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VRS - who has written 41667 posts on Opalesque Commodities Briefing.


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HSBC cuts 2015, 2016 gold price forecasts

Posted on 28 July 2015

HSBC strategists on Monday lowered their average annual gold price forecasts for this year and next, warning that gold prices are likely to remain under pressure in the short term and may “move within striking distance of $1,000″ an ounce before recovering. HSBC lowered its 2015 average annual price forecast to $1,160 from $1,234 and for 2016 to $1,205 from $1,275.

Deutsche Bank says gold’s fair value is $US750 an ounce

Posted on 28 July 2015

Gold prices may need to fall another 30 per cent to reach fair value, according to Deutsche Bank, with cheap oil the only potential lifeline for the battered precious metal. Gold is currently trading around $US1096, just above last week’s fresh five-year low of $US1072.30.

Silver Prices to Hit $50.00?

Posted on 28 July 2015

Despite the massive outflow of capital from commodities, a leading indicator suggests that silver prices are about to skyrocket. The last time silver priced approached $50.00 per ounce, it was preceded by a corresponding rise in this key metric.

Copper Drops to Lowest in Six Years Amid Chinese Slowdown

Posted on 28 July 2015

Copper slid to the lowest level in six years as the biggest selloff in Chinese equities since 2007 added to concern that the economy will worsen. The Shanghai Composite Index plunged 8.5 percent. China’s industrial profits fell in June, and data on Friday showed a private gauge of manufacturing unexpectedly declined in July to the lowest level in 15 months, boosting speculation that demand is slowing in the country.

Chinese spot alumina prices hold steady despite smelter cuts

Posted on 28 July 2015

Chinese spot alumina prices held steady Monday despite smelter cuts over the past week, industry sources said. However, with further cutbacks expected in the near term prices may be pressured lower, sources said.

Short sales of eurozone bond ETFs surges

Posted on 28 July 2015

Investors have sharply escalated their use of exchange traded funds as they seek a new way to sell exposure to eurozone bonds beyond the traditional avenues of cash and futures markets. The use of European bond ETFs for expressing a negative or short view on bond prices has surged past €500m in the first week of July.

Funds flow into agriculture as El Nino threatens crops

Posted on 28 July 2015

Funds are flowing back into agricultural commodities for the first time since 2012 as investors look to capitalize on cheap prices, bullish demand and the threat of crop damage from an El Nino weather pattern. Figures from ETF Securities, one of the largest issuers of exchange traded products, show a small net inflow so far this year after an outflow of nearly 20 percent in 2014.

Hedge funds are most bearish on U.S. oil since 2010: Kemp

Posted on 28 July 2015

Hedge funds are more bearish about the outlook for U.S. oil prices than at any time for almost five years, according to data from the U.S. Commodity Futures Trading Commission. Hedge funds and other money managers had a net long position in WTI-linked futures and options equivalent to just 118 million barrels of oil on July 21, down from a recent high of 294 million barrels 11 weeks earlier.

Currency Trade Drops From Tokyo to New York on Fed’s Reserve

Posted on 28 July 2015

Foreign-exchange trading declined around the world in April amid speculation the Federal Reserve will raise interest rates only gradually. Daily trading in the U.K., the largest currency market, fell 8 percent to average $2.5 trillion, down from October’s record of $2.7 trillion, according to a Monday statement from the Bank of England’s Foreign Exchange Joint Standing Committee.

ETS would be more cost-effective than higher renewables target, analyst says

Posted on 28 July 2015

An emissions trading scheme would be cheaper and more effective than Labor’s 50% renewables goal or the government’s Direct Action policy, Paul Hyslop says. The author of the $60bn price tag for Bill Shorten’s new renewable energy goal – cited by Tony Abbott as proof the scheme is unaffordable – says an emissions trading scheme like the one the Coalition abolished would be more cost-effective than either the coalition’s “Direct Action” plan or Labor’s new goal.

Inside China’s shift to a low-carbon economy

Posted on 28 July 2015

China’s announcement of how it plans to reduce its greenhouse gas (GHG) emissions represents the clearest signal to date that a major structural shift away from carbon-intensive development is underway in the world’s second-largest economy.

Deutsche Bank: Just because all commodities are falling doesn’t mean there’s one driver

Posted on 27 July 2015

Gold, copper, corn, wheat, iron ore. The list of commodities that have been falling and under pressure over recent weeks and months grows. It would be easy to think there is something they all have in common. A stronger US dollar, rising US interest rates, slowing Chinese growth?

Global Growth Worries Pummel Commodities

Posted on 27 July 2015

Investors are bailing on commodities amid mounting worries about the pace of global growth. New data showing China’s factory activity hit a 15-month low and a leaked Federal Reserve memo betraying concerns about how fast the U.S. is growing added to concerns Friday and accelerated the selloff of commodities—from oil to gold to copper.

The negative feedback loop broadens the commodities sell-­off

Posted on 27 July 2015

Goldman Sachs have been arguing since 2013 that commodities are caught in a “negative feedback loop between excess production capacity, US dollar appreciation and weaker EM economic growth”. They recently termed these three key themes the 3D’s of macro – deflation (excess production capacity and rising productivity), divergence (stronger US dollar and weaker EM currencies) and deleveraging (significant EM credit and macro imbalances).

Scoreboard: Commodities stampede

Posted on 27 July 2015

The rush to exit commodities turned into a stampede last week as a weakening Chinese economy and a surging US dollar put the fright into traders and led commodities to post-crisis lows. The sea of red in the Friday session was an all-too-familiar sight for miners as oil, gold and copper all slid in the wake of the softest reading on the Chinese manufacturing sector for 15 months.

Oil Bulls Flee at Fastest Pace in Three Years as Glut Expands

Posted on 27 July 2015

Speculators’ conviction that oil will rally weakened at the fastest pace in three years, just before futures tumbled into a bear market. The net-long position in West Texas Intermediate contracted 28 percent in the seven days ended July 21, U.S. Commodity Futures Trading Commission data show. Long positions dropped to a two-year low while short holdings climbed 25 percent.

Oil groups have shelved $200bn in new projects as low prices bite

Posted on 27 July 2015

The world’s big energy groups have shelved $200bn of spending on new projects in an urgent round of cost-cutting aimed at protecting investors’ dividends as the oil price slumps for a second time this year.

Oil Heading for Fall as Diesel’s Engine Sputters

Posted on 27 July 2015

If you want to understand why oil is back below $50 a barrel and likely headed much lower once summer ends, start with PetroChina’s stock prices. Mainland-listed shares in China’s national oil champion are up 27% so far this year, while their Hong Kong-listed equivalents are down 9%.

Commodities in a meltdown, but coal, uranium offer some hope

Posted on 27 July 2015

From super-cycle to commodity meltdown was the way one group of analysts titled a report last week. “Sentiment toward commodities as an asset class has rarely, if ever, been more negative,” added Capital Economics.

Signals from gold prices

Posted on 27 July 2015

The yellow metal dominated the world market scene all of last week. Gold slumped to a five-year low, slipping to an intra-day low-point of $1,072.30 by Friday. A late rally that day, however, pushed prices back to around $1,100 an ounce. At best, it helped pare losses from last Monday when the price slid to its lowest since March 2009, to $1,088.05 an ounce.

Here’s why gold is doomed

Posted on 27 July 2015

A little less than four years ago, the world looked like it was about to end and gold hit an all-time high of $1,895 an ounce. The United States had manufactured a debt crisis, and Europe hadn’t been able to manufacture a solution to its actual debt crisis, so panicky investors sought safety in the same place they had for 5,000 years: a shiny rock.

Gold price meltdown points to its waning lustre

Posted on 27 July 2015

Historically, gold buying has been fuelled in a scenario when the U.S. dollar has been weakening. This is how gold came to be bestowed a ‘safe haven’ status. The sharp decline in gold price early last week and the subsequent tepid buying of the metal in international markets point to gold’s clear falling out of favor among investors at least for now.

Gold Slump Not Over as Speculators Go Net-Short for First Time

Posted on 27 July 2015

The slump in gold that took prices to a five-year low may have further to run after hedge funds swung into a net-short position for the first time. The shift in New York futures and options came as speculators increased their bearish wagers to the highest since the U.S. government data begins in 2006. Long holdings declined for a fourth week.

India must determine own gold price, feels IBJA

Posted on 27 July 2015

Gold prices are fixed internationally by the London Bullion Market Association (LBMA) and these are indicated to importers by banks and nominated agencies in India. Now industry body IBJA (formerly Bombay Bullion Association) wants to play a larger role and is tying up with CME Group, London for deriving a price mechanism similar to LBMA.

The nickel price can only go up

Posted on 27 July 2015

It’s a strange time to be in mining. Irrational exuberance has been replaced by irrational despondency. Just four-five short years ago even the flimsiest prospect or project could look forward to lavish funding and a fat market cap.

ETFs get the edge on hedge funds

Posted on 27 July 2015

They’re touted as the best instruments to diversify your portfolio by those who market them, including BlackRock, the world’s largest asset manager. The marketing plan appears to be working, as investors have ploughed more funds into exchange-traded funds (ETFs) than hedge funds, according to research firm ETFGI.

Gold ETFs: 25 months of continuous outflow

Posted on 27 July 2015

Fresh sales of gold ETFs remain muted, thanks to continuous weakness in gold prices for over two years, coupled with a negative outlook amid a strong stock market. Indian retail investors continue to sell their gold exchange-traded funds (ETFs). Although gold ETFs used to be one of the fast-growing asset classes, attracting a rising number of investors, they are now falling out of favour.

9.4 trillion reasons why Europe needs a weak currency

Posted on 27 July 2015

Continued ultraloose European Central Bank monetary policy, accompanied by a weak, or indeed weaker euro, must be an essential part of a euro zone policy toolkit being deployed to tackle a broader debt management issue than just that of Greece. That has major implications for Asia’s investors and manufacturers with euro zone exposure.

Ghana’s Cedi is world’s best performing currency - Economist

Posted on 27 July 2015

Last year Ghana’s currency, the cedi, was the world’s worst-performing currency. Now, in a remarkable turn-around, it’s the world’s best-performing currency. But beware. The cedi’s 26% surge this month is based on misplaced optimism about the economy, according to both Morgan Stanley and Rand Merchant Bank, a unit of Africa’s biggest lender.

The world waits on Australia’s emissions targets

Posted on 27 July 2015

With a UN conference in Paris in November aimed at setting emissions targets, Bill Shorten’s pledge for renewable energy generation assumes significance beyond run-of-the-mill politicking. Opposition Leader Bill Shorten has elevated the stakes in a climate change debate that will help to define campaigning for the coming federal election, due within 18 months.

China’s climate change plan represents decisive move

Posted on 27 July 2015

Chinese premier Li Keqiang recently unveiled the country’s plan for combating climate change. While it could have been more ambitious, the plan shows China’s leaders are serious about changing the country’s development path. It critically undermines those in the West who claim that climate action should be delayed because China is doing nothing.

Commodities slump: Is there trouble ahead for the global economy?

Posted on 24 July 2015

There’s gobs of money chasing assets these days but there’s no “bubble” in commodities, which are tanking. It’s not just gold, which gets a lot of headlines; nearly all major global industrial commodities are back to 2009 levels — including coal, gas, oil, iron ore and copper. Agricultural commodities such as wheat, coffee and sugar have also fallen on hard times.

Investors dump commodities for the second half

Posted on 24 July 2015

Oil and metal prices have faced a beating this year, with fresh data showing investors have been offloading commodities in the last quarter on fears that interest rate hikes later in the year will toss up even more market volatility.

Commodities Hit The BRICs

Posted on 24 July 2015

Aside from $ trillions in monetary stimulus from the world’s major central banks, a major source to the recovery from the 2008-9 global financial crisis emerged from the BRICs economies. The dependence on commodities exports from Brazil, Russia and China proved instrumental in these economies’ rapid comeback thanks to the cushion from rapid gains in agricultural and energy prices from 2002 to 2008.

Commodities to hit rock-bottom in 2015 before ‘modest recovery’, says World Bank

Posted on 24 July 2015

Commodity prices – including major Australian exports like iron ore and coal – are expected to hit rock-bottom in the second half of 2015 before picking up in 2016, according to the World Bank’s third-quarter commodity markets outlook.

China’s rising commodity exports changing nature of trade: Russell

Posted on 24 July 2015

The world is used to seeing China as an importer of raw materials and an exporter of manufactured goods, but a change is occurring that has global implications for commodities. While China is still the world’s biggest importer of commodities, the nature of its exports are changing.

Moody’s Says Low Oil Price Here to Stay as Russia Bleeds Capital

Posted on 24 July 2015

Low oil prices are just the tip of what ails Russia, according to Moody’s Investors Service. With its dependence on commodities and a slump in investment, Russia will have a hard time recovering from its record economic slump as global oil prices are bound to remain lower for a long time, Yves Lemay, managing director in the sovereign risk group at Moody’s in London, said in an interview on Wednesday.

Oil Prices Enter Bear Market Amid Global Glut of Crude

Posted on 24 July 2015

U.S. oil prices sank into a bear market Thursday as a global glut of crude shows little sign of abating. Prices had settled below the key $50-a-barrel mark for the first time since early April on Wednesday, and they kept falling for most of Thursday.

In Commodities Meltdown, Gas Is a Fleeting Bright Spot

Posted on 24 July 2015

In the meltdown that is the commodities market, natural gas has emerged as a bright spot, barely touched by the turmoil that’s contributed to a global slump. Oil has tumbled 19 percent over the past three months on the Bloomberg Commodity Index, and gold is down 8.6 percent, helping send the gauge to a 13-year low this week. And U.S. natural gas? Up 5.5 percent. That’s because shipments are limited for now to North America, where hot weather has boosted demand for the power-plant fuel.

What Should the Government Do About Low Oil Prices?

Posted on 24 July 2015

Oil prices have been down this year. How should policy makers respond? We put this question to a group of energy researchers, professionals, and other experts. They presented a variety of suggestions that run the gamut—from imposing a carbon tax to letting the market run its course.

Oil Returns to Bear Market as U.S., OPEC Output Prolongs Glut

Posted on 24 July 2015

West Texas Intermediate futures dropped 1.5 percent Thursday to close at $48.45 a barrel. The grade has lost 21 percent in the past six weeks, meeting the common definition of a bear market. The slide in prices has cut the value of the crude futures market in half since 2013, exchange data shows.

2017 could prove to be gold’s ‘magic’ year

Posted on 24 July 2015

Gold might have lost 40 percent of its price over the last four years, capping a stellar 10-year bull run, but analysts are already predicting a possible bottom for the precious metal. Hovering around a five-year low on Thursday at $1,102 an ounce, gold has been hit by low inflation, a stronger dollar and fears over Chinese demand.

Gold: The Unusual Commodity

Posted on 24 July 2015

Gold has had a challenging week. Its price has been very volatile due to the nature that it is driven by investor sentiment and economic confidence. Gold it is a peculiar commodity, in so far that it is very light considering its value and doesn’t spoil. Unlike corn or coffee it cannot be consumed, therefore it doesn’t have a kind of fundamental demand.

Falling gold prices boost demand in India: World Gold Council

Posted on 24 July 2015

A fall in gold prices has boosted demand in India, the world’s second largest consumer, despite the summer months being a traditional quiet period, World Gold Council (WGC) said. It also said that fall in the gold prices are not universally perceived as “negative”. According to WGC, gold prices have fallen by 3.2 per cent in India, 3.6 per cent in China and 1.2 per cent in Turkey.

Investors pulling back as gold prices plunge

Posted on 24 July 2015

With gold prices tumbling to a five-year low, investors aren’t just getting out of gold, they’re betting against it. Speculators in July amassed record short holdings in the metal, meaning they’re wagering that the price has further to fall. Also telling, the number of hedge funds that are hoping to profit from declines is near a record high.

Gold Price Headed to $450.00? $2,000 is More Likely

Posted on 24 July 2015

A friend recently said to me, “No matter how you look at it, the gold price is going down to $450.00.” He argued that there’s simply no reason for the yellow metal to trade at $1,100 now.

Chinese magnesium spot export offers slip on weak buying, domestic prices

Posted on 24 July 2015

Spot export offers for Chinese magnesium ingot on a FOB basis slipped on prevailing weak overseas demand and lower domestic prices, industry sources said Thursday. Platts lowered its magnesium ingot (minimum 99.8%) price assessment to $2,120-$2,160/mt FOB China Thursday, down from $2,120-$2,180/mt on lower indications heard from the market.

With Base Metals Leading Commodities Down, Prepare for More Market Volatility

Posted on 24 July 2015

Commodities have been in a falling market since 2011, but, so far, this year has been more of a flat market for commodities. We expect to see some movement soon. The rising US dollar has been a key factor in driving commodities down and although the dollar still strong, it has been taking a break for the past seven months from its meteoric rise while posting a flatter trajectory.

Global ETF Assets Surpassed Global Hedge Fund Assets In Q2 of 2015

Posted on 24 July 2015

Assets invested in the global ETF/ETP industry have surpassed the assets invested in the hedge fund industry at the end of Q2 as we had forecasted.

Here’s why ETFs are overtaking hedge funds

Posted on 24 July 2015

The active versus passive debate just got a new wrinkle, and one analyst thinks he knows why. Exchange-traded funds, which are the primary vehicle for passive management, now have assets under management greater than hedge funds, according to a count from research firm ETFGI.

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