Market Update 1 Feb 2013 – Bonds down, Bitcoin up up up!


Bitcoin, which has been rising strongly for the last month, kicked in the afterburners this week, gaining 23.8% to close at 386.3 mg. This blew through the resistance I expected at about 350 mg, and leaves the way clear for a retest of the all-time high of 598.3 mg set in June of 2011. Nonetheless, a pullback to support at 350 or even 300 before moving higher should not come as a surprise.

Government issued currencies were mostly lower, led by the JPY, which fell another 2.4% this week, and is hovering just 0.08% above its all-time low. The exception was the Euro, which rose 1.2% to close at 25.3 mg. The USD and CAD fell 0.5% and 0.6% respectively.  More comments on the USD below.

Bonds were down, with the 1-3 year SHY falling in line with the USD, while the long term TLT dropped 2.6% to 2.15g as interest rates rose from 2.63% two weeks ago to 2.75% last week, and 2.83% this week.

Stocks were little changed this week.  Gold stocks were weakest, but only down 0.3%, while the Dow Jones Industrials were the strongest, up only 0.3%.

Commodities were mixed, with cotton rising 2.5% (the next best performance after bitcoin's meteoric rise) and copper gaining 2.2%. Crude oil was also up, rising 1.4%.  Silver fell .9% to 0.586 g/oz, while coffee lost 0.8% to close at 27.6 mg/lb.  Platinum was unchanged for the week, but spent the entire week above parity with gold, ending 1.08% above parity at 31.44 g/oz.

The USD continued to flirt with the 10% "overvalued" level this week, closing at 9.8% above its predicted value. This makes it a good time to trade any over-valued dollars you might have lying around for precious metals, real estate, and other real assets.  Or use them to invest in yourself – travel to a new place, or start or expand your own business. The world is full of opportunities!

Table of prices in gold for week ending 1-Feb-2013

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