Investing.com – Gold futures pared gains in Asian trade Wednesday, after setting an all-time high, as a move by the Swiss central bank to limit EUR/CHF drops sent investors scrambling for alternate safe-havens.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,873.55 a troy ounce during early Asian trade, down 0.29%, after hitting a new intraday high of USDS1,921.05.
Gold surged earlier in Tuesday trade, following the unexpected and extraordinary move by the Swiss National Bank to limit the minimum for the EUR/CHF exchange rate.
“With immediate effect, the SNB will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20. The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities,” the SNB said in a statement.
The Swiss franc has been a favorite safe-haven option amid a deepening European debt crisis and continued signs of a sluggish recovery from the U.S. economy.
Gold has rallied by 34% so far this year, its biggest yearly gain since 1979.
German Chancellor Angela Merkel warned that eliminating Greece from the euro zone could trigger “a dangerous domino-effect", while worries over rising debt levels in Italy saw the cost of insuring Italian sovereign debt against default rise above that of Spain for the first time since December 2009 earlier in the week.
Meanwhile, Russia’s central bank plans to buy nearly three tons of gold this week, according to a finance official, after purchasing 4.42 tons of gold in July.
The shore-up would raise Russia’s total gold holdings to 841.13 tons.
Elsewhere on the Comex, silver for December delivery added 0.02% to trade at USD42.19 a troy ounce, while copper for December delivery advanced 0.25% to trade at USD4.074 a pound.