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Gold
Here is likely the story that propelled gold today.
This is an e-mail forward from a peer.
So it has come to pass, the Swiss National Bank gave up defending the Euro, and the level of Swiss Franc – Euro at Swiss Franc 1.20 is history. The Swiss National Bank again, as in Sept.2011, surprised the financial markets, by dropping their intervention level.
BTW: I talked to my Swiss banker today and:
He said the head of the SNB said that they ran out of ammunition trying to maintain the peg. It was very costly and they had to keep buying a fire hose of Euros, and they could not maintain the peg any more. It was an avalanche of Euros that they continually needed to buy and the dam broke.
As to future Euro QE, that part they were less willing to address. But he did mention Euro QE as being a given and GrExit as being highly likely as big factors coming down the pike to worsen matters still more.
The Euro peg was impossible to continue to maintain I light of past, only to worsen in light of slated future events like Euro QE and GrExit.
He sent the email below to clients.
............................
There has been a lot of bloodshed, investors worldwide where taken by surprise.
Billions and billions of Swiss Francs have been destroyed in a matter of hours, we have seen volatility in foreign currencies, as never before in history.
The Swiss Franc gained well over 20% against the US$ in the early trading hours, the same is true for virtually all major currencies.
Big blood shed also on the Swiss Stock Market, with the Swiss Market trading down well over 11%.
We do not have all the answers yet, but this might well put a lot of pressure on our exporting companies such as ABB, Novartis, Roche; to name just a few.
The current, so called, negative interest rate scenario, is now of imminent danger to fall into a deflation scenario. The National Bank also increased their negative interest rate scenario, from -0.25% to -0.75%, for cash amounts over Swiss Franc 10 million.
The predicted economic growth projected for Switzerland in 2015 will, in our eyes, therefore not come to pass and might even lead to a negative scenario. We will have to wait and see how our economy will handle this new situation.|
The financial world was caught on their wrong footing. The talk of the mighty US$ also against the Swiss Franc, is history.
Whether the Swiss National Bank is the forerunner with negative interest rates worldwide will be seen in the not too distant future. This might be the beginning of the end. Only time will tell.
We at XXXX have stubbornly held on to cash in Swiss Francs as well as our precious metals holdings and where therefore not caught on wrong footing. The same is true for being under invested in stocks.
This might be a small step for Switzerland, but a gigantic step for the rest of the world.
We will be able to get a better look as to what implications these steps by our National Bank will have for the rest of the world. However, you can rest assured that this does not have a negative influence on your current investments with our company.]
(end of e-mail)
"It's Carnage" - Swiss Franc Soars Most Ever After SNB Abandons EURCHF Floor; Macro Hedge Funds Crushed
Submitted by Tyler Durden on 01/15/2015
Over a decade ago, George Soros took on the Bank of England, and won. Less than two hours ago the Swiss National Bank took on virtually every single macro hedge fund, the vast majority of which were short the Swiss Franc and crushed them, when it announced, first, that it would go further into NIRP, pushing its interest rate on deposit balances even more negative from -0.25% to -0.75%, a move which in itself would have been unprecedented and, second, announcing that the 1.20 EURCHF floor it had instituted in September 2011, the day gold hit its all time nominal high, was no more. What happened next was truly shock and awe as algo after algo saw their EURCHF 1.1999 stops hit, and moments thereafter the EURCHF pair crashed to less than 0.75, margining out virtually every single long EURCHF position, before finally rebounding to a level just above 1.00, which is where it was trading just before the SNB instituted the currency floor over three years ago.
Moscow... Or Geneva?
Submitted by Tyler Durden on 01/15/2015
Today, the "developed nation" hecklers are deathly silent after what may be the biggest western central bank faux pas in recent history, and which has - perhaps for the first time in history - manifested in lines of people in front of currency exchange bureaus nowhere else but in that bastion of capitalism: Geneva.
Turmoil: Gold Surges As Bond Yields, Crude, and Stocks Are All Collapsing
Submitted by Tyler Durden on 01/15/2015
How the world's markets - from FX to global stocks to crude - reacted to the SNB's shocking decision...
CME Just Doubled (And Tripled) Swiss Franc Margins
Submitted by Tyler Durden on 01/15/2015
We suspect there will be a few more "taps on the shoulder" tonight...
Swiss Stocks Collapse Most In 25 Years: Surveying the European Close Carnage
Submitted by Tyler Durden on 01/15/2015
Swiss 10Y rates crashed over 10bps by the close (having plunged as low as 3.3bps at one point) but the entire Swiss curve is negative at any maturity less than that. EURUSD crashed over 200pips back below 1.16 - the lowest since November 2003. Swiss stocks crashed around 15% before bouncing back to a 8-9% loss - the biggest drop since 1989. Away from Switzerland (and Greece) European stocks and sovereign bonds saw initial dips bought on ECB QE implications but EU Sovereigns did bleed back wider. European VIX spiked from sub-29 to over 32 and all the way back down to close lower on the day.
Did The SNB Just Suffer The World's Biggest Daily Loss Ever?
Submitted by Tyler Durden on 01/15/2015
"By our calculation the FX reserves portfolio on FX alone will have lost in the region of 60bn CHF, assuming EURCHF at 1.03 and USDCHF at 0.88. Though some of this is likely to have gained on bond holdings; this would be far outweighed by losses on FX." - Citi's Stephen Englander
SNB Decision: "Absolute Idiocy" Per Gartman Or "Rationality Itself" Per Saxo
Submitted by Tyler Durden on 01/15/2015
This morning's decision by the Swiss National Bank has polarized the investing community. From the 'smartest men in the room' to the 'most renowned newsletter writers in the world', the reactions could not be more different...
Philly Fed Crashes from 21 Year Highs To 12 Month Lows, Employment Tumbles
Submitted by Tyler Durden on 01/15/2015
With the biggest miss since August 2011, The Philly Fed Factory Index crashed from 21 year highs in November to the lowest since Feb 2014. The headline 6.3 print, missing expectations of 18.7, follows last month's drop for the biggest 2-month drop since Lehman. Under the surface things are even worse with the employment sub-index plunging to its worsdt since June 2013 and the outlook for CapEx slashed in half from 24.8 to 13.2. But but but fundamentals...
US Equity Market Liquidity Evaporates To 3 Year Lows
Submitted by Tyler Durden on 01/15/2015 -
Thanks to the SNB surprise this morning - and FX market volatility (and illiquidity) at insane levels - liquidity in the S&P 500 e-mini futures contract is at its lowest in at least 3 years... (i.e., prepare for volatility)
Swiss ATM "Unable To Dispense Euros At The Moment"
Submitted by Tyler Durden on 01/15/2015
Crude, Gold Jump After Goldman Says SNB Action Hints At "Massive ECB QE"
Submitted by Tyler Durden on 01/15/2015 -
"This is a massive message from SNB to the market: ECB is going to do QE, and it’s going to be big..." notes Goldman Sachs and it appears Gold and Crude Oil are starting to get on that bandwagon.
Gold Chart
Price took out an important trend in gold at 1244 and the key resistance now is the 1272-1280 area. It’s the last resistance until 1300-1322. Support is now the 1249-1255 area on a minor basis as well as 1238-1242. Weekly support now 1217-1227. A close above 1256.30 will put the Elliot Wave boyz in gear also and would project out to 1322-1372. Max potential would be 1430-1530.
In sum any pullbacks to 1222-1242 should find pretty strong support. The short term trend remains up and takes a close below 1222 to neutralize the uptrend.
 
Cycles
The ideal day for a short term peak is Monday, Jan 19th (plus or minus 72 hours). Thus the window opens tomorrow and runs until the close of trade next Thursday. This weeks move has conqured two of our price targets (1229-1234) and (1238-1244). This 3rd tier level of 1252-1272 lloks like we’re heading to test 1272. Here also on the daily chart it’s the last resistance until that upper black trend line at around 1300. With the 200 day at 1255, and the Elliot Wave boyz at 1256.30, one would think that all eyes will be on the close. Let’s see if the control boyz paint the tape.
Silver
Perhaps the most important thing to draw from is that silver has not broken out from its downtrend line where as gold has. The other factor is the moving averages. (The blue 712 hour moving average) and the 1600 hour moving average are both at 16.32). Gold (as we reported last week) has already crossed averages.
Certainly one can make the case that silver got hurt with the copper, but actually, the LESS copper produced would actually LOWER silver output as silver has 70% of its supply as a by product of other metals.
The key now is whether silver can get above the dual red dotted trend line in the 17.20-17.60 region. The only other resistance before 19 bucks is that line just under 18. The short term trend remains up.
Support is 16.32-1659 and then 15.75-16.09. Resistance 17.20-17.60.
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