While the Swiss Franc is lower today against the Dollar (as is the case with all of the European majors), it has been gaining against the Euro as nervous investors in Europe weigh further escalation in the region's ongoing sovereign debt crisis.
Note the following ratio chart or the cross I have created to give you an idea of what has been happening with that particular cross. The Swiss Franc has been the beneficiary of investor preference going back to the beginning of the Fed's stimulus party in late 2008.
European sovereign debt fears then further contributed to increasing gains in the value of the Franc against the Euro as investors on the Continent began looking for a safe haven alternative to US Treasuries. Apparently that has led the Swiss National Bank to once again intervene into the foreign exchange markets. They are determined to prevent the Swissie from rising any further against the Euro.
This is an interesting development since it may serve to preclude any further investor flows from Europe into the Franc leaving them with one less safe haven to run into in the event that things begin spiraling downhill once again over there. With issues now arising related to Spain and Italy not out of the woods yet, this is the sort of thing that has the potential to give rise to a series of investment flows back into gold on the Continent.
If that is the case, EuroGold will begin to move higher and that will work to steady the US Dollar price of Gold.
The jury is still out on this but it does indeed bear watching.
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