Weekly Update 1-Jul-2016

The big gains for the week of 1-July week were in precious metals and mining stocks, while most of the losses were in currencies and short term bonds. (My apologies for the late posting of this update. I will be posting the 8-Jul Update on Monday, 11-July.)

The last two weeks have been dominated by fallout from the UK vote to leave the European Union. The markets didn't expect this, and have been trying to determine what (if any) changes in value will follow from this event. Currencies have all been hit hard, starting with the Pound Sterling (down 11.7% the morning after the vote, and down a further 4.4% this week). The Euro was next, losing 2.9% for the week ending 6/24, and dropping another 2.1% this week. Bitcoin was also hammered for the week ending 6/24, down 12.7%, but stabilized this week, off just 0.2%. In perspective, though, this 13% drop is just giving back half of the 27% gained the week before.

USD bonds were mixed, with short term SHY falling 1.7% this week, on top of a 1.8% loss the previous week, while the long term TLT rose 1.6% this week, almost canceling out the prior week's 1.8% drop.

Stocks recovered this week, after getting slammed by the British exit vote last week. The exception was gold miners, with the HUI rising 2.8% on the news last week, and following through with a 6.9% rise this week. For the week ending 24-June, the UK FTSE dropped 4.7%, as did the Japanese Nikkei, but not as far as the Euro STOXX FEZ, which fell 7.5%. This week, all stock indexes were higher, mostly recouping about half the prior week's drop. The FTSE was up 2.4%, FEZ rose 3.0%, and the Nikkei was 3.2% higher.

Commodities were mixed, with cotton continuing to slide lower (down 2.0% on 24-Jun and down 1.1% for 1-Jul). Coffee whip-sawed, falling 4.4% and then rising 4.8%. Crude oil fell 2.6% on he LEAVE vote, but recovered 1.0% this week. Other commodities, especially precious metals, were strong both weeks, but especially this week, with palladium gaining 7.1% and silver rising 5.7%.

Priced in Gold Weekly Summary

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