Weekly Update 28 Apr 2017
Currencies and commodities were mixed, while bonds and major stock indexes were higher this week. The biggest gains were in European stocks, which rose 6.5% on news that the first round of presidential elections in France have left open the option for France to stay in the EU. The Euro was also the strongest government issued currency, gaining 2.9%. Gold stocks were down 5.5%, the largest drop for any asset class.
The only currency to fall was the Japanese Yen, which was down 0.7%. Bitcoin was the strongest of all currencies, and the second strongest asset class overall, rising 6.3% to close at 32.4 grams, well above parity with an ounce of gold. Bitcoin also made a new all-time high of 32.7 grams on Thursday, before retreating a bit on Friday. This rally seems to be fueled by news that Bitcoin is set become a legal form of payment in Japan, as well as news that the SEC will take a second look at its position on Bitcoin ETFs. As these stories unfold they could spark a rush into Bitcoin, pushing it to much higher levels.
Bonds were higher, but favored the shorter maturities, with the long term TLT up 0.2%, short term SHY up 1.1% and USD cash up 1.2%.
The only equities to close lower were the gold stocks: the HUI fell 5.5%. The Japanese Nikkei index rose 2.3%, the weakest showing of all the major indexes, while the Euro STOXX gained a massive 6.5%. The Dow Jones Industrials added 3.2%.
The weakest commodities were silver and platinum, which dropped 3.3% and 2.2% respectively. Platinum closed at 23.2 grams, just 2% above its all-time lows. The biggest gains were in coffee, which rose 4.0%, and palladium, which rose 3.9%. Copper was also strong, rising 3.6% for the week. After last week's big 6.5% drop, the price of crude oil stabilized, gaining 0.6% this week.
One final comment on Gold and Bitcoin: They are truly at parity! Today I purchased four 1 ounce Canadian Maple Leaf coins, including FedEx shipping, for 3.996 BTC.