Money in Motion: Currency Trading
RSS FEED
RECENT POSTS
|
- Euro Sinks, China Talks Tough, Dollar Gets a Lift
- How to Trade on the Jobs Report
- How Low Can the Euro Go?
- Euro Steadies, Dollar Holds Firm
- Where the Euro Goes From Here
- Is the Euro Oversold?
- Euro Slides, Yen Lifts, Rupee Keeps Falling
- Busch: How to Trade the Euro on an Outside Reversal
- How to Trade the Euro's Slide
- Euro Slides, Risk Currencies Retreat as Europe Worries Mount
CURRENCY MARKET HEADLINES
MONEY IN MOTION VIDEO GALLERY
COMMUNITY
LATEST FROM OUR BLOGS
- Home Prices Hit Lows, But 'We See Signs of Hope'
- Auto Sales to Really Take Off This Summer?
- Euro Sinks, China Talks Tough, Dollar Gets a Lift
- Zero China Growth Is ‘Probable’: Gordon Chang
- How to Trade on the Jobs Report
- Don’t Trust Buybacks
- Buying the Right Sell-Off Stocks
- Buy Broken Stocks, Not Broken Companies
- The Biggest Market Myth There Is?
- How Low Can the Euro Go?
How to Use Currencies to Trade Gold
Text Size 
Currency Blogger, CNBC.com
 |
Comstock Images | Getty Images |
Want to take a position on gold without trading the yellow metal itself? Here's a way to get the same results by trading currencies.
"A lot of the time when you think of a currency to trade a commodity, you look for the country that exports a lot of that commodity," said Rebecca Patterson, global head of currencies and commodities for J.P. Morgan's private bank.
But that is not always the best approach, Patterson said. For example, South Africa is a major gold exporter, but Patterson says the currency is too volatile and the South African economy too uncertain. The good news is you can find other currency-based ways to "trade" gold, she told CNBC's Melissa Lee.
The key is considering why you want to buy it.
If gold is an inflation hedge for you, "the Australian dollar, [AUD=X
Loading...
()
] even the Canadian dollar [CAD=X
Loading...
()
] might work," Patterson said.
But if you are buying gold for risk aversion, Patterson said, "Go with the Swiss franc."[EURCHF=X
Loading...
()
]
She likes the fundamentals in Switzerland, and she says the Swiss franc "has had almost a 90% daily correlation with gold against the euro for the last two years."
The trade Patterson recommends is buying the Swiss franc and selling the euro at current levels, with a stop about 1% above current levels and a target of 2% below.
Todd Gordon, co-head of research and trading at Aspen Trading Group, concurred on a technical basis. He noted five waves in the Swiss franc/euro price pattern, and called current levels of Swiss franc/euro "a great entry point."
 |
Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm.
"Money in Motion Currency Trading" repeats on Saturdays at 7pm.
- Solving Europe’s crisis is really up to the politicians and not the economists says CNBC’s Kelly Evans.
- Take a look at the most luxurious golf homes currently for sale... and see if they fit your budget.
- Even with many people still unemployed there are some jobs that can’t be filled. Take a look.
- If this past weekend is any indication, automakers and dealers could have a great summer, says Phil LeBeau.
- People who travel a lot are often at higher risk of getting sick. Here are some tips to stay healthy.
- For tech bulls, it's all about now — cloud computing, smartphones and productivity software.
Data is a real-time snapshot *Data is delayed at least 15 minutes
