As turmoil continues in the stock and bond markets, Swiss francs and gold have emerged as top safe-haven assets.
The USD/CHF exchange rate fell to 0.8100 on Friday, marking a 12% decline from its peak earlier in 2024. This trend has positioned the Swiss franc as one of the year’s best-performing currencies.
In stark contrast to the Swiss franc, the U.S. dollar has plummeted to its lowest levels since 2018. This disparity is largely attributed to Switzerland’s longstanding neutrality and stringent banking secrecy laws, which have consistently made it a safe refuge for investors.
The Swiss National Bank (SNB) is a significant player in U.S. markets, holding major stakes in numerous leading American firms—including well-known companies like Apple, Microsoft, Amazon, and Alphabet. It also ranks as the tenth-largest holder of U.S. Treasury bonds.
Gold has surged as a premier haven, reaching an unprecedented price of $3,240. Since its lows during the pandemic, it has increased by 125%, with a 24% rise occurring this year alone. In contrast, the S&P 500 and Nasdaq 100 have both faced double-digit declines.
Gold and Swiss Franc Surpass Bitcoin
Amid escalating trade tensions, gold and the Swiss franc have outperformed Bitcoin (BTC) as safe haven assets. Bitcoin, often considered the digital equivalent of gold, has fallen from its year-to-date high of $109,300 to around $83,000.
Despite being seen as a safe haven due to its capped supply of 21 million coins and growing interest from Wall Street investors, Bitcoin has not fared as well in these recent market conditions.
Gold and the Swiss franc have also outshined U.S. bonds, which have recently faced increased pressure. This past Friday saw the benchmark ten-year yield rise to 4.50%, while yields for the 30-year and 2-year bonds climbed to 4.85% and 3.97%, respectively.
Global uncertainties continue to rise, with analysts suggesting a recession could occur this year. Data indicates that there is a 60% probability of a recession, with some experts asserting that the U.S. may already be experiencing one.
Mark Zandi, chief economist at Moody’s, has raised his recession probability to 60%, pointing to significant tariffs imposed between the U.S. and China, including a base tariff of 10% on all imports and a 25% levy on steel, aluminum, and cars.
In addition, economists from firms such as Morgan Stanley, BNP Paribas, and UBS have cautioned that U.S. GDP may decline this year, with unemployment rates projected to rise to 5%.