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VRS - who has written 37015 posts on Opalesque Commodities Briefing.


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Russian Central Bank Fears Weak Oil Price Could Threaten Economy

Posted on 17 September 2014

The Bank of Russia said that the ruble and the Russian economy could be hit by sliding prices for commodities—the country’s key exports—if oil prices fail to recover in the midterm.

Global oil demand sinks but lower Australian dollar pushing up the price of fuel

Posted on 17 September 2014

The falling Australian dollar may be good news for exporters, but it will drive up the price of fuel. After hitting a 15-month low earlier in September, petrol and diesel prices are expected to head upwards, despite a much lower oil price on the back of rapidly dropping demand.

Gold Steadying On Physical, Safe-Haven Demand

Posted on 17 September 2014

The combination of improved physical demand in Asia combined with safe-haven buying are helping gold continue to steady after last week’s weakness, with the U.S. gold futures modestly higher so far Tuesday for the second day in a row.

Zimbabwe to revive gold market?

Posted on 17 September 2014

The Zimbabwean government has decided to lower the royalty on gold from 7% to 5% in an attempt to boost gold production from the country. The government decision is expected to breathe new life into the Zimbabwean gold mining industry, which has been struggling for a long time.

Can Gold Recover?

Posted on 17 September 2014

Gold recently fell to its lowest level in seven-and-a-half months as the dollar rose to a 14-month high. Easing tensions in Ukraine and the Middle East also acted as a drag on gold and Silver prices. Investors have been asking the obvious question as to whether gold can recover from here and if a bottom of at least short-term duration is imminent?

Why Goldman Sachs Is Wrong On Gold

Posted on 17 September 2014

Wall Street powerhouse Goldman Sachs has recently reiterated its negative view on gold, which it has held for the past year. However, it is now doubling down on this view and advising clients to actually go short the metal. Jeff Currie, head of commodity research at Goldman noted “Our target is really driven by the view that we think that the Fed will ultimately be the dominate force here and put more downward pressure [on prices]“.

John Paulson Pays A High Price For His Adventure in South African Gold

Posted on 17 September 2014

John Paulson might have won a battle but he’s losing the war with his big bets on gold. The billionaire fund manager was a key player in forcing one of the world’s biggest gold mining companies, AngloGold Ashanti, to pull the plug on a $2.1 billion rights issue but as the dust settles the value of his 6.6% stake in the stock is sharply lower, and the price of gold keeps falling.

Profitability Is Gold Mining’s Biggest Issue – Randgold’s Mark Bristow

Posted on 17 September 2014

Without batting an eye, Randgold Resources Ltd.’s Mark Bristow, chief executive officer, bluntly said profitability is the biggest issue facing the mining industry today. Speaking with Kitco News at the 25th Denver Gold Forum, Bristow didn’t hold back when asked on where the blame should be spread as the sector struggles with profitability.

Is It Time to Buy Market Vectors Gold Miners ETF

Posted on 17 September 2014

Over the past month, I’ve written two articles about Market Vectors Gold Miners ETF discussing both reasons it could be a good investment and reasons it could lose value. The yellow metal is a divisive topic in the investing world. Some people tout gold investing — whether in gold itself through a vehicle like the SPDR Gold or in gold miners as a proxy for gold — as a safe and market-beating way to invest. Others are stoutly against gold as an investment vehicle.

Predicted Iron Ore Demand Could Fuel Steel ETF

Posted on 17 September 2014

Steel prices–and thus steel companies and ETFs–are driven in part by the price of iron. Analysts are expecting the price to fall near term, but see reasons for a late year rally. Iron To Fall, Then Rally? The price of iron ore is hanging around the $82/ton level and some analysts are looking for a short-term drop of another 15 percent before the bottom is formed.

Currency Strategy In A World of Risk

Posted on 17 September 2014

With emerging markets underperforming global markets over the past month, Deutsche Bank offers its thoughts on currencies, with a long position in Brazil’s real and some hope for Latin America. With an eye to global risks, the U.S. dollar strength and the European Central Bank’s quantitative easing, Deutsche writes:

Could Bitcoin Become Scotland’s Official Currency?

Posted on 17 September 2014

With Thursday’s Scottish independence referendum too close to call, opponents of an independent Scotland have been stressing the would-be country’s lack of a reliable currency. An independent Scotland could either keep using the British pound and lose control of its monetary policy, join the eurozone’s well-known squabbles, or create a new national currency that’s almost certain to be weak. But there’s an intriguing fourth option: adopting an online crypto-currency such as Bitcoin.

A Step Too Short: Obama’s New Carbon Pollution Rules Must Be Strengthened

Posted on 17 September 2014

Earlier this summer, in a crucial albeit insufficient step to mitigate climate disruption, President Obama proposed a rule to limit carbon pollution from existing power plants. The administration predicts that it would result in a 30 percent reduction of carbon pollution from power plants below 2005 levels, by 2030.
It establishes targets for each state and encourages them to meet these targets by improving the efficiency of coal plants, switching to natural gas, increasing reliance on renewable energy and/or reducing energy demand. These actions will, hopefully, reduce the amount of carbon [...]

We can avoid climate change, and boost the world’s economy – if we act now

Posted on 17 September 2014

The global economy is undergoing a remarkable transformation which is altering our ability to deal with climate change. The growth of emerging economies, rapid urbanisation and new technological advances are making possible a new path of low-carbon growth in ways that were not apparent even five years ago.

Commodities Extend Decline to Lowest Since July 2009

Posted on 16 September 2014

Commodities rose after touching the lowest level in more than five years on signs demand growth is weakening in China, the biggest consumer of energy and metals, and on speculation U.S. borrowing costs may rise next year.

Commodities brace for more woe ahead of Fed rate decision

Posted on 16 September 2014

Major commodity markets, many already trading near multi-year lows, could face more pressure should the U.S. Federal Reserve fuel fresh gains in the U.S. currency this week, weighing on dollar-priced raw materials.

Russia’s energy minister to meet OPEC as oil price falls more

Posted on 16 September 2014

Russian Energy Minister Alexander Novak will meet OPEC officials on Tuesday in Vienna, his spokeswoman said, as oil’s price fall piled pressure on Moscow’s budget. The annual meeting had been planned long before oil fell below the $100 per barrel level critical for Russia’s oil sales which account for 40 percent of state budget revenues.

Oil Prices Fall as China Data Fuel Demand Concerns

Posted on 16 September 2014

Global oil prices deepened their slide Monday after weak industrial and retail data from China raised concerns about demand for crude. The global Brent crude contract on the ICE Futures Europe exchange fell 46 cents, or 0.5%, to $96.65 a barrel, the lowest settlement since June 28, 2012. Brent is down 17% from the 2014 high reached in mid-June. The October Brent contract expired with the close of trading Monday.

Libya, Iraq Insecurity May Hit Future OPEC Supply Prospects

Posted on 16 September 2014

Amid a continuing slide in global oil prices, the head of OPEC has said political insecurity in Iraq and Libya could affect the oil-producing cartel’s future output prospects.

Russia’s challenge to an oil-hungry world

Posted on 16 September 2014

The oil price may be falling and global demand is “remarkably” subdued, according to a report last week from the International Energy Agency. But this has not stopped the former chief executive of BP, Tony Hayward, from issuing an uncomfortable warning.

Gold prices to remain under pressure next year too

Posted on 16 September 2014

Gold prices in the global market are likely to remain under pressure and rule below $1,200 an ounce next year, a global convention was told. “We expect gold prices to remain low next year too. Once gold slips below $1,200, it could head towards $1,175. The positive thing about the fall is that physical buying could emerge once prices drop to $1,200 levels,” said Cameron Alexander, Manager, Precious Metals, Thomson Reuters GFMS, at a price outlook session at the 11th India International Gold Convention – 2014.

Why Goldman Sachs is Wrong on Gold

Posted on 16 September 2014

Wall Street powerhouse Goldman Sachs has recently reiterated its negative view on gold, which it has held for the past year. However, it is now doubling down on this view and advising clients to actually go short the metal. Jeff Currie, head of commodity research at Goldman noted “Our target is really driven by the view that we think that the Fed will ultimately be the dominate force here and put more downward pressure [on prices]“.

Gold industry needs ‘cleansing’ of weakest miners

Posted on 16 September 2014

The gold industry, recovering from the worst slump in prices in 30 years, needs more mergers to help improve investor returns and eliminate unprofitable mines, Fidelity Investments said. About a third of gold production is probably money-losing when the price of the metal is lower than $1,250 an ounce, said Joe Wickwire, who manages more than $1.8 billion of assets including the Fidelity Select Gold Portfolio.

Why ECB QE Is Bearish For Gold Prices

Posted on 16 September 2014

The recent action by the ECB appears to have caught many gold bulls off guard. A common interpretation of the impact that a potential quantitative easing program would have on gold prices was that it would be very bullish. This argument was based on the concept that money printing is bullish for gold, and that QE1 and QE2 by the Fed triggered major rallies in the yellow metal.

New gold contract to set Singapore up as a global gold hub?

Posted on 16 September 2014

Singapore continues its push to be a global gold hub. Further details emerged at the weekend about the planned launch by Singapore of a new 1kg physically deliverable gold contract for the Asian wholesale gold market.

Marc Faber emphasizes need for gold

Posted on 16 September 2014

Veteran investor Marc Faber, author of The Gloom, Boom and Doom Report, reiterated the need for gold in a diversified portfolio when interviewed last week on CNBC. Faber, a resident of Thailand, is an advocate of gold storage in Singapore, and believes that a diversified portfolio will help protect against future market corrections which he believes are on the horizon.

Uranium: Not if but when

Posted on 16 September 2014

Presenters at a uranium seminar organised this week by the London branch of Women in Mining, and sponsored by Fission Uranium, from a broad spectrum of the industry were all in agreement that uranium prices would likely rise substantially, but perhaps not yet - only in the medium to long term.

China alumina price rises to Yuan 2,700/mt despite lower metal prices

Posted on 16 September 2014

The Platts ex-works Henan alumina assessment rose Yuan 60 from Friday to Yuan 2,700/mt ($439/mt) on Monday for 70:30 cash and credit payment terms on limited spot availability and in anticipation of seasonal restocking in the fourth quarter despite lower domestic metal prices, sources said.

Copper price hits three-month low

Posted on 16 September 2014

Copper futures have fallen to their lowest level in nearly three months as investors bet that slower economic expansion in China will weigh on demand for the industrial metal. The most actively traded contract, for December delivery, settled US2.10c, or 0.7 per cent, lower at $US3.0855 a pound on the Comex division of the New York Mercantile Exchange.

Iron Ore Rebound Seen by Morgan Stanley as Vale Sees $100

Posted on 16 September 2014

Iron ore is heading for an end-of-year rally as some high-cost supplies are closed and steel demand picks up, according to Morgan Stanley, which said prices may first extend losses by a few more dollars before rebounding.

Silver ETF holdings set record high as price drop sparks interest

Posted on 16 September 2014

Holdings at the world’s largest silver-backed exchange-traded funds (ETFs) rose to a record high as a pullback in prices prompted long-term retail investors to increase purchases of the precious metal.

Who’s winning the ETF fee war? Hopefully, you are

Posted on 16 September 2014

Exchange-traded fund providers, including Vanguard, Charles Schwab and BlackRock’s iShares, have been slashing the expense ratios on their index ETFs in the past two years, trying to one-up each other and win more of your investing money.

Shine Comes Off Gold ETFs As Dollar Gains Strength

Posted on 16 September 2014

Gold continues to lose its luster. Last week, spot gold went on a five-day losing streak. Prices melted from $1,270 to $1,228 an ounce in New York trade, a drop of 3%. The metal fell to a six-month low as the European Central Bank moved to revitalize European economies. Those moves strengthened the dollar, which put downward pressure on gold.

The real problem for commodity nations is currency, not prices: Russell

Posted on 16 September 2014

The pressing problem for some resource-rich countries isn’t that prices for commodities have dropped sharply, it’s that their currencies haven’t dropped in tandem. The plight of Australia and Indonesia, the major commodity exporters in the Asia-Pacific region, is driven home by the fact that their currencies have actually gained against the U.S. dollar this year, even as commodity prices have plunged.

Scottish currency dilemma causes pound-ing headache

Posted on 16 September 2014

For all the recent scaremongering about the viability of an independent Scotland, it’s easy to understand why the chance to reclaim a country’s sovereignty offers its citizens an exciting prospect. Scotland is, after all, culturally distinct from the rest of the British Isles.

The Return of the Currency Wars

Posted on 16 September 2014

When a country’s economy grows too slowly, the standard short-term remedies are to increase government spending, cut taxes or reduce interest rates. When none of those options is available, governments often resort to pushing down their currencies to make their exports more attractive to foreigners (and, these days, to push up import prices and thus bring inflation back up to desired levels).

For The World’s Biggest Companies, Carbon Taxes And Trading Are Inevitable

Posted on 16 September 2014

An increasing number of big corporations expect governments worldwide to put a price on carbon dioxide emissions to help tackle climate change and some are already factoring in the cost to guide future investment decisions, a report found on Monday.

EU polluters to land EUR5bn windfall under ‘carbon leakage’ proposal

Posted on 16 September 2014

European commission report assumes an unrealistically high carbon price, in move expected to cost governments billions. Heavily-polluting industries are in line for a €5bn (£4bn) handout from Europe’s taxpayers because of the way the EU is measuring their exposure to unregulated competitors outside the bloc, according to an unpublished report prepared for the European commission.

Commodities index tumbles to five-year low

Posted on 15 September 2014

One of the world’s leading indices for commodities has dropped to its lowest level in five years, casting doubt over renewed investor interest in the sector. After a record year of net withdrawals in 2013, sentiment towards commodities has started to improve this year helped by strong returns and declining correlations with other assets classes.

We Continue To Like Our Buy View For Commodities

Posted on 15 September 2014

Our expectation for rising prices of the commodity market is a result of the improvement in the global economy. The last few months have been dominated by the stabilization in the global economic cycle and reduction in system risk. We have seen signs of improvement in labor market figures, capital expenditure, consumer spending, and business confidence.

Hedge Funds Cut Bullish Crop Bets to Lowest Since January

Posted on 15 September 2014

Hedge funds cut bullish wagers on agricultural commodities to the lowest since January before the U.S. forecast rising grain supplies and sent wheat, corn and soybean prices to four-year lows. Money managers lowered their net-long position on crops from coffee to wheat in 10 of the past 11 weeks, U.S. government data show. Investors got more bearish on sugar and have the most-negative outlook on soybeans since 2006.

China commodity finance costs spike after Qingdao fraud

Posted on 15 September 2014

Rising costs and delays in issuing letters of credit driving SMEs out of the market but global and local banks are still active in the business. The cost for financing commodity imports has increased steeply in China as banks begin to raise margin levels and step up due diligence investigation on clients after the Qingdao fraud that saw 25 international and local lenders lose up to $4.5 billion when traders reused copper collateral multiple times.

Oil price slide sets the stage for M&As

Posted on 15 September 2014

As the oil price slides, nervous oil executives are wondering how low it can go. Brent crude hit its lowest level in two years last week, raising questions about how the industry – and the large international oil groups in particular – would cope with a sustained period of weakness.

OPEC Chief Sees Oil Price Rebounding by Year End

Posted on 15 September 2014

OPEC’s chief said on Friday that no emergency meeting is being considered as he expects oil prices to rebound by the end of the year. The Brent oil price—the most widely used international benchmark—fell below $100 a barrel this week and remained around $98 a barrel on Friday.

Current oil price level satisfies OPEC

Posted on 15 September 2014

The current level of oil price is satisfying to the Organization of Petroleum Exporting Countries (OPEC), Parviz Mina, the international petroleum consultant says. The price of $95 to $100 per barrel satisfies the OPEC producers as well as the main crude oil buyers, Mina, who served as a member of OPEC Long-Term Strategy Committee, told Trend Sept. 12.

Brent Crude Oil may fall to $96.75, 95 levels: Barclays|

Posted on 15 September 2014

Brent crude oil prices fell below $100 per barrel last week and there is a likelihood of prices faling to $96.75 and $95 per barrel, Barclays Research said. The market is adjusting to a situation when there is ample light sweet oil supplies amidst a relatively softer global oil demand growth, Barclays added.

Fracking Gives U.S. Energy Boom Plenty of Room to Run

Posted on 15 September 2014

Skeptics of the U.S. energy boom say it can’t last much longer because it requires drilling an ever-increasing number of wells. But the boom already has lasted longer than anyone would have imagined just a decade ago and has more room to run. That’s because oil and natural-gas wells have become more productive—an unrecognized but potent trend that should keep the fuels flowing.

Reasons For The Recent Decline In Gold Prices

Posted on 15 September 2014

Gold prices fell to their three-month lows in September. The London PM Fix gold price stood at $1,286.50 per ounce at the beginning of the month, with prices closing at $1,251 per ounce at the close of trading on September 10. Gold is often viewed as an inflation hedge and safe haven investment by investors.

Gold Industry Needs ‘Cleansing’ of Weakest, Fidelity Says

Posted on 15 September 2014

The gold industry, recovering from the worst slump in prices in 30 years, needs more mergers to help improve investor returns and eliminate unprofitable mines, Fidelity Investments said.

Pain for gold, silver price as hedge fund slash bullish bets

Posted on 15 September 2014

On Friday the price of gold fell again, reaching an 8-month low after five straight days of selling on the back of negative precious metals sentiment among large investors coupled with a strong dollar. On the Comex division of the New York Mercantile Exchange in after-hours Friday trade gold for December delivery slid below $1,230 an ounce, a 2.8% retreat for the week to levels last seen early January.

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