Gold and the Swiss franc remain safe and sound investments during the storm in global financial markets. Switzerland’s central bank has temporarily abandoned the idea of interfering with the franc to weaken it and now the Swiss franc will remain a strong and reliable currency.
Gold feels pretty confident now and is trading around $ 1830 an ounce. The Dow Jones ended August with 11,641 points after falling nearly 20% in the first weeks of August. Even the August 26 Fed report in Jackson Hole shows that the U.S. economy is on a fragile foundation and that more attention should be paid to this issue in the future. Talks about the possible need for a third stage of quantitative easing (QE3) have not been confirmed by the Fed, but it is likely that this issue will be discussed again at the next September meeting.
Statistics on unemployment in the private sector in the United States, as one of the indicators of the country’s economic situation, showed a slight intermediate improvement. In three summer months, only 91,000 new jobs have been created in the private sector of the economy. This is a drop in the ocean compared to the millions of jobs lost in the two quarters of this year. All of this suggests that it is very possible that the U.S. economy will fall into a recession like the one in 2008. Markets are now waiting for a report from the Employment Bureau on the number of jobs in the hope that their statistics on job growth will be better.
The situation is not the best in Europe either. European markets are experiencing their worst economic times since October 2008. The German DAX index experienced one of the worst declines in a decade. The French CAC also lost 11% this quarter. There are two main reasons for this: the eurozone debt crisis and the ECB’s financial assistance. Growing gold activity, government bonds and other safe-haven assets for investors are forcing them to flee weakened eurozone markets.