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VRS - who has written 39856 posts on Opalesque Commodities Briefing.


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Is HSBC really closing gold vaults?

Posted on 25 March 2015

A rumor that HSBC is rapidly and quietly closing gold vaults where clients gold bullion was stored and gold in the GLD ETF is stored has been swirling around the internet. After conversations with key players in the industry including a bullion dealer who used the safety deposit boxes for storage and delivery to clients, we can now confidently say that the speculation was incorrect.

Iron ore price jumps past $US55

Posted on 25 March 2015

The price of iron ore has again surged past $US55 a tonne, after it had held below that mark for three out of the prior four trading sessions. At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US55.60 a tonne, up 2.6 per cent from its prior close of $US54.20 a tonne.

Is nickel finally back on track?

Posted on 25 March 2015

At the outset of 2015, the once-stable base metal segment suddenly became a precarious one, recording a bear market rally that sent an alarming signal to investors. Even nickel, whose early January trading was considered exemplary, eventually succumbed to a series of weak prices.

Palladium ETFs see biggest weekly outflow since August

Posted on 25 March 2015

Palladium-backed exchange-traded funds saw their biggest weekly outflows since August last week as prices of the white metal reversed the trend of the last two years to fall as gold, silver and platinum rose. Palladium ETFs, popular investment vehicles which issue securities backed by physical metal, saw outflows of nearly 50,000 ounces in the week to Friday, Reuters data showed.

Oil ETF investors, not just OPEC, hold sway over crude market

Posted on 25 March 2015

Tumult in Libya, U.S. rig counts, production plans of the oil exporting cartel and a pact on nuclear relations with Iran can all affect crude supply and demand, but oil traders have kept an equally close watch on retail investors in recent weeks.

Are Currency Hedged ETFs Overheated?

Posted on 25 March 2015

The big trade of 2015 has undoubtedly been the movement towards currency-hedged ETFs as a way to participate in the upside of international markets, while eliminating the underlying currency risks. These ground breaking funds accomplish this by owning a basket of international stocks with simultaneous exposure to short positions in the host country’s currency.

Hedge funds achieve outstanding performance as most indices are in positive territory

Posted on 25 March 2015

Hedge funds achieved an outstanding performance during last week and were up 1.3%. More than 75% of the funds as well as most hedge funds indices are in positive territory, according to Lyxor Asset Management’s Weekly Briefing. The report said that hedge funds have continued to deliver solid returns in 2015 with the Lyxor HFI up 3.4% year-to-date. The first quarter of 2015 is on track to be the best quarter for hedge funds since Q2-2007 when the Lyxor HFI was up 3.7%.

Taiwan’s commodity price bulletin board to go online soon

Posted on 25 March 2015

As part of efforts to promote the transparency of data on commodity prices, Taiwan’s Executive Yuan or Cabinet is establishing a commodity price bulletin board that will be put online by the end of the month, Vice Premier Chang San-cheng said Monday.

The astounding rise of China’s currency: Don Pittis

Posted on 25 March 2015

I sometimes wonder how the Communist revolutionary leader Mao Zedong, who warned against taking “the capitalist road,” would feel about his face on all those Chinese bills being traded around the world these days. As of this week, the renminbi is being traded in a major way in Canada as well, after Finance Minister Joe Oliver opened North America’s first Chinese currency trading hub Monday night in Toronto.

The Worst Performing Currencies Of 2015

Posted on 25 March 2015

Speculators, hedgers and investors alike utilize currency markets. International corporations or those companies that import and export must also pay careful attention to fluctuations in foreign exchange (FOREX) rates. Typically, currency prices exhibit low volatility; however, as the first quarter of 2015 draws to a close, it is worthwhile to take a look at the worst performing currencies year to date.

China should link southern carbon markets ahead of nationwide scheme -study

Posted on 25 March 2015

Academics that advise the government on carbon trading in China have proposed linking two emissions exchanges in the southern province of Guangdong as a first step towards integrating all seven of the country’s pilot markets.

Impact of China’s Carbon Policies on Buisness

Posted on 25 March 2015

Seismic policy shifts are underway in China as it transitions toward a lower-carbon, more resource efficient economy, according to a series of new reports by the International Institute for Sustainable Development (IISD).

India: Special commodity markets for perishable commodities proposed

Posted on 24 March 2015

In order to develop the prospect of onion and other perishable commodities like vegetables in the domestic and international market, the ministry is proposing to set up special commodity markets with processing units for perishable vegetables.

Next Five Years Will Bring Huge Changes To China’s Commodity Demand

Posted on 24 March 2015

Remember the commodity super-cycle? It was pedaled by the Chinese. It made smart investors like Jim Rogers filthy rich. That story is over, as everyone now knows. And the next five years are going to bring huge changes to the country’s demand for raw materials, especially coal and oil.

HSBC eyes commodities

Posted on 24 March 2015

HSBC Global Asset Management, an arm of HSBC Holdings, is buying bonds of commodity exporting countries because their valuations have dropped so far with the plunge of oil prices, an executive said. The firm, which managed $454 billion of assets at the end of December, is also increasing its exposure to beaten-down currencies of countries such as Russia and Brazil because of attractive valuations, said Olga Yangol, a vice-president and senior product specialist for emerging markets.

The price of oil is going lower: Trader

Posted on 24 March 2015

With OPEC signaling over the weekend that it would not change course and cut production, expect oil prices to fall even lower, trader Jeff Kilburg said Monday. Traders are “looking for more of a bearish short-term output,” the founder of KKM Financial said.

Crude oil prices heading to $35 by June: FGE

Posted on 24 March 2015

Global crude oil prices could trade between $35 to $40 a barrel by the end of the second-quarter of 2015, according to one of the world’s leading oil experts. Prices could even dip beyond those levels for a brief period, warned Fereidun Fesharaki, chairman of FACTS Global Energy (FGE).

Oil Starts Move Down to $20

Posted on 24 March 2015

CNBC ran an article about a prediction by FACTS Global Energy that oil could drop to $35 a barrel soon, and then go much lower. Saudi officials say they will keep production at the levels they are now. Slowing economies in the European Union and China will cripple demand for crude. Citigroup analysts have not retracted their prediction that oil will drop to $20. The forecasts of a collapse of oil prices, so loud in February, have returned.

Keeping oil below $100 will shut shale out of market, says Saudi official

Posted on 24 March 2015

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, said Mohammad al-Madi, Saudi Arabia’s governor to OPEC. “I think it will be difficult to reach $100 or $120 another time,” Madi said at a conference in Riyadh on Sunday. “This will let the high-cost producers come back again.”

Oil won’t breach $100 again - OPEC exec

Posted on 24 March 2015

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, according to Saudi Arabia’s governor to OPEC.

Lower oil prices proving a bonus for China even as demand falls

Posted on 24 March 2015

The “new normal” of lower growth that premier Li Keqiang talks about is also having an impact on demand for oil and other commodities. Lower prices for oil and other commodities are delivering China serious savings in its purchases of oil, iron ore and copper – by some estimates up to €232 billion a year.

Fed hike, Indian demand will be key for Gold: Barclays

Posted on 24 March 2015

A likely Fed hike and seasonal physical demand will determine the intensity for risks in store for Gold, a report by Barclays said. In Q315 gold will likely be caught between scope for disinvestment as markets look for a rate hike and seasonal physical demand materializing from India.

Gold Prices Will Hit Record On Surging Asian Demand, ANZ Says

Posted on 24 March 2015

With Japan all set to become the sole owner of Japanese government bonds and equity ETFs and with ECB officials explicitly promising to print euros until the market finally gives up and submits to “monetary dominance,” the utility of owning a barbarous yellow relic may be less clear as it appears that the path to eternal prosperity runs parallel to the road where printing worthless paper to buy other worthless paper somehow doesn’t dead end at the intersection of “absolutely broke” and “massive bubble.”

Societe Generale trims average gold price forecast to $925 per Oz

Posted on 24 March 2015

The French Bank Societe Generale in its latest report forecasts that gold prices having given away all its early year gains is headed further lower, as dollar gains strength. SocGen expects the bear market in gold to continue further. The gold prices are likely to average at $925 per Oz between 2016 and 2019.

How to Rig the Gold Market

Posted on 24 March 2015

New technologies bring new changes to our world. One small change just happened in the financial world, although it is not on most people’s radar. The old gold fix – which was a conference call that took place twice a day – has been replaced by a new electronic gold fix. The old gold fix was a century old and consisted of four banks – Barclays, HSBC, Bank of Nova Scotia, and Societe Generale.

What Investors Need to Know About the LBMA Gold Price

Posted on 24 March 2015

When the London silver fix came to an end last year after operating for more than a century, many market watchers wondered if the London gold fix would be next. Ultimately, the answer turned out to be “yes.” The London Bullion Market Association (LBMA) decided in November to put ICE Benchmark Administration in charge of the fix, stating that it would take over in the first quarter of 2015 and noting that an electronic system would be put in place.

Palladium ETFs record biggest weekly outflow since August

Posted on 24 March 2015

Palladium-backed exchange-traded funds saw their biggest weekly outflows since August last week as prices of the white metal reversed the trend of the last two years to fall as gold, silver and platinum rose.

Pluses and pitfalls in the ETF revolution

Posted on 24 March 2015

Exchange traded funds are the phenomenon of the moment. Money is pouring in and ETFs are proliferating. They have transformed how many savers invest their money and the way investment advisers and brokers do business.

European commodity trading firms baulk at tougher rules

Posted on 24 March 2015

Commodity trading houses and energy companies are making a final attempt to win exemptions from European regulations that are set to subject them to the same capital requirements as banks. In a report published on Monday, Trafigura, one of the world’s leading commodity traders, said there was “little justification” for proposals that would impose substantial requirements but not reduce risk in the financial system.

Ag prices ‘may rebound’, after hedge funds turn most bearish ever

Posted on 24 March 2015

Agricultural commodity futures may be poised for a wave of support from covering of short bets, after a selldown by hedge funds left them, by a distance, with their most bearish ever positioning. Managed money, a proxy for speculators, dropped long positions on agricultural commodities by more than 40,000 lots in the week to last Tuesday, while hiking short bets – which profit when prices fall - by some 110,000 contracts, regulatory data show.

Hedge funds get short of US oil as storage fills

Posted on 24 March 2015

Hedge funds have turned super-bearish about US oil prices as concerns about running out of storage trump the drop in the number of rigs drilling new wells. Money managers had amassed a record number of short positions in futures and options contracts linked to WTI (West Texas Intermediate) by the end of March 17, equivalent to 209 million barrels of oil, according to the US Commodity Futures Trading Commission’s (CFTC) latest commitments of traders report published on Friday.

Why Currency Weakness Could Pave the Road To Growth

Posted on 24 March 2015

Is it a coincidence that the U.S. economy’s post-crisis recovery came hand in hand with a weak dollar? Could the U.K.’s rebound have something to do with sterling’s 2007-08 crash? And is there any connection between the fact that both the British and American economies seem to be running out of steam just as their currencies strengthen? Or that the eurozone is simultaneously recovering?

Why China Wants Yuan to Be the World’s 5th Reserve Currency

Posted on 24 March 2015

China is a step closer to obtaining Special Drawing Rights status for its currency from the International Monetary Fund, a move that would see the yuan joining the greenback, euro, yen and British pound.

Does Putin’s Proposed Eurasian Currency Union Make Sense?

Posted on 24 March 2015

At a meeting in Kazakhstan last week, Russian President Vladimir Putin proposed a currency union for the members of the Eurasian Economic Union (EAEU). Russia, Kazakhstan, Belarus, and Armenia are the current members, and Kyrgyzstan is scheduled to join later this spring. Does a common currency for the EAEU make sense? Not in economic terms, but perhaps there is a political subtext that makes the proposal more understandable.

Climate change: Coalition accused of politicising greenhouse gas target

Posted on 24 March 2015

Greg Hunt says figures exaggerated under Labor but former Liberal leader John Hewson says both parties use same projections and that such interference is ‘damaging to the national interest’.

Is Fossil Fuel Divestment A Bad Idea?

Posted on 24 March 2015

The fossil fuel divestment movement has exploded in popularity over the last several years, thanks in parts to the massive efforts of groups like 350.org, the group behind Fossil Free, the organizers of Global Divestment Day. In addition, the sweeping divestment movement is particularly attractive to tertiary education institutions around the world, and each month closes with more universities and colleges around the world announcing their divestment from fossil fuel investments.

Next Five Years Will Bring Huge Changes To China’s Commodity Demand

Posted on 23 March 2015

Remember the commodity super-cycle? It was pedaled by the Chinese. It made smart investors like Jim Rogers filthy rich. That story is over, as everyone now knows. And the next five years are going to bring huge changes to the country’s demand for raw materials, especially coal and oil.

Commodity Traders Aren’t Too Big Too Fail, Trafigura Report Says

Posted on 23 March 2015

Commodity traders don’t pose systematic risks to the global financial system and shouldn’t be subjected to bank-style regulation, according to a paper published Monday by the second-largest metals trader Trafigura Beheer BV.

Return to $100 Oil Seen Unlikely by Saudis Amid Shale Surge

Posted on 23 March 2015

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, said Mohammed al-Madi, Saudi Arabia’s governor to OPEC.

OPEC won’t support oil’s price alone, says Saudi minister

Posted on 23 March 2015

OPEC will not take sole responsibility for propping up the oil price, Saudi Arabia’s oil minister said on Sunday, signalling the world’s top petroleum exporter is determined to ride out a market slump that has roughly halved prices since last June.

Keeping oil below $100 will shut shale out of market: Saudi official

Posted on 23 March 2015

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, said Mohammad al-Madi, Saudi Arabia’s governor to OPEC. “I think it will be difficult to reach $100 or $120 another time,” Madi said at a conference in Riyadh on Sunday. “This will let the high-cost producers come back again.”

Oil Price Drop Hurts Spending on Business Investments

Posted on 23 March 2015

Prospects for an uptick in business investment this year are facing a major drag: The collapse in oil prices is spurring significant cutbacks by the energy-production industry, which had been a standout in an otherwise lackluster U.S. economic expansion.

ANZ forecasts surge in gold demand and price

Posted on 23 March 2015

More gold-related investment offerings could be on the cards for local investors given estimates that demand for the precious metal is set to double in the region over the next 15 years. ANZ commodity strategist Victor Thianpiriya told The Sunday Times: “The country is already quite advanced when it comes to such options”, but there is still “room for more”.

LBMA Gold Price successfully launched

Posted on 23 March 2015

The LBMA Gold Price has replaced the historic London Gold Fix. The first LBMA Gold Price settled at $1,171.75. ICE Benchmark Administration (IBA) administers the “LBMA Gold Price”. They provide the auction platform, methodology as well as overall independent administration and governance for the LBMA Gold Price. The LBMA holds the intellectual property rights.

Gold fix replacement gets more participants, no Chinese yet

Posted on 23 March 2015

At least six companies can set daily gold prices through an electronic auction that on Friday replaced the century-old London fixing ritual. Thursday was the last day that Societe Generale SA, Bank of Nova Scotia, HSBC Holdings Plc and Barclays Plc agreed twice- daily rates by phone. The four banks, UBS Group AG and Goldman Sachs Group Inc can take part in the new LBMA Gold Price run by ICE Benchmark Administration that set prices at US$1,171.75 an ounce this morning.

How Indian gold prices are fixed

Posted on 23 March 2015

How are the benchmark prices for gold in India fixed? The truth is that there is no commonly accepted benchmark. Given that there is no physical market where gold is bought and sold, participants still rely on informal gold price quotes disseminated by the jewellery trade.

Is the tide turning for Precious Metals?

Posted on 23 March 2015

Has the tide begun to turn for the precious metals, notably silver and gold? In our view the turn began last year and if pressed to pinpoint one event, it would be following the failure of the Swiss referendum when the SNB de-pegged the franc from the euro. The Swiss National Bank was frustrated with the continued depreciation of the Euro. This had as much to do with sentiment as it did with the SNB clearing seeing the Euro might be going the way of the Rentenmark.

Iron ore price bounces to $US55

Posted on 23 March 2015

Iron ore has enjoyed a rare positive session after a tumultuous week that saw the commodity sink below $US55 a tonne for the first time since 2009. At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US55.00 a tonne, up 0.9 per cent from a six-year low of $US54.50 a tonne.

New Hong Kong brokers focus on metals trading

Posted on 23 March 2015

A new breed of broker, focused purely on trading commodities, is applying for licences from Hong Kong’s securities watchdog. Listed metal trading firm Lee Kee will start offering commodities broking in the city during the second quarter, after the Securities and Futures Commission granted it a futures broker licence last month.

Exchange-traded funds set to eclipse hedge funds in 2015

Posted on 23 March 2015

The global Exchange Traded Fund industry is likely to eclipse the global hedge fund industry this year on total size despite having only been around for half as long, according to eminent ETF commentator Deborah Fuhr, of independent research group ETFGI.

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