Spot gold’s somewhat unexpected rally today was triggered, apparently, by the news that the Swiss National Bank is to start purchasing foreign currency as part of a concerted effort to halt the rise in value of the Swiss Franc.  This announcement also had the effect of propelling the dollar over 300 pips against the Swiss Franc.   The spot gold rally broke both the $923 and $929 price levels although it has since dropped back slightly.  This strong rebound from Wednesday’s low of $890 has altered the market from one of profit taking to try to buy on a dip.

Nervous equity markets and continuing problems in the global economy can only add to the momentum in the price of gold.  Interesting comment from Walter de Wet of Standard Bank Ltd in London said “Yesterday, for the first time in three weeks, there was more physical gold buying than scrap entering the market. “If this trend extends over the next few days, gold should rise again.”