German Economy

2012-12-21

by George Dorgan

2012-12-21

In yesterday’s post we focused on several economic events that weakened the position of the Swiss National Bank (SNB). In this extended replacement post, we give several reasons for recent movements in the gold price and explain the correlation between German economic data, gold and the Swiss franc. IFO data shows that Germany will not …

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Gold, CHF, Brent Arbitrage Trading after Negative CS, UBS Interest Rates

2012-12-01

by George Dorgan

2012-12-01

Credit Suisse and UBS will charge negative interests for cash clearing clients above a threshold. Last year such news was worth 250 bps, on December 3 only 28 bips. One remembers August 26, 2011, when UBS only spoke of negative interests and consequently EUR/CHF rose from 1.1420 to 1.1688. At the time FX traders …

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Seasonal Factors on Oil

Evidence from simple tests supports perhaps some belief that crude oil tends to have strong and weak months of the year, Q4 is often the weakest quarter and Q1 and Q2 the best.

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SNB Results Q3 2012: SNB Radically Reduces Euro Share from 60% to 48%

2012-11-02

by George Dorgan

2012-11-02

snb q3 breakdown in currencies usd eur gbp

SNB Q3 Profits: 10 billion francs The Swiss National Bank (SNB) radically reduced its euro share, in the third quarter from 60% to 48%, and bought US dollars and sterling instead. In the second quarter, however, it increased the euro share from 51% to 60% and concentrated on buying euros. Given that the EUR/USD was … Continue reading...

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