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VRS - who has written 37062 posts on Opalesque Commodities Briefing.


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Commodities Drop to 5-Year Low in Capitulation to China

Posted on 23 September 2014

Commodities extended declines to a five-year low on speculation that a stronger dollar and signs of slowdown in China will curb demand for raw materials. The Bloomberg Dollar Spot Index has climbed for the past five weeks and Chinese data from industrial production to manufacturing was below economists forecasts.

Panic as commodity index plunges

Posted on 23 September 2014

“An unbiased, major barometer of commodity prices,” is how Thomson Reuters describes its CRB Continuous Commodity Index. And that’s why it’s so important. But the equally-weighted index is falling fast and last week plunged through major support levels.

High Oil Prices Are No Defense Against Risk Of Stranded Assets

Posted on 23 September 2014

There has been much concern in the financial community recently about the risk of “stranded assets” in the oil industry, particularly if governments introduce strict carbon regulations to fight climate change and therefore reduce demand for oil, which would reduce the price.

Why Oil Prices Are Dropping Despite Mideast Unrest

Posted on 23 September 2014

Canada’s oilpatch is basking in an extended sweet spot of sorts. Commodity prices aren’t spiking in a way that’s sure to sink the global economy, nor are they plumbing depths that would force small producers out of business and big players to start tightening their belts and cutting jobs.

Moody’s cuts price assumptions for natural gas, oil through 2015

Posted on 23 September 2014

Moody’s Investors Service last week reduced its assumptions for average spot prices for North American natural gas after a mild summer cut demand for gas-powered electricity. Moody’s also cut its assumption for the spot prices for the two benchmark barrels of crude, European Brent and West Texas Intermediate (WTI). Oil prices dropped this past summer due in part to slower economic growth in some of the world’s major economies, a strengthened U.S. dollar, and growing non-OPEC supply, Moody’s said.

Russia and OPEC look like they are in a slump, but it is only a phase

Posted on 23 September 2014

Russia and OPEC are under challenge from Western-led sanctions and the surge of US oil production, but it’s only a pause: both will be back stronger, according to a new report.

Oil prices fall on sluggish demand, ample supply

Posted on 23 September 2014

Crude oil futures fell on Monday as ample supply and slowing economic growth in Europe and China outweighed expectations of a cut in oil output from the Organization of the Petroleum Exporting Countries (OPEC).

Gold-silver price ratio may fall as gold cools faster

Posted on 23 September 2014

The price of gold might fall more than that of silver this year, taking the price ratio between the two precious metals back towards its five-year average. Gold has been on a downtrend as pickup in global economies has reduced demand for this safe asset. This may offer music to the ears of Indian consumers, as they begin to purchase jewellery for the festival and marriage seasons.

Gold bullion offer prompts investment warning

Posted on 23 September 2014

Investment analysts have urged investors to be cautious after the Royal Mint launched a new website selling gold and silver coins. On offer are single gold Sovereigns costing £197, larger gold Britannias at £800 and £19 silver coins.

Gold eyes 1175 as USD does it like 2005

Posted on 23 September 2014

Gold’s 10% decline to fresh 8-month lows from its July highs and its 16% drop from its August 2013 highs, and intensified in late August as the end of the Fed’s QE3 became inevitable. The simultaneous rally in bond yields and the US dollar since early September helped accelerate gold’s downward momentum below $1270 to reach a new low for the year at $1208. Considering the US dollar is rallying in ways not seen since 2005, gold weakness is here to stay.

Gold Mining “Hurt Long-Term”, Output “Peaking in 2014″

Posted on 23 September 2014

Gold mining output worldwide is set to peak and then “plateau” in 2014, according to the leading data analysts, as today’s lower prices force producers to cut exploration spending in a bid to boost profit margins. “It seems inevitable,” says the new Gold Survey 2014 Update from Thomson Reuters GFMS, that the mining industry’s response to 2013’s gold price crash “will be detrimental to mine supply levels in future years.”

Silver hammered to 4-year low as gold and base metals retreat

Posted on 23 September 2014

Silver prices slid to their lowest in four years on Monday, with the prospect of rising U.S. interest rates undermining precious metals and industrial commodities dented by worries over Chinese demand.

Nickel Prices Decline to Five-Month Low on China Outlook

Posted on 23 September 2014

Nickel tumbled to a five-month low on concern that demand will ebb in China, the world’s biggest user of industrial metals. Economic growth in China, Asia’s largest economy, faces downward pressure, Finance Minister Lou Jiwei said.

Zinc Reaches For The Sky in The Months Ahead

Posted on 23 September 2014

My goal is to keep readers ahead of the curve in the commodities markets. Several months ago, I told readers that zinc would be the next base metals superstar. Sure enough, The Wall Street Journal just reported that zinc is trading at a three-year high – nearly $2,400 per metric ton, or $1.10 per pound.

Concerns over slower growth in China pull metal prices lower

Posted on 23 September 2014

The base metals generally ended last week on a weak footing having failed to feel that the Chinese stimulus package, or FOMC statement had improved the outlook. Given the run up in many of the metals prices over the summer, which at the time looked as though prices were running ahead of the fundamentals, it now looks as though it is correction time with fund long liquidation generally weighing on prices.

Goldman Sachs files for active ETFs, joins Wall Street bank trend

Posted on 23 September 2014

Goldman Sachs Group Inc has laid the groundwork to launch actively managed exchange-traded funds, becoming the latest Wall Street bank to set its sights on the fast-growing market.

Inverse Gold ETFs: Volatility Drag Is Noticeable

Posted on 23 September 2014

Over the last few years I have examined leveraged index ETFs and reverse ETFs for evidence of volatility drag: that is, the penalty owners of the shares suffer because of the need to rebalance the ETF’s portfolio at the start of each trading day. An example of the mathematics of volatility drag is shown here.

Will the slump in oil ETFs continue?

Posted on 23 September 2014

In the beginning of the year, oil prices witnessed smooth sailing. This was largely thanks to a chilly winter and escalating geopolitical tensions, which helped to buoy prices. However, the favorable demand-supply conditions, which once led crude oil prices to trade above the triple-digit mark, are now waning.

Funds Turn Bearish Silver, CFTC Data Shows

Posted on 23 September 2014

Large speculators turned bearish in their Comex silver futures and options net holdings, according to data in one of the reports compiled by the Commodity Futures Trading Commission.

Indian commodity bourses see turnover sink 59% in Apr-Aug’14

Posted on 23 September 2014

The turnover of the commodity bourses fell by about 59 per cent to 24.46 lakh crore during the April-August period of this fiscal on sharp decline in bullion and energy futures, according to the latest FMC data.

Currencies of Commodity Exporters Drop on China Outlook

Posted on 23 September 2014

Currencies of commodity-exporting nations dropped as a gauge of raw materials slid to a five-year low on speculation demand will drop after China signaled slower economic growth. The Australian dollar sank to a seven-month low against its U.S. counterpart, dropping against most of its 31 major peers, while South Africa’s rand and Brazil’s real weakened.

Bitcoin: Commodity Investment or Currency?

Posted on 23 September 2014

Bitcoin has had a highly volatile period amidst some difficult events. The Wall Street Journal today weighs the pros and cons of it as an investment or payment system. It is treated as a commodity by the IRS and the same as gold in this category. The past year has brought publicity to Bitcoin due to the Silk Road incident of drug dealing on its website and the anonymous hacking theft that left Mt. Gox, the largest Bitcoin Exchange, in bankruptcy this past February.

World Bank leads carbon pricing push before UN Climate Summit

Posted on 23 September 2014

The World Bank said Monday that 73 national and 11 regional governments and some 1,000 companies will join forces to push for policies setting a price on carbon emissions to encourage a shift to cleaner energy technologies.

We’re at a tipping point over climate

Posted on 23 September 2014

Across the globe, political and economic leaders have come under increasing pressure to live up to their words on climate change. And, on the eve of the U.N. Climate Summit taking place in New York, it seems we might even be at a tipping point in the global battle against climate change.

Climate Change Is Single Biggest Risk To Global Economy - Paulson

Posted on 23 September 2014

Few were more tightly involved with managing the financial crisis than Henry Paulson, Treasury Secretary during President George W. Bush’s administration. Speaking Monday, he said the stresses that nearly brought down the U.S. financial sector are now playing out in climate.

China’s slowing economy and stronger dollar signal end of the ‘iron age’

Posted on 22 September 2014

Investors in mining and physical commodities should be adjusting their portfolios. Like the cavalry charging over the hill at the last moment, commodity traders are praying that China’s government will come to the rescue of flagging prices with more economic stimulus measures designed to boost the world’s biggest consumer of industrial raw materials.

Commodities slump to five-year low

Posted on 22 September 2014

Commodities slumped for a third week in a row to their lowest level since July 2009 as economic data pointed towards continued weakness in China. Meantime, the US Federal Reserve is continuing on track towards the beginning of normalising rates sometime next year. In Europe, the European Central Bank began its long-term refinancing operation (LTRO) while the biggest ever IPO, Alibaba, hit the market.

Hedge Funds Make Record Bet on Lower U.S. Diesel Prices

Posted on 22 September 2014

Speculators are making their biggest-ever bet on lower U.S. diesel costs after expanding stockpiles drove prices to a two-year low.

Why Cheaper Oil Is Not A Big Threat For Gulf Economies

Posted on 22 September 2014

The price of Brent crude has sunk by nearly $20 from its June peak to as low as $96 a barrel in recent weeks, its lowest level since mid-2012. Falling oil prices may prove the best medicine for economies in the Arab world, rebalancing growth towards countries struggling to recover from the Arab Spring uprisings without doing major damage to the oil exporters of the Gulf.

With LNG Export Battle Won, Are Oil Exports Next?

Posted on 22 September 2014

Building on its success in getting the U.S. government to approve exports of natural gas, the oil and gas industry has moved on to the export of crude oil. To be sure, the campaign has been underway for quite a while. The four-decade old ban has been under attack over the past year because of the glut of oil that has come onto the market.

Rather than boon for Japan, U.S. shale oil is still rip-off

Posted on 22 September 2014

The oil industry in the United States is booming with the shale gas revolution — a major technical breakthrough for extracting oil and gas trapped within shale formations. This led President Barack Obama on June 24 to lift the 39-year-old ban on petroleum exports.

Saudi Arabia plays a complicated game with oil prices

Posted on 22 September 2014

The recent sharp fall in oil prices shows a game within a game. Brent crude has lost nearly US$20 since June to fall below $100 a barrel, its lowest level for two years, even as Saudi Arabia cut 400,000 barrels per day from its production. The Saudis compete against non-Opec producers, while playing both with and against their Opec peers.

Gold Bulls Extend 2014 Exit as Slump Erases $6.7 Billion

Posted on 22 September 2014

Hedge funds extended this year’s longest exit from bullish gold bets as slumping prices and investor outflows since June erased $6.7 billion from the value of exchange-traded funds backed by the metal.

“Gradual” Gold Bull Market to Start 2015, “Next Floor at $1200″ Says GFMS

Posted on 22 September 2014

Gold’s decade-long bull market is set to resume in 2015, albeit “gradually” from a new bottom according to a new forecast from the market’s leading data analysts, Thomson Reuters GFMS. Thanks to gold’s rally over the first half of 2014 from $1200 to $1400, the consultancy says today in the first Update to its Gold Survey 2014, “Price sensitive [consumer] markets have seen sales slow.

Gold prices tumble, ‘no compelling reason’ to buy

Posted on 22 September 2014

Hedge funds extended this year’s longest exit from bullish gold bets as slumping prices and investor outflows since June erased $US6.7 billion from the value of exchange-traded funds backed by the metal.

India: 40 Years Ago…and now: Gold - From control to seamless trade

Posted on 22 September 2014

In 1963, when then finance minister Morarji Desai banned gold futures, as part of the Gold Control Act, members of the Bombay Bullion Association didn’t know what hit them. In the crisis that followed, the association had to sell its front building at Zaveri Bazaar to pay for its members’ losses.

China’s long term gold plans

Posted on 22 September 2014

The launch of Shanghai Gold Exchange trading yuan denominated contracts in the China (Shanghai) Pilot Free Trade Zone Thursday, which has enabled foreign investors to invest in China’s physical gold bullion market, is yet another one of China’s overt moves to dominate the global gold sector long term.

Precious metals may get more precious regardless of price

Posted on 22 September 2014

The silver market is always one day from panic. The same could be said for the bond market or the dollar. In the age of electronic price discovery and massive reckless monetary imbalance anything can happen - and it probably will.

Iron ore price at new five-year low

Posted on 22 September 2014

The price of iron ore has again sunk to a five-year low, falling to its lowest level since September 2012 on continued fears of a supply-demand imbalance. Benchmark iron ore for immediate delivery to the port of Tianjin in China is currently trading at $US81.70 a tonne, down 1.6 per cent on its $US83 closing mark in the previous session and below the previous five-year low of $US81.90 set on September 11.

Bats to launch trade reporting service for ETFs

Posted on 22 September 2014

Bats Chi-X Europe, the stock exchange, is to begin a trade reporting service for exchange traded funds (ETFs) in a bid to bring more order and transparency to the fragmented market. The UK-based exchange is seeking to create a tape of record for the ETF market, in which the majority of instruments are traded over-the-counter.

ICE Seeks Participants in Commodities Warehousing Survey

Posted on 22 September 2014

Intercontinental Exchange Inc. on Friday said it was asked by a U.S. regulator to solicit responses from market participants to a survey on the effect of warehousing on commodity prices.

Morgan Stanley: A Top Brokerage Getting Back Into Commodities

Posted on 22 September 2014

Morgan Stanley has quietly working on plans to build and manage one of the first compressed natural gas export facilities in the U.S. The move marks the bank’s re-entry into the physical commodities business. It has a 23 page app filed with the Office of Fossil Energy at the Department of Energy. It’s hoping to build operate a facility for compression and containment of nat gas in Texas. Its capacity could be up to 60 billion cubic feet of CNG annually.

U.S. Wheat Prices Pushed to Four-Year Low

Posted on 22 September 2014

U.S. wheat prices sit at the lowest level in more than four years, buffeted by sluggish demand for U.S. supplies amid abundant global stockpiles of the grain. Bumper crops around the world have added to supplies, driving global prices lower and reducing demand for U.S. wheat which, when shipping charges are added, is more expensive than grain produced in places such as the European Union and Ukraine.

Is It Time to Invest in Bitcoin?

Posted on 22 September 2014

For some investors—those with stomachs for volatility—it may be time for a closer look at cryptocurrencies. By now, most investors have heard of bitcoin, following its phenomenal growth last year. Bitcoin, an electronic currency made by computers creating series of unique numbers through complex math problems, is sold on unregulated exchanges and accepted by a growing number of individuals and businesses because of the speed and low cost of transactions.

CHF: Still A Sell Vs This Currency - Credit Agricole

Posted on 22 September 2014

We expect the CHF to remain a sell on rallies, in particular versus commodity currencies such as the CAD. This is due to stable risk sentiment and as there is room for the SNB to turn more dovish in the months to come.

Merkel’s Taste for Coal Poised to Upset $130 Billion Green Drive

Posted on 22 September 2014

When Germany kicked off its journey toward a system harnessing energy from wind and sun back in 2000, the goal was to protect the environment and build out climate-friendly power generation.

Big Oil’s heirs join call for action as climate summit opens

Posted on 22 September 2014

For 140 years, the Rockefellers were the oil industry’s first family, scions of a business empire that spawned companies called Exxon, Mobil, Amoco and Chevron. So it was no trivial matter when a group of Rockefeller heirs decided recently to begin severing financial ties to fossil fuels.

What shipping can tell us about the global economy

Posted on 19 September 2014

Global trade remains a key economic indicator, but don’t believe everything you read. The economy is recovering, Right? Look at the latest government data, and it’s not entirely clear. The Labor Department in September reported disappointing growth in employment, but other surveys for the same period said the labor market was strong.

The Inexorable Rise of Asian Commodities Buyers

Posted on 19 September 2014

Labeling importers in Asia Pacific as keen buyers of commodities, especially crude oil and natural gas, is right on the money and somewhat unremarkable. Emerging markets are all about development and growth plans needing materials and fueled largely by hydrocarbons.

Commodities: Back On A Steady Course‏

Posted on 19 September 2014

Overall, we are looking for higher global economic growth next year - however, recently worries have emerged that economic growth in China is slowing down. In turn, the acceleration of growth expected in Q3 has failed to materialise and we could see a further decline in growth in Q4.

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