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VRS - who has written 42208 posts on Opalesque Commodities Briefing.


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Alternative investments: Helping investors weather the current market storm

Posted on 28 August 2015

The recent sharp sell-off in global equity markets has focused investors on the importance of holding diversifying investments that can help mitigate volatility and potentially cushion their portfolios during times of market stress. Given their unique nature, alternative investments are proving to be useful tools to help investors weather the current market storm.

Sound Money To Prevent Currency Wars

Posted on 28 August 2015

China devalued its currency, the resignation of the Greek prime minister revived doubts about the Euro, and the markets were expecting that in a few weeks the Federal Reserve was going to begin raising the interest rates. These three strikes—connected with monetary manipulations—was followed by a large decline in the stock market.

The UK winners from China’s currency devaluation

Posted on 28 August 2015

After years of pegging its currency to the dollar, China has taken the unexpected step of allowing its currency to depreciate. It is unclear exactly how much the renminbi will be allowed to fall, but there have been tangible consequences on global investments already.

On carbon, credit all leaders for failing us

Posted on 28 August 2015

Regardless of which party wins the Oct. 19 federal election, Canadians can look forward to being ripped off for billions of dollars in the international carbon trading market. Carbon trading is intrinsic to both NDP Leader Tom Mulcair’s and Liberal Leader Justin Trudeau’s carbon pricing plans, since both would use cap-and-trade schemes, supposedly to reduce Canada’s industrial greenhouse gas (GHG) emissions.

Recent Studies Provide Examples of Emissions Trading Successes, Failures

Posted on 28 August 2015

The emissions trading program in the northeastern United States—the Regional Greenhouse Gas Initiative (RGGI)—is responsible for about half the region’s emissions reductions—an amount far greater than reductions achieved in the rest of the country.

Behind the commodities bust

Posted on 27 August 2015

First was the dot-com bubble, then the housing bubble. Now comes the commodities bubble. We don’t fully understand the stock market’s current turmoil, but we know it’s driven at least in part by a bubble of raw material prices. Their collapse weighs on world stock markets through fears of slower economic growth and large financial losses.

Jim Rogers: Don’t rule out a bull run in commodities

Posted on 27 August 2015

Oil prices are trading near a six-year low, copper futures have shaved off 20% year-to-date and wider panic has grabbed the commodities market in fears over a sharp slowdown in China. There are plenty of reasons to be downbeat on the resources industry at the moment, but don’t count out a comeback for the depressed sector, says commodities veteran investor Jim Rogers.

Commodities are ripe for a rebound

Posted on 27 August 2015

Investors sentiment surrounding commodity prices is at its lowest level in decades — but some analysts believe that a rebound is on tap. “Investor sentiment for commodities has rarely, if ever, been more negative,” said Julian Jessop, an analyst at Capital Economics, in a note Wednesday. But there are “plenty of reasons to take a contrarian” — and more positive view on commodities.

Oil Prices Fall on Less Gas Demand, Growing Glut

Posted on 27 August 2015

Oil prices resumed falling after U.S. stockpile data showed a surprise drop in gasoline demand and record supplies of crude oil and petroleum products. The data reaffirmed growing concerns that the global oil market will remain awash in crude through the end of the year.

Why the oil price could be depressed for a generation

Posted on 27 August 2015

The oil price may have fallen to its lowest level since the financial crisis, but Chris Taylor believes it will get cheaper. The oil price has been one of the major casualties of the downturn in global markets over the last few weeks, tumbling to levels not seen since the depths of the financial crisis.

OPEC Unable to Control Oil Production in Member States

Posted on 27 August 2015

The Organization of the Petroleum Exporting Countries (OPEC) is irrelevant because it can’t control oil production volumes within it’s own member-countries, the president of PKVerleger LLC, an US energy consulting firm, told Sputnik. “OPEC is irrelevant today. Producing countries set their levels of production… Prices will probably fluctuate between 30 and 50 [dollars per barrel]. OPEC has no power,” Dr. Philip K. Verleger said.

Ecuador Reveals Pain Inside OPEC: It’s Pumping Oil at a Loss

Posted on 27 August 2015

Ecuador has revealed the financial stress inside OPEC created by low oil prices, becoming the first member of the group to say it’s pumping at a loss. President Rafael Correa said on Tuesday that the South American nation is receiving as little as $30 a barrel for its crude, while production costs average about $39.

Difference in London Gold Price AM and spot gold rate costs ‘unhedged’ bullion dealers

Posted on 27 August 2015

For over a century, gold rates have been set twice daily — at 10:30 am and 3 pm — in London on the basis of which the metal is valued and traded throughout the world. On Tuesday, after the customary morning rate was set eyebrows were raised among a few bullion dealers at home and reportedly by some abroad.

Why gold was the best buy in 2008-9 crash and will be this time too

Posted on 27 August 2015

What was the best asset class to buy for the recovery that followed the 2008-9 crash in global financial markets? Step forward gold whose rise was only exceeded by silver. Precious metals not only delivered the fastest recovery from that huge sell-off but offered increases way above the pre-crash levels.

Gold Gets Ignored Amid Market Turmoil as Focus Stays on Fed

Posted on 27 August 2015

This week’s turmoil across global markets did little to bring people back to gold as investors ignored the metal’s haven appeal and focused, instead, on the prospect of higher U.S. interest rates.

Be Cautious With Commodity Exchange-Traded Products

Posted on 27 August 2015

Academic research suggests that commodities can play a role in a balanced asset allocation. A track record of providing uncorrelated returns has won the commodities Morningstar Category a place in many portfolios as an attractive diversifier in a mix of stocks, bonds, and cash.

Look Under the Hood When Investing in Commodity ETFs

Posted on 27 August 2015

Exchange traded funds allow investors to diversify a traditional stock and bond portfolio with commodities. However, the commodities asset class comes with its own risks. “As with everything, investors should be aware of what they are actually buying when they go shopping for a commodity-focused exchange-traded product,” writes John Gabriel, a strategist for Morningstar‘s manager research team.

The One-Man, $1.2 Billion ETF Shop

Posted on 27 August 2015

Starting an exchange-traded mutual fund is a little like launching a rocket. There are lots of different contractors and regulations. There are plenty of crashes. Andrew Chanin, the 30-year-old founder of New York–based PureFunds, watched two of his first three ETFs fail before reaching Earth orbit.

Currency storms create investment opportunities

Posted on 27 August 2015

The currency storm that has engulfed the emerging world has blown into other markets around the globe. It has put pressure on valuations, produced patches of illiquidity and, in some cases, is starting to spill over into the economic and policy spheres.

Currency volatility upsets Asian growth plans

Posted on 27 August 2015

Faced with falling exports and deflation risks, it suited much of Asia to let their currencies drift lower, until China’s abrupt devaluation triggered a tide of volatility that is upsetting not just their currency management but also their growth strategies. China’s 2 percent devaluation on Aug. 11 added to evidence that its economy was struggling, and overseas it caused a ripple of panic that a currency war was in the offing.

How China’s Currency Policies Will Change the World

Posted on 27 August 2015

The recent fluctuations in China’s currency typify the best and worst of a globalized world, where developments in one place can instantly change the political and financial calculations of governments in others. For most of human history, the communities, cultures and economies of the world existed independently of one another, separated as they were by vast distances and difficult terrain.

Carbon-trading Scheme results in release of Tons of greenhouse gases, harms Climate: Study

Posted on 27 August 2015

A carbon-trading scheme, backed by the United Nations, was planned to curb global warming in Europe, but instead of solving the problem, it has been found to be releasing over half a billion additional tons of greenhouse gases, a new report found. The report released by the Stockholm Environment Institute (SEI) discovered a number of problems of carbon offsets. According to the report, it found problems out of 872 million offsets, 75% have issues. Researcher found that lack of oversight has been found the main issue.

Carbon credit fraud no laughing matter

Posted on 27 August 2015

Regardless of which party wins the Oct. 19 federal election, Canadians can look forward to being ripped off for billions of dollars in the international carbon trading market. Carbon trading is intrinsic to both NDP Leader Tom Mulcair’s and Liberal Leader Justin Trudeau’s carbon pricing plans, since both would use cap-and-trade schemes, supposedly to reduce Canada’s industrial greenhouse gas (GHG) emissions.

China Remains a Key Commodities Player, Despite Waning Appetites

Posted on 26 August 2015

The fear that China’s appetite for commodities, from copper to coal, is falling after a decade of breakneck growth has sent prices tumbling, but the country’s sheer scale in these markets means that China will continue to shape them in the long term, even if at a slower speed.

Commodity rout unlike 2008 recession, no China to the rescue

Posted on 26 August 2015

With the prices of many major commodities currently plumbing depths last seen six years ago, what are the chances of a repeat of the China-led boom that lifted resources out of the 2008 recession funk? To answer the question it’s worth looking at what is the same and what is different about the weakness in commodity prices between 2008-09 and now, and the answer is not much is the same.

Commodities: The Chinese curse

Posted on 26 August 2015

An ancient Chinese curse translates as “May you live in interesting times”. We are doing that, thanks to the bursting of the Chinese stock market bubble. The collapse of Chinese equity markets has triggered big selloffs in other markets and underlined the weakness in demand for a range of basic commodities.

Buy low, sell high…but stay away from commodities

Posted on 26 August 2015

The global stock rout may have claimed some victims this week, with heavy selling sending the S&P 500 into correction territory, but equity markets can still offer returns for investors. The definition of “correction territory” is when you see a downward move from a recent high of 10 percent or more.

The 21 commodities that say China isn’t the problem: Russell

Posted on 26 August 2015

One of the reasons advanced for the plunge in commodity prices is concern over the outlook for Chinese demand for raw materials as growth slows in the world’s second-largest economy. But these are fears not necessarily in evidence, as can be seen by trawling through the detailed customs data for July.

Commodities Rebound From 16-Year Low as Oil, Metals Lead Gains

Posted on 26 August 2015

Flush from a collapse in everything from oil to aluminum to cotton, commodity bears are taking a break. A measure of returns from 22 raw materials advanced on Tuesday, recovering from the lowest level since 1999 on concern a slowing Chinese economy will exacerbate supply gluts. Shares in miners and explorers outside China including Glencore Plc, Fortescue Metals Group Ltd. and Antofagasta Plc recouped some losses after a selloff that wiped $2.7 trillion from global equity markets.

Natural Gas Rises as Commodities Rebound From Global Selloff

Posted on 26 August 2015

Natural gas futures gained for the first time in three days, rebounding from an 11-week low Monday amid a global rout in commodities, as hotter weather may spur demand from power plants. Temperatures in New York may reach 89 degrees Fahrenheit (32 degrees Celsius) on Aug. 29, 8 above normal, according to AccuWeather Inc.

Oil price dips below $43 – how low can it go?

Posted on 26 August 2015

An acceleration in the recent fall in oil prices has continued, as the international benchmark dropped by more than seven per cent to settle close to $42 a barrel on Monday after a rout on global equity and commodity markets. Brent was recovering slightly on Tuesday morning and stood at $43.42 a barrel, but this still remains well below the $45 nadir it had reached in January.

Why the oil price could be depressed for a generation

Posted on 26 August 2015

Shale oil is undergoing an unheralded productivity boom – the scale of which has not been seen since the early days of IT – that will depress oil prices for a generation. That is the stark view of Neptune head of research Chris Taylor, which has led his firm to minimise exposure to the oil majors across its fund range.

Lessons from the oil market’s “lost decade”: Kemp

Posted on 26 August 2015

Saudi Arabia and its OPEC allies are counting on strong growth in demand coupled with slower growth in non-OPEC supply to rebalance the oil market in 2016. But the experience of the “lost decade” after prices slumped in 1986 suggests rebalancing could take longer than some OPEC members and market analysts expect.

Will the oil price crash spur a Saudi/Opec rethink?

Posted on 26 August 2015

The slide in crude oil prices to the lowest levels since early 2009 is truly alarming for all oil producers but a boost for major consumers, including the world’s shipowners. However, if turmoil in financial markets leads to a global economic slowdown then lower prices will be a mixed blessing.

Iran says Will Reclaim Full Oil Market Share

Posted on 26 August 2015

Iran will ramp up crude oil production and reclaim its lost share of exports shortly after international sanctions on the OPEC member are lifted, Iran’s oil minister Bijan Zanganeh said on Tuesday. Iran and six world powers agreed a deal in July to curb Tehran’s nuclear program, but sanctions imposed in 2012 will not be lifted until Iran has complied with all the terms of the pact.

Gold price steady around $1,150/oz, dollar recovers

Posted on 26 August 2015

Gold traded sideways on Tuesday morning after European stocks opened higher and the dollar recovered slightly despite Chinese equities extending losses. The spot gold price was last at $1,150.90/1,151.20 per ounce, little changed from the previous close. Trade has ranged narrowly from $1,146 to $1,156.90 so far.

Gold Outlook – Not a Safe Haven Anymore?

Posted on 26 August 2015

Gold rallied from the July lows of $1077 to test the $1167 level. Gold is believed to be a safe haven where investors put their money during periods of economic uncertainty. During the last economic recession, gold price rallied to over $1920. Unfortunately, this level has been the highest price since 2011.

Wary investors seek other havens over gold amid China market rout

Posted on 26 August 2015

Gold has failed to rally in the face of China’s stock market crisis as investors, scorched by a brutal end to the market’s 12-year bull run, chose cash and bonds for safety over bullion while they seek clarity on the timing of a U.S. rate increase. While at first glance, the failure of a “haven” asset to respond may seem odd, this behaviour is by no means unusual.

Market Rout Hasn’t Done Much for Gold

Posted on 26 August 2015

The rout in global equity markets has only managed to underpin gold, as resistance at $1,170 to $1,172 has kept a lid on the market. Even news that Belarus has added to reserves has done little to encourage fresh length as this is just the fourth day of a short-covering rally.

Are Silver Prices About to Hit $64?

Posted on 26 August 2015

We have said many times that the outlook for silver is bright. The grey metal, unlike gold, is not only an investment vehicle, but also an industrial metal that has growing demand from electronics manufacturers and solar panel producers. This time, let’s look at one of the most important ratios in precious metals—the gold to silver price ratio.

Palladium slide exaggerated, short-covering and bargain hunting likely

Posted on 26 August 2015

Palladium’s recent price fall is exaggerated and there is now room for short-covering and bargain hunting, market participants said. The metal fell to a low of $530 this morning – its cheapest since September 2010 – and was last at $550/555 per ounce, down $16 on Monday’s close.

Copper: Why Price Of The Metal Could Affect You

Posted on 26 August 2015

Why Should I Care About Copper? It is used in everything from cars to electricity transmission, so its price performance is considered an accurate reflection of the health of the global economy. Hasn’t Copper’s Price Been Falling Like Everything Else? Yes. Lower demand from China, the world’s biggest consumer of base metals, has meant prices have fallen to their lowest levels since 2009.

EU Probing ‘Anticompetitive Behavior in Precious Metals Spot Trading’

Posted on 26 August 2015

The European Union’s competition watchdog is investigating alleged “anticompetitive behavior in precious metals spot trading,” a spokesman said. The spokesman for the European Commission, Ricardo Cardoso, declined to give more details on the probe.

Outlook for base metal prices continues to grow cloudier: BMO

Posted on 26 August 2015

Despite the second biggest price decline in the past 35 years, the outlook for base metals doesn’t look good, says a new report from BMO Capital Markets. “Although prices have tanked, we expect that markets will remain lacklustre or even test lower levels by the end of 2016, given strong headwinds blowing from multiple directions,” BMO said.

Forget Dollar, Look at These European Currency ETFs

Posted on 26 August 2015

Surprising many investors, the global currency market underwent a trend reversal lately. A dovish Fed, which is still in two minds about raising the key interest rates next month, and extreme tantrums from the Chinese market stoked global growth worries all over again.

Commodity Traders Feel Unusual Pain of a Market Rout

Posted on 26 August 2015

For years, the secretive club of the world’s largest commodities traders thrived on volatility and sometimes tiny price differences in the raw materials they trade—styling themselves as nimble middlemen able to profit whether markets were rising or falling.

Oil price drop leads to renewed speculation on Saudi riyal

Posted on 26 August 2015

Plummeting oil prices have led to renewed speculation against the Saudi riyal, heaping pressure on Riyadh as it burns through its foreign reserves and taps domestic debt markets to make up for a widening budget deficit.

Currency war in China or market forces at work?

Posted on 26 August 2015

We read many articles last week speculating as to the cause behind the Chinese government’s decision to devalue their currency, the renminbi or yuan. Almost everything that we have read revolves around some form of conspiracy theory, subtly implying that the Chinese government is setting forth its dastardly plan to wage a currency war against the rest of the world.

Investors Bet That Currency Pegs Will Come Under Strain

Posted on 26 August 2015

With global markets thrown into a twist, some investors are betting that long-standing currency pegs might come under strain. Traders and investors said a buildup in bets against currency pegs in Hong Kong and Saudi Arabia accelerated after China’s central bank devalued its currency this month.

Carbon trading fails to reduce emissions, harms climate, study says

Posted on 26 August 2015

A United Nations-backed carbon-trading scheme in Europe, originally meant to combat global warming, has instead resulted in the release of more than half a billion additional tons of greenhouse gases, according to a new report. The Stockholm Environment Institute (SEI) report released Monday found significant problems with the efficacy of carbon offsets.

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