As investors flock to the Swiss franc, that country’s central bank has taken the exceptional step of setting an exchange rate for the franc against the euro. The minimum rate is to be 1.20 franc to 1.00 euro. Moreover, the Swiss National Bank has pledged to buy unlimited amounts of foreign exchange to keep the value of its currency from skyrocketing relative to the euro.
The debt crisis that recently began with Greece shows signs of sweeping through half the countries that share the euro. Investors have sought the Swiss franc as a safer place to put their money. Now their alternative looks to be gold.
European debt problems are not the only factor affecting the price of gold. Stock markets around the world and jumping up and down like yoyos. The price of crude oil seems to be stuck in the just over $80-a-barrel. Unemployment remains stubbornly high in the United States. It’s a long list and complicated by the speed with which information and rumours spread via the Internet.
Suddenly, $2,000 gold this year seems to be a possibility. I’m sure there are lots of writers, investors, analysts and miners who would not be surprised to see gold at US$2,000 per ounce in the next four months.