Market Update 24 May 2013: Gold Stocks and Bitcoins Buck Pullback Trend
After last week's powerful rally in almost everything but gold stocks, most asset classes pulled back a little this week. The exceptions were Bitcoin, which rose again for the the third week in a row, and gold stocks, which regained part of last week's massive loss.
Bitcoin rose 5.3% to close just above 2.9 g. Trading volume continued to decline for the fifth week in a row. Although prices have been fairly stable for the last few weeks, you should continue to expect volatility once volumes begin to increase.
Among the government currencies, the CAD was weakest, losing 3.3%. The USD fell 1.5% to close at 22.4 mg; this is 38.9% above its half-life curve, and continues to present an excellent selling opportunity for those still holding USD assets. The Japanese Yen also fell 1.5%, while the Euro declined 1.6% to close at 28.8 mg.
Bonds were lower, with short term SHY dropping 1.6%, while the long term TLT fell 2.7% to close at 2.61 g. Although below than last week's close, TLT remains above it's new support at 2.55 g. It will be interesting to see if this will hold next week.
Stocks were mostly lower, led by the Nikkei, which lost 4.9%. After recording its highest close since 1-Oct-2009 on Tuesday at 3.43 g, the index pulled back to close at 3.20g. The HUI Gold Bugs Index was the only rising equity class this week, gaining 2.2% (about a quarter of the 8.4% lost last week) to close at 5.71 g. I continue to see the 6 g level as resistance, with little support in sight until the old low at 4.2 g.
Commodities were all down, led by Coffee, which gave back most of last week's gains, dropping 7.2%. Silver and Copper were hurt the least, falling 2.2% each. Platinum declined 2.6% to close the week at 32.6 g/oz, now 4.7% above parity with gold.