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VRS - who has written 36545 posts on Opalesque Commodities Briefing.


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Gold loses shine as Chinese curb jewellery purchases

Posted on 15 August 2014

India regained its position as the world’s leading gold buyer in the second quarter as Chinese demand for jewellery, gold coins and bars dropped sharply from record levels amid a government crackdown on corruption. Soaring purchases by retail customers in 2013 helped China overtake India as the world largest gold consumer for the first time.

Concerns Remain Ahead of New Silver Benchmark Debut

Posted on 15 August 2014

With the unveiling of London’s shiny, new silver benchmark Friday, metal producers and traders are hoping to head off lingering concerns about the credibility of the market. But as the price-setting process undergoes the first major overhaul in more than a century, there are signs the revamped process isn’t quite ready.

Here’s What the New Silver Price Fix Means for Prices

Posted on 15 August 2014

The much-maligned London silver price fix ended (Thursday) after 117 years, and market observers are hoping the new pricing mechanism will herald an era of true and transparent silver price discovery.

Platinum looking at a bright future?

Posted on 15 August 2014

Northam Platinum Ltd. plans to position itself as one of the world’s largest producers as it forecasts an increase in prices of the metal by 2018. Northam, owner of the deepest platinum mine, targets production of more than 1 million ounces of platinum-group metals by 2020 through acquisitions and expansion, the Johannesburg-based company said in a statement today. It sold 396,417 ounces in the year through June.

US sheet prices remain high, but spot market tenuous

Posted on 15 August 2014

US sheet producers are enjoying relatively high, stable pricing compared with the rest of the world, but their position is far from guaranteed, market sources said Thursday.

Mining For Gold With ETFs

Posted on 15 August 2014

Since January, precious metal mining stocks have seen prices soar. Exchange traded funds (ETFs) provide the best way for investors to profit from the new bull market. Reasons to be bullish include: undervaluation, future currency instability, and geopolitical unrest.

China’s fourth gold ETF raises about $50 mln

Posted on 15 August 2014

Bosera Funds has raised $50 million for China’s fourth gold backed exchange-traded fund that it aims to launch soon, at a time when investment demand for the precious metal has been sluggish in the world’s biggest bullion consumer.

Boost Your Portfolio Yield With Alternative Income ETFs

Posted on 15 August 2014

The majority of ETF income investors focus their portfolios on dividend-paying stocks and bonds to generate yield. However, those traditional asset classes have now risen to the point where their income streams have fallen significantly.

Free exchange: Aid to the rescue

Posted on 15 August 2014

Fifty years ago the first United Nations Conference on Trade and Development launched a debate about how much money rich countries should give to poor ones to reduce poverty and bolster growth. In the end, the UN settled on a figure of 0.7% of national income—a target subsequently reaffirmed by endless international powwows.

Economist: SNP’s currency union plan will fail

Posted on 15 August 2014

Alex Salmond’s Plan A for a currency union is doomed to failure and will bust up within a year costing the Scottish economy £100 billion, one of the world’s leading economists has claimed. Unemployment and a seven year slump would be the inevitable result of Mr Salmond’s plans for a formal currency union with the rest of the UK.

Virtual Currency: Not Just A Phase

Posted on 15 August 2014

Virtual currencies are definitely trending. You know that’s true when even the politicians are jumping on the bandwagon. It won’t be long until Ed and Dave are asking if they can pay for their Cornish pasties with Bitcoins.

Carbon Emissions Trading System Likely Launched Next Year

Posted on 15 August 2014

The Korea Exchange’s emissions trading system development has come to a halt, due to strong opposition from the business and industrial community. The government is planning to deal with it by reexamining the implementation date and raising the emissions cap.

Sovereign rights still shackle EU carbon charges

Posted on 15 August 2014

More than a year after the EU was forced to rein in its scheme for charging airlines for emissions, some foreign carriers are still balking at paying. The EU’s unilateral push in 2012 to charge airlines for carbon emissions set off a diplomatic row with China, India and others and eventually Brussels backed down, confining its scheme to flights within the EU. Most airlines — those responsible for 98 per cent of the regulated emissions — paid up by a May 2013 deadline to submit a carbon permit for every [...]

Climate change: Concerns of developing nations come to the forefront

Posted on 15 August 2014

The 18th Ministerial meeting of the BASIC countries– Brazil, South Africa, India and China– has just concluded in New Delhi. It was attended by the environment ministers of the four countries, ahead of the forthcoming UN Climate Summit meeting on 23rd of September. It will be hosted by the UN Secretary General Ban ki moon in New York and will seek to create a political momentum for the climate negotiation talks to be held in Lima, Peru in December.

Commodity Price Volatility: What Should Distributors Do?

Posted on 14 August 2014

Dealers in commodities, or in parts that use a significant amount of a commodity with large price fluctuations, have significant business challenges. In previous articles I’ve written about the nature and impacts of commodity price volatility: This article will cover the two challenges of dealers: pricing and working capital.

Iran: $100 Desirable Price for Crude Oil

Posted on 14 August 2014

Iranian Oil Minister Bijan Namdar Zanganeh expressed satisfaction with the current global price for crude oil. “I have never favored an oil price below $100 (for a barrel) and now we have the best price for crude oil and all sides are satisfied with that price,” Namdar Zanganeh told reporters on Tuesday.

World Awash in Oil Shields Markets From 2008 Price Shock

Posted on 14 August 2014

Fighting across Iraq, Libya, Ukraine and Gaza, and an accelerating economy, should mean higher oil prices. Yet crude is falling. Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear program and the world economy had just seen the strongest period of sustained growth since the 1970s.

Petrol prices expected to fall after Saudis open the oil taps

Posted on 14 August 2014

Petrol prices are poised to fall further after the cost of a barrel of crude oil reached its lowest level this year. The fall followed the publication of an influential report that showed a glut of crude from Saudi Arabia flowing on to the market and rising stockpiles.

Oil Price is in ‘Sweet Spot’

Posted on 14 August 2014

Oil prices have remained stable despite political unrest in the Middle East, and fund manager Nordea predicts this high-price, low-volatility environment to continue.

EU regulators say Germany, others in breach of energy law

Posted on 14 August 2014

EU regulators have begun legal proceedings against 24 member states, including Germany, for failing to enforce a law on energy efficiency, the European Commission said on Wednesday.

Citi: Cost Cuts Help Gold Names Now, But Trouble Looms

Posted on 14 August 2014

Citigroup’s Johann Steyn and Craig Irwin have a note out today, adjusting their gold outlook to reflect industry trends, but they remain bearish on the sector overall. They note that global gold on mine unit costs fell 5% year-over year, while notional cash expenditure fell 24% and all-in costs dropped 23% in the March 2014 quarter.

Gold going to $5,000 per ounce: Mining executive

Posted on 14 August 2014

While the exchange-traded fund covering gold miners is outperforming the precious metal itself, McEwen Mining founder and chief owner Robert McEwen said Wednesday that he remains bullish on gold.

What’s Been Supporting Gold Prices?

Posted on 14 August 2014

Most explanations for these results point to the various geopolitical risks that have generated jitters across a number of markets. However, there is another explanation. Expectations that monetary policy will remain loose across major economies longer than originally anticipated have been driving gold higher. Here are some key indicators supporting this thesis:

Gold and Silver Miners that Can Make Money Now

Posted on 14 August 2014

As much as we’d all like significantly higher silver and gold prices, Chris Thompson of Raymond James doesn’t expect them. The good news, he argues, is that the relative stability now characterizing the market permits investors to make informed decisions about which companies can build value and demonstrate cash flows at today’s prices.

Confused by the new London silver fix? You should be!

Posted on 14 August 2014

The silver market has cause for concern… This Friday sees Thomson Reuters and CME roll-out of their new fixing engine and market participants are understandably clueless about how it works less than three days before it goes live. With the traditional fixing members have stepping away, it remains a mystery who will be taking the fix orders - with a deafening silence from market participants.

Miners Have Already Rallied: Will Metals Follow?

Posted on 14 August 2014

When one looks at gold and silver prices and their moves yesterday, it might seem that nothing happened in the precious metals market. That’s far from the truth because the real action took place in mining stocks. Several weeks ago, it was miners’ strength that heralded the rally in the whole sector. Will we see one also this time?

Copper slumps on Chinese demand concern

Posted on 14 August 2014

Copper has sunk to its lowest level since June after weak economic data fuelled concerns about the prospects for demand in China, the world’s biggest consumer of the metal. Copper, used in electronics and construction, traded as low as $6,873 a tonne for delivery in three months on the London Metal Exchange on Wednesday after figures showed the amount of money flowing into China’s economy slowed sharply in July.

U.S. Mining Winning The Costs Race

Posted on 14 August 2014

Mining booms are nearly always driven by rising commodity prices but what’s happening in the U.S. today indicates that falling costs are the driving force behind a revitalized interest in all forms of resources, from oil and gas to gold.

Mining M&A activity subdued despite strong deal pipeline

Posted on 14 August 2014

Multinational professional services group, Ernst & Young, which nowadays likes to be known as EY, has just produced its latest quarterly Mergers and Acquisitions analysis for the mining sector. This shows that there were around 112 deals in the sector during Q2 this year totaling US$9.5b. Deal volume was down 21% on the previous quarter and down 41% on the same quarter in 2013.

U.S. Is Home to Most ETFs In The World

Posted on 14 August 2014

Exchange traded funds have seen some explosive growth over the past decade. A strong stock market in the U.S and overseas and low expense ratios have propelled investor demand for the investment vehicles.

Polar Star to launch two new balanced commodity hedge funds this month

Posted on 14 August 2014

A South African commodity hedge fund shop located in Cape Town is launching two new funds following the success of its existing crops. The history of the firm started with the Polar Star Fund (ZAR), which was launched in October 2008 within BlueAlpha Investment Management. In January 2010, Murray Derksen and Casper Groenewald joined BlueAlpha as the new managers on this fund. They launched the Polar Star Fund Limited (USD) in July 2010 and were later joined by their former colleagues from Rand Merchant Bank, Johann Theron in February 2013 [...]

Currency still the big independence issue

Posted on 14 August 2014

Alex Salmond’s performance against Alistair Darling in the recent STV debate is casting a long shadow over political discourse in the run-up to next month’s referendum. The First Minister’s handling of the currency issue and his failure to give in to demands to outline his Plan B is beginning to colour every aspect of the independence issue.

Struggling Ukrainian Currency Left With ‘No Anchor’ Amid Insurgency

Posted on 14 August 2014

Ukraine’s currency is sinking as the country’s economy wilts under the weight of the pro-Russian insurgency in its east. There’s little to suggest that’s going to change any time soon.

Rouble leads emerging currency weakness

Posted on 14 August 2014

The rouble fell half a percent on Tuesday, leading broad-based losses on most emerging currencies on fears that Russia’s decision to send humanitarian aid to eastern Ukraine could eventually lead to a military invasion.

How to Stop Tax Inversions With a Carbon Levy. Seriously

Posted on 14 August 2014

President Obama and legislators are embroiled in a debate over whether and how to punish companies that seek U.S. tax relief by buying a smaller foreign company and legally reincorporating in its country. So-called tax inversions are at a record high, and Obama has suggested it’s not a victimless activity.

Pricing carbon

Posted on 14 August 2014

In a recent report, Charles Frank of the Brookings Institute discussed the pro and cons of a US carbon tax versus cap-and-trade. Frank claimed in the report that a carbon tax is clearly easier to administer because with cap-and-trade there is an additional administrative requirement – the allocation of allowances.

Calling all nervous investors! The case for commodities

Posted on 13 August 2014

As geopolitical risk and fears of stock market falls continue to loom large, some investors believe now may be the time to back commodities – despite the woeful returns from the asset class over recent years. Commodities have performed poorly since 2010, with the Bloomberg/UBS Commodity index falling 30% over that period. And while the index rose 7.1% in the first half of 2014, its best start to a year since 2008, a difficult July saw many of those gains evaporate.

July Sees Consolidation in Commodity Markets

Posted on 13 August 2014

Commodities declined in July as fundamental risks subsided, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was negative for the month, with 17 out of 22 Index constituents trading lower. Energy was the worst performing sector, down 7.80%. Despite concern that geopolitical risks and events in the Middle East could lead to strength in crude oil, we have largely seen the opposite as many of these fears have yet to result in actual material reductions in production.

Laif Meidell: Multiple currents at play in commodities

Posted on 13 August 2014

Many times, we see that the top-performing commodities on our list will tend to follow a similar theme, such as agricultural commodities, precious metals or energy. Typically driven by similar macro-economic forces, similar commodity types quite often behave like “birds of a feather.” However, this week is a little different, with the top three commodities coming from three distinctly different commodity types.

U.S. Cuts 2014 Oil Price Forecast as Production Surges

Posted on 13 August 2014

The Energy Information Administration decreased its 2014 price forecast for West Texas Intermediate crudes after the U.S. reached its highest monthly production in 27 years.

IEA raises call on OPEC crude oil for rest of 2014, 2015

Posted on 13 August 2014

The International Energy Agency said Tuesday it sees a need for more OPEC crude on the global market for the remainder of 2014 and in 2015 than it previously forecast despite global demand growth being curtailed.

IEA says sanctions have low impact on Russian oil

Posted on 13 August 2014

US and EU sanctions on Russia’s oil sector are unlikely to have a major effect on production, the International Energy Agency said on Tuesday, chiming with comments from some market watchers that the restrictions are toothless.

Here’s Why Geopolitical Chaos Hasn’t Caused Oil Prices To Spike

Posted on 13 August 2014

Oil markets have been startingly calm in recent months despite unrest in some of the world’s largest oil producing regions. The price of London-traded Brent crude oil is actually down $5 since mid-May.

Why is the gold price immune to global strife?

Posted on 13 August 2014

Gold has been trapped in a narrow range over $1,300 per ounce, struggling to extend its rally, even as a whole raft of geopolitical tensions remain unresolved.

Gold Firmer s Geopolitics Keeps Sellers At Bay

Posted on 13 August 2014

Gold prices are modestly higher in subdued early U.S. trading Tuesday. Some safe-haven demand is still present in the market place, evidenced not only by the firmer gold prices but also by a stronger U.S. dollar and higher U.S. Treasury prices. December Comex gold was last up $3.20 at $1,312.50 an ounce. Spot gold was last quoted up $0.80 at $1,311.75. December Comex silver last traded up $0.014 at $20.175 an ounce.

Silver Prices Decoupling From Gold

Posted on 13 August 2014

Gold prices are showing some modest gains on geopolitical concerns, but silver prices are struggling to show similar strength and that may be sign that gold’s strength could be limited.

Aluminium in Gulf to reach $55bn by 2020

Posted on 13 August 2014

Gulf region’s investments in the aluminium sector are forecast to reach $55 billion by 2020, compared to $30 billion in 2011, thanks to smelters’ expansion and new projects in the region, according to organisers of Aluminium Middle East exhibition.

Aluminum Bulls Increase Wagers as Funds’ Favorite Is Zinc

Posted on 13 August 2014

Hedge funds and other speculators increased their bullish bets on aluminum with prices climbing to a 17-month high today amid forecasts for a shortage.

Metals advance: Is China healthy?

Posted on 13 August 2014

Zinc and nickel paced gains by industrial metals in London amid signs demand is improving in China, the biggest consumer. Aluminum rose to the highest since February 2013. Industrial production in China maintained its pace of growth last month, economists surveyed by Bloomberg said before data due tomorrow.

Overview of the Steel & Iron Ore Market in Q3 2014

Posted on 13 August 2014

The commissioning of new iron ore capacity combined with a dearth of disruptions to supply have boosted availability of cheap iron ore, which has weighed on prices. In most regions, steel prices have remained low because raw material prices have fallen and competition between steelmakers remains active.

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