Gold's epic climb toward the $2,000 psychological barrier is receiving assistance from an uncommon source: another safe-haven for assets.
Reuters reports the Swiss franc, a favored hedge of assets during rocky economic times, was subject to monetary easing earlier this month to reduce its strength. This month also has seen gold futures skyrocket in value, pushing past two benchmark prices: $1,800 per troy ounce and $1,900 per troy ounce.
"Gold usually does well in currencies that cut rates and have negative real rates," analyst Tobias Merath of Credit Suisse told Reuters. "If you get a negative nominal yield on government paper and a zero yield on gold, then gold looks more attractive."
Factors that have contributed to gold's rise in value this month are debt crises on both sides of the Atlantic – Europe's struggle with hobbled banks and public finance systems, and the U.S. political struggle with the debt ceiling – and the economic recovery from the Great Recession losing momentum.
Nearly two of three of the 1,004 people in Switzerland polled from August 18 to August 20 endorse additional measures of monetary easing to reduce the franc's strength, according to AFP.
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