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VRS - who has written 39433 posts on Opalesque Commodities Briefing.


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Oil-Drop Pain Spreads to Saudi Arabia’s Energy Behemoth

Posted on 20 February 2015

Saudi Arabia’s refusal late last year to rein in oil production helped trigger the price crash that has hurt oil-producing countries and publicly listed energy companies alike. And now even the kingdom’s own oil company is feeling the pain.

India’s gold imports set to rise as RBI eases curbs ahead of budget

Posted on 20 February 2015

Gold imports to top consumer India are set to jump in coming months after the Reserve Bank of India (RBI) eased gold import curbs, ahead of an expected cut in import duty in next week’s budget.

Gold – Forming a base as selling abates

Posted on 20 February 2015

Gold remained under pressure in the final quarter of 2014 on dollar strength and growing demand for higher-yielding risk assets. Technical selling was also a feature after gold breached double bottom chart support around $1,180. The price weakness stimulated physical demand as gold entered its seasonal peak demand period.

Intercontinental Exchange to launch new LBMA Gold Price in March

Posted on 20 February 2015

Intercontinental Exchange, the network of exchanges and clearing houses, has announced that ICE Benchmark Administration (IBA) expects to launch the new LBMA Gold Price, which replaces the long established London Gold Fix, on 20 March 2015.

Silver Prices Preparing For A Strong Rally

Posted on 20 February 2015

In September, we alerted readers to watch Gold and Silver prices for a development that could signal a market low. We believe that low arrived on November 30, and prices are now tracing an upward pattern that should continue until the middle of 2015 or beyond. For several reasons, we expect the current price area to serve as a base for both precious metals to rally. This article presents our forecast for silver prices, which we believe will test targets in the 20’s in coming months.

Copper Is Shining Bright After Dull Start to the Year

Posted on 20 February 2015

Copper prices rose to a one-month high on Wednesday, as the possibility of a deal between Greece and its European creditors sparked optimism in metals markets. Copper for March delivery, the most actively traded contract, closed up 1.3% at $2.6145 a pound on the Comex division of the New York Mercantile Exchange. It was the highest settlement since Jan. 13.

Nickel Falls to 12-Month Low as Greece Impasse Fuels Demand Woes

Posted on 20 February 2015

Nickel prices dropped to a 12-month low on concern that European demand for industrial metals will falter amid signs of snags in Greece’s debt talks. Germany rebuffed Greece’s request for an extension of its aid program as euro-area finance ministers prepare to meet to avert a cash crunch for the region’s most-indebted nation. A gauge of the six main prices on the London Metal Exchange has declined 6.6 percent this year.

Base metals slip on EU wrangling, nickel and zinc price hit fresh lows

Posted on 20 February 2015

Base metals moved to lower prices in Thursday’s LME morning session in thin and volatile conditions in the absence of Asian market participants over Chinese New Year - nickel hit a one-year low and zinc its softest for three weeks.

Oil price above $50: three ETFs to watch

Posted on 20 February 2015

A respite to the oil price decline has long been due as the commodity has been on a wild ride over the past seven months, having depleted about 60% in price. Increased production resulting in ample supplies, strength in the greenback, slower manufacturing activities in Europe which is buckling under deflationary pressure, cooling geo-political tension in the second half of the year, and sluggish Chinese and Japanese economies pushed oil prices down last year.

Another Currency Hedged ETF Swells in Size

Posted on 20 February 2015

Observers looking for growth within the exchange traded funds industry need not look any further than currency hedged ETFs. Currency-hedged ETF assets grew 48 percent in 2014 to roughly $20.8 billion, and have grown 1,519 percent over the past two years, according to Deutsche Bank, Reuters reports. That number has grown in significant fashion in 2014 and the Deutsche X-trackers MSCI EAFE Hedged Equity ETF is a big reason why.

China’s exchange-rate policy: Currency peace

Posted on 20 February 2015

Devaluing the yuan would do China more harm than good. Chinese officials tired of defending their exchange-rate policy can at least appreciate the irony in the latest charges levelled against them. For years foreigners accused them of keeping the yuan artificially weak to boost exports. Now, domestic critics say, they are doing just the opposite: keeping the currency artificially strong and, in the process, wounding the economy.

Did the Fed just enter the currency wars?

Posted on 20 February 2015

The minutes from the Federal Reserve’s meeting last month have foreign-exchange traders wondering whether Janet Yellen has joined the currency wars. Policymakers pointed to the dollar’s rising value as “a persistent source of restraint” on exports in a surprisingly dovish set of minutes published Wednesday. The greenback fell against a broad group of its peers.

Ultimately everyone loses in a currency war

Posted on 20 February 2015

Pity the prudent Canadian saver. As she seeks a safe place to park spare cash and build a nest egg for retirement, the pickings are increasingly slim. At the peak of RRSP season, most banks are offering barely 1.5 per cent on once reliable five-year guaranteed investment certificates.

Big sustainability could mean big business

Posted on 20 February 2015

When it comes to stories about the fate of the earth, headlines are usually dominated by tales of gloom and doom. And there’s certainly a great deal to be depressed about: global temperatures hit their highest levels ever last year, oceans are growing so warm and acidic that fisheries could be lost, and food and water systems are in decline.

The Streets of China Commodity City

Posted on 19 February 2015

Yiwu International Trade City, also known as China Commodity City, claims to be the world’s largest wholesale market for small commodities. It is located in a vast warehouse in the province of Zhejiang, where tens of thousands of stalls sell everything from artificial flowers to inflatable pools.

The oil price: The Saudi project, part two

Posted on 19 February 2015

Stage one of Saudi Arabia’s plan—or perhaps hope—to restructure the oil market is taking longer than expected. By refusing to rein in production while prices fell, the Saudis permitted a big surplus to grow and served notice on higher-cost rivals (Russia, Venezuela, American shale-oil producers) that they would not prop up other people’s profit margins at the expense of their own market share.

Oil tumbles as huge supplies raise doubts about rally

Posted on 19 February 2015

The comeback rally in oil paused on Wednesday, with crude prices falling 5 percent or more after traders and investors were overwhelmed by the latest estimates for U.S. supply builds that came in nearly five times above market expectations.

OPEC is going to make a massive comeback, BP predicts

Posted on 19 February 2015

One of the big stories of the past few years has been the boom in unconventional gas and oil extraction outside the traditional oil-producing countries. The explosion of fracking in the U.S. seemed as if it was dislodging the old oil-producing countries permanently.

Oil price ‘could fall to $10 per barrel’

Posted on 19 February 2015

Oversupply, the failure of Opec and diminishing demand will push oil price down again, Bloomberg says. The plunging global oil price has gone into reverse in the past two weeks, prompting some traders to suggest that the oil market had reached a bottom. But according to new analysis by Bloomberg, oil prices could fall sharply again and could even reach $10 per barrel.

The price of oil is not a reflection of demand and supply

Posted on 19 February 2015

“People today are worried about the plunging price of oil, which however is not a reflection of demand and supply alone”, says Dr. R. Seetharaman, Group CEO, Doha Bank. In the last six months, we have seen oil prices come down by 50 per cent – this does not mean that supply has increased by 50 per cent, or that demand has reduced by 50 per cent.

All Commodities Rise With Rising Oil

Posted on 19 February 2015

What happens to other commodities when oil prices spike? On one hand, if oil rises so much that an economic slowdown overpowers the tax-break effect, then commodities might fall. However, oil is a main input to produce many other commodities, so the prices of goods can rise when oil prices increase.

India: Banks allowed to import gold on consignment basis

Posted on 19 February 2015

The Reserve Bank of India (RBI) on Wednesday said nominated banks were now permitted to import gold on consignment basis. “All sale of gold domestically will, however, be against upfront payments,” said the RBI, adding, “Banks are free to grant gold metal loans.”

Gold Edges Higher After Fed Minutes Reveal Rate Worries

Posted on 19 February 2015

Gold reversed losses Wednesday after minutes from the Federal Reserve’s last meeting showed some central bank officials were worried about raising rates too soon. Gold for April delivery, the most actively traded contract, was recently up 0.2% at $1,211 a troy ounce in electronic trading on the Comex division of the New York Mercantile Exchange. Gold prices ended floor trading down 0.7% at $1,200.20 an ounce, the lowest settlement since Jan. 2.

Gold Price $250 Forecast - Dear Harry Dent: Wanna Bet?

Posted on 19 February 2015

Some of you may be aware that investment guru Harry Dent has publicly stated that gold will fall to $250-$400. He specifically predicted: Around $700/ounce is a certainty in gold by 2015 to 2016, and $250 is a possibility well down the line by 2020–2023.

Gold price starting to look ‘vulnerable’ on seasonality: UBS

Posted on 19 February 2015

The price of gold is starting to look vulnerable as the market heads into the “seasonally weak period” with the Lunar New Year around the corner, UBS said. New Year holidays in China begin Wednesday, and participants will be out through to Tuesday next week.

Bullion Index gains membership of physical-delivery exchange Bullion Capital

Posted on 19 February 2015

Australian physical bullion firm Bullion Index has been granted a membership with compatriot company Bullion Capital, which operates a membership-based global physical bullion exchange. It also enables Bullion Index to offer the proprietary DMA exchange platform, MetalDesk, to its clients. Bullion Index now gives clients the ability to trade Physical Gold, Silver and Platinum via an intuitive trading platform with access to 18 bullion products over 14 global trading hubs.

Indonesia says may delay 2017 ban on copper concentrate exports

Posted on 19 February 2015

Indonesia could push back a ban on exports of copper and other mineral concentrates due to come into effect in January 2017 if miners have not built new domestic smelters in time, a mining ministry official said on Wednesday.

Euro Hedged ETF Tops $10B in Assets

Posted on 19 February 2015

The indomitable rise of the WisdomTree Europe Hedged Equity Fund continues as the exchange traded fund has officially joined the $10 billion in assets under management club. Buoyed by year-to-date inflows of $4.34 billion as of Feb. 17, by far the best inflows of any ETF, HEDJ is a $10.6 billion ETF, underscoring a growth trajectory that has been nothing short of jaw-dropping.

Betting on Oil

Posted on 19 February 2015

For better or for worse, exchange-traded products have made commodities markets more accessible to investors. The collapse in oil prices in the back half of 2014 has prompted some bargain-hunters to take their chances bottom-fishing the volatile commodity. In just the past four months, exchange-traded products offering exposure to energy markets via futures contracts have attracted about $3.5 billion in asset flows.

Oil Price Above $50: 3 ETFs to Watch

Posted on 19 February 2015

A respite to the oil price decline has long been due as the commodity has been on a wild ride over the past seven months, having depleted about 60% in price. Increased production resulting in ample supplies, strength in the greenback, slower manufacturing activities in Europe which is buckling under deflationary pressure, cooling geo-political tension in the second half of the year, and sluggish Chinese and Japanese economies pushed oil prices down last year.

Weighing the advantages of an all-ETF portfolio

Posted on 19 February 2015

There’s a natural progression in the way the public responds to innovation. Something that first seems like a mere novelty becomes an interesting new niche, then a great idea and then, “How did we ever get along without this?”

Futures Exchange-Traded Funds

Posted on 19 February 2015

Investing in commodities has grown more popular in last few years and today they find a place in any well-diversified portfolio. Exchange-traded funds (ETFs) offer multiple benefits like diversification, professional money management of a mutual fund, and real-time trading of a stock listed on an exchange. Commodity ETFs provide an efficient mode of investing and trading commodities and come in three flavors:

China calls the shots in Asia’s currency war

Posted on 19 February 2015

As fears of a global currency war grow, all eyes in Asia are on whether China will devalue its currency to avert a sharper economic slowdown. The urgency with which Asian central banks are cutting interest rates is an indication of not just the deflationary forces they are seeing but also recognition that if China weakens the yuan, their policy options will be severely limited.

Currency Speculators Can’t Force Denmark’s Hand, Callesen Says

Posted on 19 February 2015

The deputy governor of Denmark’s central bank, Per Callesen, said speculators won’t force the country to abandon its peg to the euro. “We do not consider any exit from this path, irrespective of what currency speculators believe,” Callesen said at an event at the London School of Economics on Wednesday. “Speculative attacks have happened, they will go on” in the future, he said.

BP: Carbon price needed to prevent dangerous climate change

Posted on 19 February 2015

BP’s chief executive Bob Dudley has joined calls for a global carbon price to counteract spiralling emissions over the next 20 years, as projected by the oil giant’s latest Energy Outlook report. The Outlook Report predicts that emissions will rise by 1% every year from now until 2035 - far above any ’safe’ emissions targets identified by experts. This adds up to a 25% increase, which is “materially higher” than a scenario whereby global temperature rises are limited to 2C, the company says.

Don’t let UN set our energy policy

Posted on 19 February 2015

Here’s a question for Canadians to consider leading up to October’s federal election. How much economic damage are NDP Leader Tom Mulcair and Liberal Leader Justin Trudeau prepared to inflict on us in order to get a meaningless pat on the head from the United Nations on climate change?

Australia’s tycoons suffer commodities hangover

Posted on 18 February 2015

The commodities slump has dented economies, capital expenditure and profits. Now it is scything the wealth of some of Australia’s most colourful tycoons. Andrew “Twiggy” Forrest, the founder and chairman of Fortescue, has seen the value of his one-third shareholding in the iron ore miner fall to A$2.65bn, down from A$6.2bn a year earlier.

RBA Cut as China Commodity, Local Consumption Doubts Remain

Posted on 18 February 2015

The Reserve Bank of Australia said doubts about a pickup in domestic spending and China’s appetite for raw materials prompted this month’s decision to lower interest rates, and reiterated that the Aussie dollar remains too high.

Commodities explained: Oil data watch

Posted on 18 February 2015

Concerns about a growing oil supply surplus last year prompted Saudi Arabia, the world’s largest exporter, in November to persuade fellow Opec members that cutting production to support oil prices was not in their interest. The Kingdom said a period of lower prices would shave off some US shale production and other high-cost output and protect Saudi Arabia’s (and in theory the cartel’s) market share.

Get ready for $10 oil, says A. Gary Shilling

Posted on 18 February 2015

At about US$50 a barrel, crude oil prices are down by more than half from their June 2014 peak of US$107. They may fall more, perhaps even as low as US$10 to US$20. Here’s why. U.S. economic growth has averaged 2.3% a year since the recovery started in mid-2009. That’s about half the rate you might expect in a rebound from the deepest recession since the 1930s.

What the oil price crash means for investors

Posted on 18 February 2015

Why has the oil price crashed? The oil price has nearly halved over the last eight months. The cost of a barrel of Brent crude, the most common measure of oil, hit $115 last June but stands at just $62 today. Price falls this dramatic are down to one of two things: a drying-up of demand or a glut of supply.

Oil prices to recover partially from record low: IEA

Posted on 18 February 2015

Global oil prices are expected to recover only partially from their current $50-$60 a barrel range, the International Energy Agency (IEA) says in its five-year forecast. The agency said on Tuesday that crude prices will continue to remain well below the level of more than $100, last seen in June 2014.

Oil prices rise to $62, reach close to 2015 high

Posted on 18 February 2015

Oil rose to $62 a barrel on Tuesday, close to its 2015 high, supported by threats to Middle East supplies and expectations lower prices may prompt a slowdown in US output. Egypt on Monday bombed Islamic State targets in Libya, where violence has reined in most oil output, and Iraq’s semi-autonomous Kurdistan Regional Government threatened to withhold oil exports if Baghdad failed to send its share of the budget.

BP’s 2035 outlook sees OPEC oil gaining ground as U.S. shale slows

Posted on 18 February 2015

OPEC will regain ground and exceed its historic record production levels by 2030 as U.S. shale oil growth flattens out in the coming years, energy company BP said on Tuesday. In the near term, demand for oil from the Organization of the Petroleum Exporting Countries (OPEC) is likely to remain under pressure as U.S. shale oil production remains strong, BP said in its annual benchmark Energy Outlook 2035.

Gold demand and supply trend in 2014 stands fundamentally bullish for gold prices

Posted on 18 February 2015

Today we make a short break from the news from the main financial markets in order to analyze the gold demand trends for the full 2014 year, published a few days ago by the World Gold Council. How did the demand for gold behave last year?

Misconceptions About Gold

Posted on 18 February 2015

Few markets are as widely misunderstood and subject to as many misconceptions as the gold market. Many of these misconceptions stem from gold’s dual characteristics as a commodity and money. Is it actually correct to claim that “gold is money”? After all, it is not used as official money anywhere and barring isolated instances of payments made from digital gold accounts, it is unlikely that one will ever make payments in gold these days.

Gold price 2015 rally evaporating

Posted on 18 February 2015

Negative sentiment swamped the gold market on Tuesday as traders bet on a positive outcome for Greek debt negotiations and the breach of key technical levels put further pressure on the metal. In heavy post-holiday volumes on the Comex division of the New York Mercantile Exchange, gold futures for April delivery – the most active contract – plunged to $1,202.71 an ounce in mid-morning trade, down $24 or 2% from Monday’s close.

Gold price starting to look ‘vulnerable’ on seasonality: UBS

Posted on 18 February 2015

The price of gold is starting to look vulnerable as the market heads into the “seasonally weak period” with the Lunar New Year around the corner, UBS said Tuesday. New Year holidays in China begin Wednesday, and participants will be out through to Tuesday next week.

Copper Futures Decline Most in a Week on Chinese Housing Data

Posted on 18 February 2015

Copper futures fell the most in a week after a report showed declining property prices in China, the world’s largest metal user. New-home prices fell in 64 out of 70 cities in January, Chinese government data showed on Tuesday. That signaled an interest-rate cut in November, the first since 2012, hasn’t revived construction yet. Property accounts for about half of China’s copper demand, according to Goldman Sachs Group Inc.

Paulson holds gold ETF in Q4 but cuts back on some miners

Posted on 18 February 2015

Hedge fund Paulson & Co kept its stake in the gold-backed exchange-traded fund SPDR Gold Trust unchanged for a fifth straight quarter in the three months ending Dec. 31, a filing with the U.S. Securities and Exchange Commission showed on Tuesday.

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