Weekly Update 17 Jun 2016
The big news this week was Bitcoin, which exploded higher, rising 27.6% to close a hair above 18 grams. Bitcoin is now 173.8% higher than this time last year! The second largest gain was in coffee, up 1.6%. The weakest assets were palladium, off 5.3%, and Japanese stocks, which fell 4.8%.
Most government-issued currencies were lower, led by the Canadian Dollar (down 3.7%) and the Euro (off 2.1%). Only the Japanese Yen managed to gain value, rising 1.0%. US Dollar cash declined 1.2%, short-term bonds fell 1.1%, while long-term bonds were down 0.6%.
All equity indexes were also lower, led by the Nikkei 225, off 4.8%, and followed by the Euro STOXX which dropped 4.5%. The HUI gold stocks fell 2.8%.
Commodities were mostly lower, but coffee continued the prior week's rally, rising a further 1.6%. Copper was little changed for the week, up 0.1%. Both platinum group metals were hit hard, with palladium falling 5.3% and platinum sliding 4.0%. Crude oil continued to slip lower, off 2.4%. Silver held onto most of the prior week's gains, giving up 0.9% for the week.
Looking back over the last 12 months, only five asset classes are in the black, and one more (silver) is just a hair above break even. The big winner is Bitcoin, up 173.8%. In second place are the HUI gold stocks, up 31.2%. Rounding out the field are the Japanese Yen, up 8.0%, TLT long term bonds, up 7.4%, and coffee, up 1.4%. The biggest losers of the past year were palladium, which fell 33.7%, copper, off 28.0%, crude oil, down 26.9%, and the Euro STOXX, which lost 23.7%.
As I write this post, Bitcoin has pulled back to about 16 grams, a little more than half an ounce of gold. Although my earlier prediction that 1 BTC would buy 1 ounce of gold by the end of 2015 was premature, I still think we will see that price level eventually, possibly in the coming 12 months. We are more than half-way there already!