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VRS - who has written 41692 posts on Opalesque Commodities Briefing.


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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.

How To Measure Costs When Comparing ETFs

Posted on 24 July 2015

Managing ETF-based portfolios, ETF selection is a key focus. With so many ETF choices now available – and often many selections for a single asset class – having a process to select which ETF to utilize is important.

Canada’s Currency Crisis

Posted on 24 July 2015

On July 14, Canada’s central bank cut benchmark interest rates by 25bps for the second time this year, and slashed its growth forecast for 2015. The bank now expects GDP growth to be 1.1% Y/Y this year, down from its 1.9% forecast in April.

Venezuela’s currency is tanking so fast ‘everything is an obstacle’ for mothers

Posted on 24 July 2015

Currency controls and flailing local production have fueled worsening scarcities that are now a blight of daily life for many Venezuelans — especially those expecting a child.

Bill Shorten recommits to emissions trading, opposing ‘Abbott’s society of flat-earthers’

Posted on 24 July 2015

Bill Shorten was due to recommit to an emissions trading scheme in his first speech to Labor’s national conference as party leader, vowing not to succumb to “ridiculous scare campaigns” by Tony Abbott’s “society of flat earthers”. The Labor leader intended to stare down the prime minister’s warnings about a return to the Gillard government’s carbon tax by declaring emphatically that “an ETS is not a tax” and Australia must not be a laggard on climate policy.

Another grim year for commodities as global supplies rise: World Bank

Posted on 23 July 2015

The outlook for commodities remains grim for this year, except that oil will fall a bit less than previously forecast, the World Bank said. Average prices for fuels such as crude, natural gas and coal will tumble 39 per cent from 2014, while those for materials like metals and fertilisers will fall about 12 per cent, the Washington-based lender said in its quarterly “Commodity Markets Outlook” released Wednesday.

All commodity price indices to decline in 2015 – World Bank

Posted on 23 July 2015

A new World Bank report forecasts that all main commodity price indices will decline in 2015, owing to “abundant supplies and, in the case of industrial commodities, weak demand”. The July Commodity Markets Outlook is particularly pessimistic on the outlook for metals prices, which are now projected to decline 17%, instead of the 12% forecast in April; a result of capacity increases and slowing Chinese demand.

Commodities plunge to 13 year-low dragged down by mining shares

Posted on 23 July 2015

Commodity prices continue to plunge, as falling mining shares dragged a commodity index down to its lowest point since 2002. Bloomberg’s commodity price index, tracking gold, crude oil and other raw materials, has plunged by 40 per cent since 2011. Today the index fell to 95.5 points, its lowest point in 13 years.

Why the commodities crush is very good for stocks

Posted on 23 July 2015

With gold, crude oil and other commodities falling, several S&P sectors have taken a big hit. But as the popular CRB commodity index drops to new four-month lows, traders say this is actually a good sign for the S&P 500.

An investor’s guide to navigating a commodities roller coaster

Posted on 23 July 2015

It has been a rough ride for commodities traders so far this year. Prices for many commodities are suffering from sizable losses, but there are ways to help make the road smoother.

Banks see second quarter revenue dip from commodities

Posted on 23 July 2015

Pinning down the financial performance of energy commodity trading at top financial institutions is complicated by the manner in which banks segment their operations and lump together certain revenue numbers. While differences exist from bank to bank, for the most part the big banks place commodity trading within their fixed-income unit of their investment bank division.

World Bank raises oil forecast—but don’t get too hopeful

Posted on 23 July 2015

The World Bank has upped its oil price forecast for 2015, but the marginal rebound in the price of Brent crude at the start of the year won’t pull energy prices up to anywhere near 2014 levels, the international body said on Wednesday.

World Bank projects crude oil to average $57/b in 2015, $61/b in 2016

Posted on 23 July 2015

The World Bank on Wednesday revised upward its 2015 crude oil price forecast to $57/barrel from $53/b in April, with demand higher than expected in the second quarter, particularly in the US. However, large inventories and rising output from OPEC “suggest prices will likely remain weak in the medium-term,” John Baffes, the World Bank’s senior economist, said in a statement.

U.S. Winning Oil War Against Saudi Arabia

Posted on 23 July 2015

Last year the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, initiated an economic oil war against the United States when it refused to cut production in November of 2014 like it usually does when oil prices drop. This was an attempt to drive some U.S. shale oil producers bankrupt and stem the flow of North American shale oil onto the global market.

Credit Suisse Says It May Finally Be Time to Buy Oil and Gas Stocks

Posted on 23 July 2015

Even as energy prices fall again,one firm says it might be time to finally buy oil and gas stocks. Stocks of U.S. oil and gas companies have been so battered as commodity prices have fallen that it looks like there is finally an “attractive entry point,” Credit Suisse analysts said in a research note.

Gold isn’t even close to being the biggest loser among commodities

Posted on 23 July 2015

Gold’s collapse to five-year lows is dominating headlines, but it has been a rough year so far for commodities in general. Expectations the Federal Reserve will move later this year to raise rates, potentially leading to more strength for the U.S. dollar, gets much of the blame.

Gold price in worst losing streak since 1996

Posted on 23 July 2015

On Wednesday, gold dropped to the lowest level since March 2010 as negative sentiment overwhelms the sector and analysts predict a return to triple digits for the metal. Futures contracts in New York with August delivery dates were priced as low as $1,087.10 an ounce down more than $15 or over 1% from yesterday’s close.

Gold price: six reasons it slumped – and why it could stay low

Posted on 23 July 2015

The gold price mounted a modest recovery yesterday following a sharp fall on Monday, but after closing below $1,100 for the first time in five years it is still hovering around this key threshold. Analsts once predicted that gold prices would surge to $5,000 an ounce, but now many are saying that the precious metal could fall back through the $1,000 mark before the end of the year – and a slump into three figures could well trigger more falls.

If it doesn’t glitter, it is gold! Time to look at other assets?

Posted on 23 July 2015

Gold has been consistently falling and was trading around its five-year low on Wednesday, reflecting sustained pressure on the metal. Experts feel that investors who are looking to get back into the yellow metal should wait for some more time as there is more downside left.

Is gold’s 50% bull market fall the launchpad for $8,800 an ounce?

Posted on 23 July 2015

Will the author of ‘Hot Commodities’ and the man who spotted the boom in the sector before anybody else, Jim Rogers now start buying gold? He said earlier this year that he would when the bull market showed a 50 per cent retracement. That is to say the gold price had fallen to halfway between the $287 an ounce it was in 2000 to the $1,923 it reached in 2011.

Silver Price Forecast: Here’s Why Silver Prices Could Hit $30

Posted on 23 July 2015

Yes, silver prices have been plunging since 2011. But know this: demand for silver is booming while supply is shrinking. The grey metal is due for a big squeeze. The nice thing about the grey metal is that, unlike gold, a substantial amount of demand comes from industries.

Palladium under siege but strong fundamentals may end carnage

Posted on 23 July 2015

Palladium investors are keeping record bets on a further slump in the market as broad-based weakness plagues the precious metals complex, but some analysts say the metal’s slide to 3 1/2-year lows is overwrought and a supply deficit will help the metal reclaim lost territory.

Copper’s slump hints at extended weakness for commodities

Posted on 23 July 2015

A measure of demand for copper, the metal used in everything from power lines to electronics, is at the weakest in more than two years, signalling the meltdown that’s sweeping through commodity markets could get even worse.

There’s now more money in ETFs than hedge funds

Posted on 23 July 2015

Investors have put more money into exchange-traded funds than hedge funds for the first time, according to research firm ETFGI. There was $2.971 trillion invested in the 5,823 exchange-traded products listed globally at the end of the second quarter, ETFGI said in a news release Tuesday.

ETF explosion as assets overtake hedge funds

Posted on 23 July 2015

The global Exchange Traded Fund (ETF) industry has overtaken hedge funds, as investors have been lured by the products ultra-low costs and large range of indices.

Dollar Edges Higher on Rate Hopes

Posted on 23 July 2015

The dollar firmed against a basket of currencies as investors continued to bet the U.S. currency will appreciate further once the Federal Reserve raises borrowing costs. On Wednesday, The Wall Street Journal Dollar Index, which compares the dollar with a basket of 16 widely traded currencies, rose 0.2% to 88.34, roughly 1.1% away from the 12-year high it reached on March 13.

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