The shock move by the Swiss Bank to end the currency peg against the euro has sent the euro tumbling, put markets under pressure and sent investors scurrying for havens for their cash.
So inevitably gold is benefiting, rising 2% to a 12 week high of $1259 an ounce while silver is up from $16.8 to $17.1.
Michael Hewson at CMC Markets said:
The ripple out effect of [the Swiss move] is likely to be hard to quantify, and we could well get a lot more volatility as investors and markets in general try and work out what this sudden change in policy means for future central bank promises going forward, but it seems likely that the US dollar could well benefit, as well as gold, as investors look again at the more traditional havens.
This morning’s moves also highlight how fragile financial markets still are nearly six years after the financial crisis despite trillions of dollars of central bank largesse and the risk is that markets start to lose faith in these new masters of the universe as investors look at central bank promises with large dollops of scepticism.
The gold and silver move has also benefited precious metal miners, with Randgold Resources rising to the top of the FTSE 100, up 215p to £51.65. Mexican miner Fresnillo is close behind, 28p better at 844p.
Overall the FTSE 100 is currently down 39.31 points at 6349.15, having trading in a 172 point range in a volatile morning.
The Swiss stock market, meanwhile, is now down 11% and on course for its worst daily performance on record.
