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VRS - who has written 41254 posts on Opalesque Commodities Briefing.


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Commodity markets diverge as supply and demand come to the fore

Posted on 03 July 2015

Divergence was the name of the game for commodities markets in the second quarter as gasoline and iron ore jumped but coffee and nickel plunged and money flowed into index investments and out of exchange traded funds. Led by crude, commodities enjoyed a strong start to the quarter but the rally fizzled out as oil prices moved sideways and the US dollar stabilised, bringing fundamentals such as supply and demand to the fore.

China and commodities: Cornering the markets

Posted on 03 July 2015

The world’s biggest consumer of commodities is no longer just an insatiable buyer of everything from coal to gold. A richer, slower-growing and choosier China is becoming an exporter as well as importer. It is also using its clout to change the way commodities are traded, bringing markets closer to home and drawing up rules that suit its needs instead of those of producers and Western financiers.

‘New normal’ in Australia commodities – low prices and strong volumes

Posted on 03 July 2015

The big picture is that Australia is receiving less money for its commodity exports, with the value dropping 11 per cent to A$174 billion (US$133.8 billion) in the 2014-15 fiscal year. “New normal” is a term coined about China’s transition to slower but hopefully more sustainable economic growth, but it can be equally applied to many commodity markets.

New oil bull market in sight as Brazil, Iraq cut output targets

Posted on 03 July 2015

Massive downward revisions to oil output in Brazil and Iraq have increased the risks for oil markets of going from the current feast to famine within just a few years, leading to a price spike that would give a new boost to the U.S. shale industry.

Oil Oversupply Meets Rising Demand in Quietest Market Since 2013

Posted on 03 July 2015

The sleepiest oil market since 2013 will probably limp through the second half of the year as well. Crude traded in a $5 range in June, the narrowest in 19 months. Volume was the lowest since December and open interest - - the number of futures contracts outstanding — was the least since January.

Oil Price Forecast: Shale 2.0 Will Keep Supply Abundant

Posted on 03 July 2015

When we first started getting substantial oil from fracking and horizontal drilling, the news about costs indicated that oil production would decline at a fast rate when prices were low, pushing prices back up. New data, however, argue for rising productivity of shale oil development—meaning plenty of petroleum to keep prices low.

Oil Falters After Rig Count Grows

Posted on 03 July 2015

The amount of rigs drilling for oil in the U.S. rose for the first time in seven months, triggering a slump in crude oil prices to their lowest settlement in two months. U.S. oil producers added 12 rigs last week, breaking 29 straight weeks of cuts, in response to prices that have rebound to- and stayed at $60 a barrel since late April.

China clamours to set global gold prices

Posted on 03 July 2015

A bored security guard walks around the entrance hall of an unremarkable 11-storey building in downtown Shanghai, desperate to kill time. The receptionist, a young Chinese woman, is flopped across her desk, half-asleep. It’s a mid-June afternoon at the Shanghai Gold Exchange (SGE), China’s one-and-only trading platform for the yellow metal, but the place is not exactly bustling with activity.

Indian gold still at heavy discount, inventories keep rising

Posted on 03 July 2015

The heavy discount on physical gold remains intact across much of India this week while high inventories and dwindling demand continue to take their toll. Discounts are still averaging around $8 per ounce to the London spot price on .995 gold in Ahmedabad, a gateway for gold into Mumbai, although larger international dealers are still holding out for smaller discounts or even parity on some higher-quality brands, they said.

The real reason gold has been falling

Posted on 03 July 2015

There is too much bullishness among gold market timers, and that’s why the yellow metal has failed to respond to the macroeconomic factors that otherwise should have caused it to rally. Imagine being told a month ago how the Greek debt crisis would unfold over the next few weeks. If you knew then that the country would default on its debt, you probably would have forecast that gold would rally.

Gold not getting boost from investors seeking safe haven from Greek crisis

Posted on 03 July 2015

The precious metal stays in trading range as Greece lives on the edge of default due to tepid inflation, muted demand for gold from China and a strong U.S. dollar. Despite some early noise to the contrary, Greece’s financial woes are having almost no impact on gold prices, so far.

Is Silver a Good Investment Today?

Posted on 03 July 2015

With silver prices flat for the year, is silver a good investment to make right now? Silver has not performed nearly as well as its high-flying days of 2009-2011, when it quadrupled in price. But that doesn’t mean the metal doesn’t have value to your portfolio. Let’s delve into some relevant aspects of the silver market to determine whether now is a good time to invest in silver.

A Test Of $1,163 Is In the Cards For Gold– MKS

Posted on 03 July 2015

While some commodity analysts have noted that the gold market hasn’t benefited from the ongoing Greek financial crisis as the price have continued to slide and remain near a three-week low, one analyst says it is important to shift your perspective .

Palladium prices bounce from oversold levels

Posted on 03 July 2015

Precious metals had a volatile day – at the day’s lows they were down 0.9 percent on average, with silver off 1.7 percent at one stage, while they ended the day mixed with palladium up 0.9 percent, while gold, silver and platinum prices closed down 0.5 percent, with gold at $1,173.50.

Iron ore in biggest daily fall since March

Posted on 03 July 2015

Iron ore suffered its biggest one day percentage drop since March, falling by more than 5 per cent, as shipments of the steelmaking ingredient heading to China continued to pick-up. Iron ore was one of the top performing commodities in the second quarter rising more than 20 per cent. One trigger for the rally was a late buying spree by Chinese steel producers ahead of the peak summer demand period. But another factor was lower than expected volumes from Australia.

Secondary rhenium supply growth to cater for new demand: Roskill

Posted on 03 July 2015

Rising demand for rhenium in aero engines is likely to be satisfied by increasing supply of secondary rhenium contained in “engine revert” produced from end-of-life gas turbine parts, UK-based consultancy Roskill Information Services said Thursday.

Here’s why ETFs are a growing part of total trading value

Posted on 03 July 2015

Many people have asked me how important ETF’s are. The simple answer is, they are important and getting more important. They are a significant portion of trading activity on all the exchanges. How important?

Top 10 Best Performing ETFs at Midyear 2015

Posted on 03 July 2015

ETFs focused on Chinese equities delivered the biggest returns in the first half of the year, according to ETF.com data. “The strong performance was largely tied to a reform-minded government that has shown itself committed to do whatever it takes to grow and open up the stock market,” writes Cinthia Murphy in a ETF.com report.

Finding Investment Opportunities in Emerging Markets

Posted on 03 July 2015

Within emerging markets the Asian region provided the main winners in 2014 thanks to the sharp decline in the oil price. But what can investors expect from 2015? Emerging market investors had a difficult time in 2014, with returns lagging developed markets. Over the year as a whole the MSCI AC World Index showed a total return of 8.6% in sterling terms against a meagre 1.4% return for the MSCI Emerging Markets Index.

Brazil probes currency market activity of 15 global banks

Posted on 03 July 2015

Fifteen of the world’s largest banks are under investigation on suspicion of rigging the Brazilian currency, antitrust watchdog Cade said on Thursday, the first such probe in one of the busiest foreign exchange markets globally.

Switzerland’s Currency Conundrum

Posted on 03 July 2015

One topic currently dominates Swiss financial circles: Having abandoned its efforts to prevent the franc from appreciating beyond 1.20 to the euro, what does the Swiss central bank have left in its toolbox to prevent an economy-crushing drift toward parity for its currency?

EU’s Emissions Trading System Needs More Oversight to Improve Carbon Market

Posted on 03 July 2015

The European Commission should consider some changes to the bloc’s emissions trading system to further improve the working of the carbon market and increase investor confidence, the European Court of Auditors said on Thursday.

China’s Carbon Prices Collapse

Posted on 03 July 2015

Beijing has made a lot of headlines recently for its eco-friendly target setting, and central to many of these plans has been the implementation of regional carbon markets, and eventually the creation of a national system. So far things are not going exactly according to plan. Prices in five of China’s carbon markets have fallen sharply. Permits in the biggest pilot exchange in Guangdong have dropped 73 percent.

Global slump in agri commodities to persist: report

Posted on 02 July 2015

A major factor driving lower food prices globally is lower oil prices that is pushing down energy and fertilizer costs, the report said, adding, this will remove incentives for production of bio-fuels. Better crop yields and a slower growth in global demand will lead to a gradual decline in real prices of major crops over the next decade, said the Agricultural Outlook 2015-2024 released on Wednesday.

Commodities Break Their Ties

Posted on 02 July 2015

Tumbling oil prices and a historic rally in the U.S. dollar had commodity markets marching in lock step for months, but they broke ranks in the second quarter. Oil prices, which touched six-year lows in March, gained 24.9% in the second quarter on expectations of slowing supplies and higher demand.

China launches new oil and gas trading platform - Xinhua

Posted on 02 July 2015

A new trading platform for oil and gas was launched in China on Wednesday, state media reported, as the world’s largest energy consumer looks to extend its influence over global commodity pricing. The Shanghai Petroleum and Natural Gas Exchange (SHPGX), which is registered in the Shanghai free trade zone, will initially only handle natural gas transactions during a test run.

Iran eyes $100bn of western investment in oil industry

Posted on 02 July 2015

Iran is finalising a contract system to secure about $100bn of new oil and gas deals with western companies if sanctions are lifted. The move marks a big shift for a regime traditionally wary of of foreign groups participating in its energy sector.

U.S. crude prices tumble most since April on surprise stock build

Posted on 02 July 2015

U.S. crude prices fell 4 percent on Wednesday, posting their biggest daily drop since April after oil stockpiles in the United States rose for the first time in more than two months. The selloff was a jolt to crude traders and investors who have seen U.S. prices in fairly tight trading ranges over the past 10 weeks versus sharper moves down in European oil.

Oil Prices Hit Two-Month Low on U.S. Inventory Data

Posted on 02 July 2015

The U.S. oil glut is growing again, spurred by a sharp ramp up in production and threatening to put renewed pressure on crude prices. U.S. crude-oil stockpiles rose last week for the first time in nine weeks, according to a Wednesday report from the Energy Information Administration.

OPEC oil output hits three-year high in June on Iraq: Reuters survey

Posted on 02 July 2015

OPEC oil supply in June has climbed to a three-year high due to record or near-record output from Iraq and Saudi Arabia, a Reuters survey found, underlining the focus of the group’s top exporters on market share.

Greece is in crisis—why no love for gold?

Posted on 02 July 2015

People tend to flock to gold as a safe-haven investment during a crisis. So, why not in the case of Greece? There is no reason for gold to get any love now because this is a political crisis, not a currency crisis. The primary reason you buy the “barbarous relic” that is gold is fear of a global currency crisis.

Greece default: Why isn’t gold budging?

Posted on 02 July 2015

Gold’s stubborn non-reaction to Greece’s default on its crucial 1.5 billion euro repayment ($1.7 billion) to the International Monetary Fund (IMF) couldn’t be more disappointing to bullion bugs. The yellow metal reversed slight gains to trade around 0.3 percent lower at $1,169 on Wednesday, despite heightened uncertainty around the fate of the heavily-indebted nation.

UBS Asks, ‘Is Gold Ignoring Greece?’

Posted on 02 July 2015

UBS strategist Edel Tully wondered why gold seemed to be so disconnected from the Greek crisis. He noted that “developments in Greece don’t seem to be impacting gold in any meaningful way,” at least relative to “how the market has reacted in the past.”

Russia has no gold market, expert says

Posted on 02 July 2015

European investors have been buying gold coins actively against the background of the intensifying financial crisis in Greece. Restriction on cash withdrawals in Greece led to a sharp increase in demand for investment coins in Germany, France and in Greece. Pravda.Ru interviewed Finam’s analyst at the department for international markets, Vadim Sysoev, about the current state of affairs on the market of gold.

World’s best gold forecaster is solidly bearish on bullion

Posted on 02 July 2015

There will be no relief any time soon from gold’s worst losing streak in almost two decades, according to the most accurate forecaster for precious metals. After sliding about 1 per cent since December, prices will drop an additional 10 per cent by the end of 2015, reaching $1,050 (U.S.) an ounce – a five-year low – predicts Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore.

Investing in the Next Silver Bull Market

Posted on 02 July 2015

There was a recent article on the SilverSeek website. It states that the paper market for silver futures is now over one billion ounces, most of which represents a naked short position in silver. The article says that the Comex silver market is the most corrupt in history, which is obviously quite subjective and a pretty tough accusation to prove.

Aluminium, zinc rebound on hopes for demand, Greek deal

Posted on 02 July 2015

Most base metals rebounded on Wednesday on brighter prospects for a Greek bailout deal and after solid U.S. economic data that spurred hopes for stronger demand. Many investors scrambled to close out short positions after profiting from sharp falls over the past two days when some metals hit multi-year lows.

Rough Days Ahead for Platinum ETF

Posted on 02 July 2015

Thanks to a stronger dollar led by expectations of higher interest rates, many of the commodities have been reeling under pressure this year. The broad-based DB Commodity Index Tracking Fund (DBC) is down 4.5% this year, indicating that the pain has been felt across the broad.

Alternative Investments, ETFs Are Increasingly Popular

Posted on 02 July 2015

Institutional investors and hedge funds are expected to significantly raise their allocation to alternative investment strategies ahead. With exchange traded funds, any investor can access alts strategies as well.

World’s first diamond exchange will go live in Singapore in September

Posted on 02 July 2015

The Singapore Diamond Investment Exchange Pte Ltd (SdiX) on Wednesday announced it will launch the world’s first commodities exchange in physically settled diamonds in Singapore. The exchange is targeted to go live in September 2015.

India: Algorithmic trading in domestic commodities sees sharp spike

Posted on 02 July 2015

The share of trading based on algorithms, or algo trading in popular parlance, has seen a sharp rise in domestic commodity markets, amid regulatory concerns on the volatility that such trading can bring to the markets.

The 5 Best Stocks to Invest in Commodities

Posted on 02 July 2015

Commodities aren’t for the faint of heart, which is why it’s best to just stick with the best stocks in each commodity basket. Commodities have been giving investors fits for years. All four commodities have taken investors on triple-digit price rides with rapid ascends and devastating falls. It’s that allure of a rapid rise that continues to draw investors in with hopes of making a mint on higher prices.

How About a Global Currency?

Posted on 02 July 2015

It’s almost a truism to say that membership in the euro exacerbated the Greek crisis. The thinking goes like this: Because Greece doesn’t have its own currency, it couldn’t increase its competitiveness and boost growth through devaluation. Although devaluation is a valuable instrument, I think most countries and companies would benefit if the world, not just Europe, used a single currency.

Bitcoin’s price surges as Greeks rush to buy in

Posted on 02 July 2015

Greeks have rushed to Bitcoin as the country’s financial future hangs in the balance. The digital currency has risen seven per cent since Friday and, at £262, is at its highest level since March. Interestingly, gold – which has long been relied on as a store of wealth during crises – has actually fallen in value. The precious metal is priced 1 per cent lower than on Friday, at $1,168 a troy ounce.

Would Grexit spell disaster for Europe’s single currency?

Posted on 02 July 2015

The prospect of Greece leaving the euro has sent shock waves, not just through Greece, but also the eurozone. Greeks can look to the examples of Argentina and Iceland to see what experience may await them after default and devaluation. But the fate of the eurozone is more complex and uncertain.

Chinese carbon market doldrums may undermine climate efforts

Posted on 02 July 2015

Regulatory uncertainty and a lack of transparency have left trade on China’s seven pilot carbon exchanges in the doldrums, which could undermine efforts to cut the nation’s greenhouse gas emissions. China told the United Nations on Tuesday it would cap its emissions by 2030, and promised to cut carbon intensity - the amount produced per unit of economic growth - by 60-65 percent from 2005 levels by then as well.

EU Eyes Setting Aside Carbon Permits for Production Increases

Posted on 02 July 2015

The European Commission plans to propose earmarking a quota of permits in its carbon market after 2020 for companies entering the system and for potential production increases, according to a draft law.

A global history of emissions reduction schemes

Posted on 02 July 2015

In December, representatives from almost 200 countries will meet in Paris to sign a new global climate treaty. What can governments do to cut back on greenhouse gas emissions? For governments, carbon emissions reduction options fit into three broad categories. The first is the provision of direct subsidies or tax deductions for industries that move to a low carbon profile.

Commodities Jump Most Since February as Corn, Soybeans Rally

Posted on 01 July 2015

The outlook for smaller crop supplies sent corn and soybean prices surging, spurring the biggest gain for raw-material prices since February. The Bloomberg Commodity Index of 22 components rose 1.9 percent to 102.69 as of 3:30 p.m. in New York, on pace for the largest advance since Feb. 3. Corn soared the most since 2010, climbing 7.7 percent, the biggest gain among the asset class on Tuesday.

Basic Materials: China Slowdown Weighs on Commodities (With One Exception)

Posted on 01 July 2015

We expect coal, copper, and iron ore prices to remain below long-term averages as China continues to shift away from an investment-led economy. The basic materials sector is trading close to our aggregate fair values at a median price/fair value of 0.97 compared with a market price/fair value of 0.99.

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