May 2024 – Gold Dreams

Ryan Sobkovich

Hazelton Galleries

We built Inukshuk Capital Management to serve the needs of clients looking for a unique approach – void of conflicts of interest, commission sales and pushed products. We began by putting our own money where our mouth is. With low fees and active risk management, we help families achieve financial longevity, that’s the bottom line.

Stay up-to-date on the latest developments by following us on LinkedIn here.

April 2024: Balance

In this issue:

  • Global Equity Market Performance
  • Gold
  • More Context
  • Bitcoin
  • Behaviour
  • Innovation
  • Volatility
  • Wrapping Up
  • Health is Wealth

Global Equity Market Performance

April was not much fun. The S&P 500 was the biggest loser, down over 4.1% on the month. The S&P/TSX 60 fell 2.1% and MSCI EAFE 1.7%. The surprise was MSCI Emerging Markets with a 1.1% gain.

The best performing asset last month is not in the above chart. It was gold. If you want to read further, the subject is gold and bitcoin – two of our best performers this year.

Our systems remain fully long both the S&P 500 and the S&P/TSX 60.

If you would like to stay current on our measures of trend and momentum in the markets we follow, please click here .


Gold traded at an all-time high in April at USD 2,430 an ounce and is now up 11% on the year. Bitcoin made an all-time high in March at USD 73,800 and has since pulled back but is still up around 45%.

The interesting thing – these are relatively neglected assets.

An April report by Crescat Capital included a chart which shows the percent of investible assets, globally that are held in gold and gold miners compared to previous levels.


Note: it is unclear as to why those specific years were picked but they tell a good story.

The amount of all the gold ever mined, according to the World Gold Council is 212,582 tonnes. At the all-time high, that was worth USD 18.22 trillion.

Bitcoin ended April around USD 60,000. If all the bitcoin that can exist was mined it would be worth USD 1.26 trillion.

All the gold and all the miners trade at a value of 1% of all investible assets. Bitcoin is 7% of gold’s market capitalization. Make of that what you will.

More Context

Global equity market capitalization according to The World Federation of Exchanges is USD 105.6 trillion. According to the OECD: At the end of 2023, the total volume of sovereign and corporate bond debt stood at almost USD 100 trillion…

At a more local level, the S&P/TSX 60 has five miners. They make up 6.4% of an index that has a CAD 2.8 billion market cap. That’s not many billions in a world of trillions.

We are fully long and somewhat overweight Canada. In the March letter we discussed this ‘home bias’. We are homers, but not to the extent the average Canadian is.



Other than being one of the best performing assets we own, what does bitcoin have to do with gold? One thing: it is perceived by many to be like money. It is used for transactions and can be a store of value. Gold has been money for thousands of years. Not everyone thinks that way, but enough do that it matters.

Bitcoin is money-like with a technology component.

Let’s look how it behaves relative to other more ‘mature’ markets.

We can analyze bitcoin’s correlation with gold and the Nasdaq.

Here is the 12-month correlation of daily returns over the past ten years.

It tends to be correlated with both. Its correlation is positive 59% of the time with gold and 72% with the Nasdaq.

More interestingly it flips back and forth between the two.

50% of the time the correlations are opposite. 41% of the time they are both positive. That mix of return correlations has, so far, been a good diversifier.


Bitcoin maximalists are concerned Wall Street will taint its purity. Let’s see what the effect of three different instances of financial innovation has had in bitcoin world.

There are some precedents to support this worry.

Gold futures were launched December 31, 1974. It went down 24% the next year.

Bitcoin futures were launched December 11, 2017. It fell 80% the next year.

The first-ever bitcoin ETFs were launched in Canada, February 2021. It made an all-time high a few months after the launch before falling 55%. It rallied to make another all-time high and closed the year down 11%.

The first US-listed bitcoin ETFs were launched in January. Bitcoin fell 16% over the next few weeks and then rallied 90% to a new all-time high in March.

That’s not much of a sample but so far that’s three out of four bad outcomes after easier access was provided to investors.


Using more data let’s look at what financial innovation has done to daily volatility.

  • Before futures the standard deviation of daily returns was 0.04.
  • In the years after futures, but prior to Canadian ETFs it was 0.04.
  • After Canadian ETFs but before US ETFs it was 0.03.
  • Since the recently launched US ETFs it is 0.03.
  • Over the past ten years it has been 0.04.

Nothing really jumps out.

For further context the standard deviation of daily returns for gold is 0.007. The James Bond of volatility. The Nasdaq is 0.01. So, bitcoin is anywhere between three and four times more volatile than both.

In the past five years it has had two drawdowns – peak to trough moves – of around 80%.

In the past five years gold has had two 20% drawdowns. The Nasdaq 100 fell 30% in 2020 and 37% in 2022.

Position sizing is important when managing risk no matter the asset class.

Wrapping  Up

Gold and bitcoin are our best performing assets this year. Their slice of the pie is relatively small. We find them to be useful in diversifying returns.

While writing this, a song from 1982 with the same name as the album it’s on kept playing in our resident music nerd’s head. Simple Minds New Gold Dream (81-82-83-84).

Is gold going to find more love and is bitcoin evolving into the new gold? Stayed tuned.

Note: those numbers are the title of a record and lyrics to a song and should not be construed as investment advice or a prediction.

Now over to Victoria for some actual advice on spring training.

Health Is Wealth

Spring Training Tips for Summer Fun

As the weather begins to warm and the skies clear, our thoughts naturally turn to spending more time outdoors, soaking up the sun and enjoying the fresh air. However, if we’re aiming to make this summer our best one yet, there are a few important factors to consider. After all, with each passing year, we gain a little more wisdom, coupled with the potential consequences of a more sedentary winter.

Whether your summer plans involve perfecting your swing on the golf course, exploring scenic hiking trails, dominating the tennis court, engaging in a spirited game of pickleball, or pedaling through picturesque cycling routes, it’s essential to approach your preparations with intentionality and care.

First and foremost, let’s address the reality of aging. While we may not have the same youthful vigor as we did in summers past, that doesn’t mean we can’t be in prime shape for the activities we love. It’s all about adapting our approach to fitness and being mindful of our bodies’ needs as we age. Incorporating targeted exercises to maintain strength, flexibility, and balance can go a long way in ensuring that we’re able to enjoy our chosen activities to the fullest.

Many of us find ourselves hunkering down indoors during the colder months, which can lead to decreased muscle mass, reduced cardiovascular fitness, and overall stiffness. With a gradual reintroduction to physical activity and a bit of patience, we can regain our stride and prepare our bodies for the summer ahead.

Whether it’s dusting off your golf clubs and hitting the driving range, gradually increasing your hiking mileage, getting back into the rhythm of tennis or pickleball, or taking leisurely spins on your bike, remember to start slowly and listen to your body. Rome wasn’t built in a day, and neither is peak summer fitness.

In addition to physical preparation, don’t overlook the importance of proper nutrition and hydration. Fueling your body with nutrient-rich foods and staying adequately hydrated will not only support your physical endeavors but also enhance your overall well-being.

As you map out your summer plans, remember that preparation is key. By acknowledging the realities of aging, gradually reintroducing physical activity, prioritizing proper nutrition and hydration, and listening to your body’s cues, you’ll be well-equipped to make the most of the warm weather and enjoy a summer filled with outdoor adventures. So, lace up those hiking boots, grab your racket or paddle, dust off your clubs, and get ready for a summer to remember!

‘You have to sustain it, to maintain it’

Victoria Bannister
ICM Health Ambassador

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