The gold price surged 2.5% yesterday after the Swiss National Bank surprised the markets by abandoning the Swiss franc’s cap against the euro.
The announcement sent shockwaves across the globe with investors diverting money from national currencies into gold bullion.
The gold price soared $32.70 to a high of $1,267.20 per ounce as trading volumes nearly doubled. By lunchtime on the New York Mercantile Exchange 23.7 million ounces had changed hands. The Swiss franc at one point jumped nearly 30% against the euro.
The SNB also cut the interest rate paid on certain deposits to minus 0.75%.
The announcement comes a week before the ECB is expected to unveil a full blown quantitative easing program when they meet on the 22nd of January. The gold price has advanced over 7% so far this year and is up $120 dollars since the price hit a four year low in November.
Assets in the world’s largest gold backed ETF, the SPDR Gold Trust, jumped 1.4% to 717.15 metric tonnes.
Gold is currently trading at 826.59 per ounce, silver at £11.12, platinum 825.01 per ounce and palladium £507.09 per ounce.