Market Update 1 Mar 2013 – Bitcoin: CAVU?


It was a mixed week, with most government currencies and most commodities lower. Bitcoin closed Friday on another new all-time high of 673 mg, up 12%. The free market online currency is truly in uncharted waters now, and although serious pullbacks are to be expected as price discovery continues, I would still recommend getting on board now. As Bitcoin's user base is expanding rapidly, there is every reason to expect that the price will be much higher a few years from now – provided, as always, that the currency doesn't blow up! So keep investment positions small enough to suit your risk tolerance.

The government issued currencies were mostly lower, led by the Euro, which fell 1.2%, and CAD, which dropped 1%. The Yen continued it's rise, gaining 0.7%. The USD fell 0.4% to 19.7 mg, now 17.3% above its half-life curve, and still deep into overvalued territory.

Short term bonds were down in line with USD cash.  SHY was off 0.3%, tracking the underlying USD, while the longer term TLT rose 1.2%.

Stocks were mixed. In the US, the S&P 500 fell 0.2% while the Dow Jones Industrials gained 0.3%. The big movers were the Nikkei Index, which rose 2.6% and the Gold Bugs Index which fell another 2.5%, closing at a new post-2008 low of 6.92 g. This is a good point to be adding to your collection of high-quality mining stocks!

Commodities were mostly lower, with the exception of Cotton, which rose another 2.4% to close at 16.4 mg/lb. Silver led the losers, falling 3.1% while Crude oil was 3% lower. Platinum also pulled back this week, finishing down 2.3% at 31.04 g, now 0.2% below parity with gold.

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

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