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Gold Rises as Swiss Bank Introduces Negative Rates

The Swiss National Bank said it would charge banks 0.25% to deposit overnight funds with it, starting Jan. 22. The measure aims to cool the strength of the Swiss franc and keep deflation at bay.

Gold prices surged about $15 in response to the announcement. Negative interest rates are designed to slowly erode wealth and would likely prompt Swiss investors to shift from holding cash to holding gold, said Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago.

“The fact that that’s the environment in Europe, and now Switzerland, is going to spur safe-haven demand,” Mr. Haberkorn said.

http://www.wsj.com/articles/gold-rises-as-swiss-bank-introduces-negative-rates-1418915601