December 21, 2016

Weekly Update 16-Dec-2016

This was a good week for most asset classes, with both the best and the worst performances among the commodities. The big winner was coffee, which added 5.1%, reversing it's multi-week losing streak. Palladium took the biggest hit, falling 4.9%. The Fed's announcement of a quarter point hike in interest rates (which was widely anticipated) gave new strength to the USD, pushing it up 2.8%, more than any other currency except Bitcoin, which rose 4.2%.

The only currency to fall was the Japanese Yen, which lost 0.2%. Bonds were higher, but buyers again showed their distaste for longer maturities, as the 20+ year TLT gained 2.5%, while the 1-3 year SHY gained 2.6%, and USD cash outperformed both by rising 2.8%.

All major stock indexes were higher, led by the Dow Jones Industrials, which rose 3.3%. The Nikkei 225, the weakest of the large cap indexes, gained 1.9%. The HUI gold stocks were once again the only falling equities, down another 4.0%.

As mentioned earlier, commodities were the movers and shakers this week. In addition to coffee's 5.1% gain, crude oil rose 3.6% and cotton rose 3.2%. On the downside, palladium was joined by silver, which fell 2.6%, and copper, which gave back 0.3%.

Just in time for the holidays, my friends at Inflation Domination have created a new FREE eBook called Mining for Profits that includes a chapter from Priced in Gold titled "Investing outside the Matrix", where I look at how and why to use gold pricing to improve investment returns, strategies for counter-party risk free investing, and more. There are also chapters on alternative energy, evaluating mining stocks, and trading strategies for maximizing profits. My chapter includes a link to a bonus video going into detail on how to use gold pricing to supercharge profits when trading the stock market. It's FREE to all readers of Mining for Profits. Take advantage of this opportunity, and let me know what you think. Happy Holidays from the crew at Priced in Gold!

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December 12, 2016

Weekly Update 9-Dec-2016

This was a good week for stocks, but mixed for bonds and commodities. The big winner was the Euro STOXX, which gained 6.3% this week on news that the European Central Bank will be extending its low interest rate policy and expanding its quantitative easing programs. US stocks also rallied on the news. Coffee dropped again this week, falling a further 3.6%, the largest loss of any asset class. Gold stocks took the next biggest hit, giving up 2.7%, or about half of their gain from the prior week.

The Canadian Dollar was once again the strongest government-issued currency in the list, gaining 1.7%, followed by the US Dollar, which gained 0.9%. Bitcoin took it easy this week, adding 0.7% to last week's 5.6% gain. The weakest currency was the Chinese Yuan, which lost 0.2%. Bonds were mixed, as buyers again showed their distaste for longer maturities, as the 20+ year TLT fell 0.9%, while the 1-3 year SHY gained 0.8%, and USD cash outperformed both by rising 0.9%.

All major stock indexes were higher, led by the Euro STOXX, up 6.3%. The S&P 500 and Dow Jones Industrials gained 4.0% and 3.9% respectively. Gold stocks were the only falling equities, off 2.7%.

As mentioned earlier, coffee was the weakest asset class this week, dropping 3.6%. Silver made the largest gains in the commodity group, adding 4.6%. Copper resumed its rise, gaining 1.9%, and platinum and palladium were 1.6% and 1.0% higher, respectively. Crude oil took a breather, gaining just 0.5% after the prior week's massive 13.6% jump.

A look back at the last year

We are nearing the end of 2016, and I thought it would a good time to reflect back on the last year's results. Government-issued currencies have all struggled, while the free market digital currency, Bitcoin, has soared, rising 71.2% – more than any other asset class. The Chinese Yuan fell 15.9%, making it not only the worst performer among the major currencies, but also the worst performer of any asset class. Among the major currencies, the Japanese Yen fared best, dropping just 0.8% year over year.

Bonds were down hard, reflecting higher rates and again showing a distinct preference for shorter maturities. The long term TLT fell 8.6%, the short term SHY was off 6.7% and USD cash was down 7.1%.

Equities were mixed. The HUI gold stocks rose 41.9% to take second place among all asset classes after Bitcoin. Europe and Japan fell 12.5% and 2.4% respectively, while the major US markets rallied. The Dow Jones Industrials were up 4.9%, and the S&P 500 gained 2.5%.

Commodities were all higher, led by crude oil, which rose 28.8%. Palladium also made huge gains, rising 24.8%. Platinum, in contrast, was the weakest of the group, gaining just 0.5%. Copper and silver did much better, rising 19.1% and 10.3% respectively.

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December 7, 2016

Weekly Update 2-Dec-2016

This was a good week for stocks, bonds and currencies, but mixed for commodities. The big winner was crude oil, which gained 13.6% this week on news that OPEC is planning production cuts (it remains to be seen how that will work out for them!) While crude oil was flying, coffee has been falling, down another 5.0% this week. Copper was also down slightly, off 0.8% after the prior week's monster 10.4% rise.

The Canadian Loonie was once again the strongest government-issued currency in the list, gaining 2.7%, followed by the Euro, which gained 2.0%. Although not on the list, the Pound Sterling outpaced the other major currencies, rising 2.9%, and the free market currency Bitcoin outdid them all, gaining 5.8%. The weakest currency was once again the Japanese Yen, which rose 0.6%. Bonds were higher, but buyers showed their distaste for longer maturities, as the 20+ year TLT rose only 0.2%, while USD cash and the 1-3 year SHY each gained 1.2%.

All major stock indexes were higher, led by the DJIA, up 1.3%. The weakest major market was the S&P 500, which gained 0.2%. Gold stocks rose 5.6% to close at 4.86 grams, the highest level seen in 3 weeks.

As mentioned earlier, coffee was the weakest asset class this week, off 5.0%, while crude oil made the largest gains, up 13.6%. Copper was down slightly, falling 0.8% after the prior week's huge 10.4% rise. Precious metals palladium and platinum were 3.2% and 2.6% higher, respectively. Silver rose 0.5% to close at 0.43 grams per ounce.

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November 29, 2016

Weekly Update 25-Nov-2016

A generally positive week for all asset types, with only coffee, down 2.3%, gold stocks, down 1.6%, and the JPY, off 0.5%, showing losses. The big winner was copper, which after catching it's breath last week, continued to skyrocket, gaining 10.4% this week. The major stock indexes were all higher, led by the Dow Jones Industrials, which gained 3.5% to close at 501.6 grams. Financial headlines have been filled with stories about this recent series of "highest ever" dollar prices for the Dow… but readers of Priced in Gold know that the Dow has yet to equal it's 2015 high of 523.5 grams, or it's 2007 high of 652.6 grams. And to really get into all-time high territory, the Dow will have eclipse its August 1999 high of 1393.2 grams – 2.8 times higher than today's price. Could that happen? Maybe some day, but probably not soon, and probably not without seeing considerably lower prices first.

The Canadian Loonie was the strongest currency in the list, gaining 2.2%, followed by the US Dollar, which gained 2.0%. Several currencies not on the list were much stronger, though, including the Australian Dollar and the Pound Sterling, which gained 3.1% each, and the New Zealand Dollar, which gained 2.6%. The weakest currency was once again the Japanese Yen, which fell 0.5%. Bitcoin took a breather after last week's 6.8% run, rising just 0.4% this week. Bonds were higher, but showed no appetite for longer maturities, with the long term TLT and short term SHY each gaining 1.9% while USD cash rose 2.0%.

All major stock indexes were higher, led by the DJIA and S&P 500, up 3.5% and 3.4% respectively. The weakest major market was the Japanese Nikkei, which gained 1.8%, again coupled with a falling Yen. Gold stocks were 1.6% lower, giving back about half of the prior week's gains.

As mentioned earlier, commodities were almost all higher, led by copper's massive 10.4% jump. Palladium rose another 4.1%, while silver gained 1.7% to close the week at 0.43 grams per ounce. Platinum was little changed, up just 0.1%. The only commodity to close lower for the week was coffee, which dropped 2.3%.

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November 21, 2016

Weekly Update 18-Nov-2016

Things stabilized a bit this week, with mixed results for most asset classes as investors sorted through the debris of the coming political sea-change in the US. The largest swings were in commodities, with silver the week's biggest loser, down 9.3%, and cotton and crude oil the week's biggest winners, up 7.9% and 7.5% respectively.

Bitcoin was once again the strongest currency, gaining 6.8%, followed by the Chinese Yuan, which gained 2.9%. The weakest currency was the Japanese Yen, which fell 1.5%. Bonds were higher, but again showed a preference for shorter maturities, with the long term TLT gaining 1.1%, while short term SHY gained 1.9% and USD cash rose 2.1%.

Most major stock indexes were higher, with the exception of the Euro STOXX, which fell 0.7%. Gold stocks rebounded this week, rising 3.2%. The S&P 500 added 2.9%, and the Japanese Nikkei gained 1.9% in spite of (or because of?) the falling Yen.

As mentioned earlier, commodities were mixed, led by cotton and crude oil, which rose 7.9% and 7.5% respectively. Silver gave up all of last week's gains and then some, falling 9.3% to close the week at 0.42 grams per ounce. Copper rested after last week's huge rise, closing this week up 0.4%. Palladium continued to soar, gaining another 6.4%, while platinum languished, falling 3.2% to close at 23.7 grams/oz.

I wish all my US readers a very happy Thanksgiving. Looking back on the last year, Bitcoin, up 97.3%, and gold stocks, up 48.6%, have been the standout performers. With the exception of platinum and crude oil, commodities in general have done very well, too. I look forward with excitement to the year ahead, but recommend keeping a substantial part of your assets in counter-party risk free investments like Bitcoin, precious metals, and cash. These may fluctuate in market value, but can't be rendered worthless or inaccessible through the bankruptcy or closure of intermediaries, nor can they be easily confiscated or "bailed-in" by government edict. Gold and silver in a brokerage account or bank deposit box can be easily grabbed by government orders, but when in your personal possession or stored overseas in a non-bank vault, the situation changes drastically in your favor.

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Tags: Counter-party Risk, Weekly Update

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November 14, 2016

Weekly Update 11-Nov-2016 US Election!

The US Presidential elections threw markets a major league curveball this week. As results started to trickle in, and the tide turned in favor of Mr. Trump, the US Dollar and stock market futures fell dramatically… but by the next day, they both reversed course and continued to climb through the rest of the week. This left all asset classes other than gold stocks and long term treasury bonds in the black.

Currencies, commodities, and major stock indexes were all higher this week, while bonds were mixed. Bucking the overall uptrend, gold stocks were the biggest loser this week, falling 12.7%, while copper and palladium made the biggest gains, rising 16.85 and 15.5% respectively.

Bitcoin was the strongest currency, gaining 7.5%, followed by the US Dollar, which gained 5.4%. The weakest currencies were the Chinese Yuan and Japanese Yen, which rose 1.8% and 1.9% respectively. Bonds showed a preference for shorter maturities this week, with the long term TLT falling 2.4%, while short term SHY gained 5.0% and USD cash rose 5.4%.

The major stock indexes were all up, led by the Dow Jones Industrials, which gained 11.0%. Japan rose the least; the Nikkei 225 was up 4.7%. Gold stocks were the exception, as the HUI collapsed 12.7%, falling to it's lowest level since March.

As mentioned earlier, commodities were all higher, led by copper and palladium, which rose 16.8% and 15.5% respectively. Silver managed a respectable 7.0% gain, and crude oil snapped its losing streak to close 3.8% higher. Platinum added 2.3% to close at 24.5 grams/oz, still far below the gold parity price of 31.1 grams.

My take is that investors are expecting Trump's promised reductions in tax rates and big spending on infrastructure and military expansion to be good for stocks and boost demand for strategic commodities like copper, palladium and silver. But they are nervous about the growth of deficits and long term debt that these programs imply. If we also get the promised import tariffs and reduced participation in global trade agreements, we could see a reversal in the stock market (which is already grossly overpriced) and a move away from government-issued currencies toward Bitcoin and precious metals, which are much more difficult to confiscate or "bail-in" if things head south.

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November 10, 2016

Weekly Summary 4-Nov-2016

Currencies, bonds, and major stock indexes were all lower this week, while commodities were once again mixed. Bucking the equity downtrend, gold stocks were the biggest winner this week, rising 2.6%, while crude oil positively collapsed, falling 11.6%, and "doubling down" on the prior week's 4.8% loss. This still leaves crude just above its long term support around 1 gram/barrel, and closer to its highs than to its lows for 2016 YTD.

The weakest currencies were the Canadian and US Dollars, which dropped 2.4% and 2.3% respectively. The least weak currency was Bitcoin, off 0.2%, followed by the Japanese Yen, which fell 0.3%. Bonds showed a longer time preference this week, with the long term TLT falling 1.1%, while SHY lost 2.1% and USD cash lost 2.3%.

The major stock indexes were all lower, led by the S&P 500, which fell 4.2%. Japan had the least weakness; the Nikkei 225 was off 3.4%. Gold stocks were the exception, as the HUI rose 2.6%.

Silver led the commodity group, rising 1.5% to close at 0.44 grams/ounce. Platinum and copper also rose, gaining 0.8% and 1.0% respectively. This leaves platinum just a hair below 24 grams/oz, still far below the gold parity price of 31.1 grams.

The big action this week was in crude oil, which dropped 11.6% to close at 1.05 grams, almost exactly its average price for the year to date.

Stay tuned next week to see how the US presidential election changes things up in the markets.

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October 30, 2016

Weekly Summary 28-Oct-2016

This was a losing week for government-issued currencies as well as stocks and bonds, but mixed for commodities. The free market currency Bitcoin made the largest gains, rising 8.6%, while crude oil and gold stocks saw the largest declines, falling 4.8% and 4.7% respectively. Platinum bounced back, recouping almost all of the prior week's losses.

As mentioned above, while Bitcoin was surging, all of the government-issued currencies were falling, led by the Japanese Yen, which dropped 1.7%, and the Canadian Dollar, which fell 1.4%. The least weak currency was the Euro, which fell 0.3%. Bonds switched gears and showed a shorter time preference this week, with the long term TLT falling 2.7%, while SHY lost 0.6% and USD cash lost 0.5%.

Stocks were all lower, led by the HUI gold stocks, which fell 4.7%. The S&P 500 Index dropped 1.2%, while Europe and Japan had the least weakness; the Nikkei 225 was off 0.2%, and the Euro STOXX index was 0.3% lower.

Coffee and copper were very strong this week, rising 5.4% and 4.5% respectively. The weakest commodities were crude oil, which fell 4.8%, and palladium, which slowed it's rate of descent, dropping 1.0%. Silver ended the week unchanged.

As mentioned above, platinum bounced back after setting a new all-time low of 22.8 grams in the prior week, ending this week at 23.75 grams/oz. I continue to see this as an excellent buying opportunity for platinum, which is trading at a 24% discount to gold, as opposed to its historical average 43% premium.

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October 25, 2016

Weekly Update 21-Oct-2016

This was a losing week for currencies and commodities, but mixed for stocks and bonds. Gold stocks made the largest gains, rising 7.0%, while palladium once again saw the largest declines, falling another 4.7%. Platinum also fell, dropping 1.8% to close at a new all-time low of 22.77 grams/oz.

Among the currencies, Bitcoin had the largest loss, giving up 2.4%, or bit more than half of the prior week's gains. The Euro was close behind, falling 2.3%. The least weak currency was the Chinese Yuan, which fell 0.9%. Bonds showed a longer time preference this week, with the long term TLT gaining 0.2%, while SHY lost 1.0% and USD cash lost 1.1%.

Major stock markets once again split along geographical lines, with the US stocks falling while Asia rose. The Dow Jones Industrials dropped 1.1%, and the Nikkei 225 gained 0.9%. The Euro STOXX index was unchanged.

Every commodity in the list fell this week, led by palladium, off 4.7%, and cotton, down 3.2%. The least weak commodities were crude oil, down 0.1%, and coffee, which closed 0.7% lower.

Copper and Platinum continued their declines, falling 2.1% and 1.8% respectively. As mentioned above, platinum closed the week at a new all-time low of 22.8 grams, but it recovered smartly on Monday and Tuesday and is currently trading at 23.5 grams (about where it was 2 weeks ago). I continue to see this as an excellent buying opportunity for the white metal, which is much rarer than gold, has numerous industrial and jewelry uses, and historically trades at a significant premium to gold – as opposed to its current 24% discount.

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October 18, 2016

Weekly Update 14-Oct-2016

This was a mixed week in all asset categories, but much less violent than last week, with the largest gains and losses in the commodities. Cotton and coffee made the biggest gains, rising 5.9% and 5.6% respectively, while palladium and platinum saw the largest declines, falling 4.2% and 3.8%.

Among the currencies, Bitcoin once again made the largest gains, rising 4.1%. The Chinese Renminbi was the weakest currency, giving back 1.1% of the prior week's 5.5% gain. The strongest government-issued currency was the Canadian Dollar, which gained 1.1%. Short term treasuries rose 0.5% while long term treasury bonds lost 1.2%; once again, both were out-performed by USD cash, which closed 0.6% higher.

Major stock markets were little changed this week, with the weakest being the the Euro STOXX (off 0.8%) and the strongest being the HUI gold stocks, which gained 0.7%. The S&P 500 dropped 0.4%, while the Dow Jones Industrials were unchanged.

After last week's big drop, silver recovered 1.4% this week. As previously mentioned, platinum and palladium weren't so lucky; platinum closed the week at 23.1 grams/oz, just 1.5% above it's all-time low. Copper gave back most of last week's gains, falling 2.5%, while crude oil continued it's rally, adding another 1.6%.

From 2011 to 2015, stocks were in a mighty uptrend, with the DJIA rising from 184 grams to a high of 523 grams. In 2016, however, they have broken down through that uptrend line, and have closed below their 36 month moving average in each of the last two months. This is a strong sign that stocks are now entering a prolonged downtrend, and any extended rallies will be selling opportunities. I would recommend taking profits and positioning for the bear market that we are now entering. Cash (in the form of physical gold) should be a large part of any portfolio. For potential gains without counter-party risks, physical platinum looks very attractive at these prices. Silver will eventually be a bargain as well, but it is still 40% above it's lows, and too risky for me at this point.