Swiss Franc and Gold Shine as Safe Havens Amid Market Turmoil
The Swiss franc and gold are emerging as top safe-haven assets as stock and bond markets face continued turmoil. The USD/CHF exchange rate recently fell to 0.8100, marking a 12% drop from its 2024 peak. This decline has propelled the Swiss franc to become one of the year’s best-performing currencies.
Switzerland’s neutrality and strict banking secrecy laws contribute to the franc’s appeal. The Swiss National Bank (SNB) is a significant investor in U.S. markets,holding ample positions in major companies like Apple, Microsoft, Amazon, and Alphabet. It also ranks as the tenth-largest holder of U.S.Treasury bonds.
Gold has also surged, reaching a record high of $3,240. This represents a 125% increase from its pandemic lows and a 24% rise this year.In contrast, the S&P 500 and Nasdaq 100 have seen double-digit declines.
Bitcoin, often considered a digital safe haven, has not fared as well. Its price has dropped from $109,300 to $83,000. Despite its limited supply and Wall Street interest, Bitcoin has underperformed compared to gold and the Swiss franc.
Global risks are on the rise, with many analysts predicting a recession this year. Polymarket data suggests a 60% chance of a recession, while BlackRock’s Larry Fink believes the U.S.is already in one. Mark Zandi, moody’s chief economist, cites tariffs between the U.S. and China as a major factor.
Economists from Morgan Stanley, BNP Paribas, and UBS warn of a potential drop in U.S. GDP and a rise in unemployment to 5%. As uncertainties grow, the Swiss franc and gold remain strong havens for investors.
