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Precious metals or mining stocks? – Rick Rule

Posted on 17 September 2013 by VRS  |  Email |Print

Late summer saw, to the relief of some investors, some price improvements in precious metals and precious metals stocks. We asked Sprott USA Holdings Chairman Rick Rule if he thought this might indicate that we’ve seen the bottom in this sector.
“There’s a key element still missing from the picture,” Rick stated in a recent update to investors. “In past bear markets in natural resources, we witnessed a wave of capitulation selling that marked the end of the bear market. That capitulation allowed the next bull market phase to begin. And we haven’t seen that kind of capitulation occur in this market.”……………………………………….Full Article: Source

Heavy selling of gold stocks may point to further declines for bullion

Posted on 11 September 2013 by VRS  |  Email |Print

The gold price fell more than $20 to a near one-month low of $1,362 on Tuesday after a possible deal averting US airstrikes on Syria emerged and news that Indian gold imports fell by 70% in August hurt sentiment.
The gold price seemed to have turned a corner in August fighting back from near 3-year lows of $1,200 hit at the end of June, but it failed to decisively clear the $1,400 level and the rally has been steadily losing steam this month………………………………………..Full Article: Source

Commodity stocks may rebound, but not for the reason you think

Posted on 26 July 2013 by VRS  |  Email |Print

Global natural-resource stocks have sunk to the bottom of the barrel in an otherwise bullish first half of the year for equity markets. The Morgan Stanley Commodity Related Equity Index dropped 3.7 percent in the six months ended June, compared with a gain of 13.8 percent for the benchmark S&P 500 Index.
And that wasn’t just a recent phenomenon: As shown in the chart below, commodity stocks have trailed the S&P 500 for over two years — and by a whopping 36.5 percent………………………………………..Full Article: Source

Hedging stocks with commodities seen as flawed

Posted on 26 July 2013 by VRS  |  Email |Print

Commodities track stocks too closely to make them suitable for equity investors seeking to minimize risk, according to Marco J. Lombardi, an economist at the Bank for International Settlements.
“The common lore that commodities should serve as a hedge does not seem to be solidly grounded,” Lombardi and Francesco Ravazzolo, an economist at the Norwegian central bank, wrote in a paper two weeks ago. The research was published by the BIS, which keeps records for the world’s central banks………………………………………..Full Article: Source

Commodity slump hits mining IPOs in Hong Kong

Posted on 24 July 2013 by VRS  |  Email |Print

Hong Kong became the go-to listing destination for resources companies in recent years, but a slide in commodity prices and China’s economic slowdown mean the city faces challenges in attracting further listings by foreign companies.
Commodity prices started rising more than a decade ago, and the sector became the darling of investors. In a bid to attract non-Chinese miners, which have typically listed in London or Toronto, the Hong Kong stock exchange eased its listing requirements for the sector three years ago………………………………………..Full Article: Source

Oppenheimer says it is time to buy out-of-favor commodity stocks

Posted on 23 July 2013 by VRS  |  Email |Print

For investors with the view that we have seen the worst of the correction in commodity stocks for 2013, or will soon shortly, the research team at Oppenheimer believes increased exposure to the commodity-sensitive sectors of energy and materials is the way to go.
They also hold a further bias toward materials, given its leverage to any signs of recovery in global growth and its recent historical tendency to lead over the ensuing three- and six-month periods following a corrective trough in equities………………………………………..Full Article: Source

Gold mining stocks take a beating as price tumbles

Posted on 18 July 2013 by VRS  |  Email |Print

Think gold has been a bad investment this year? Try gold miners. The FTSE Gold Mines index of gold equities has tumbled 46 per cent since the start of the year. Some shares have fallen even more: London-listed African Barrick Gold is down 76 per cent.
“The sentiment is terrible – worse even than the sentiment towards gold,” says Patrick Chidley, analyst at HSBC………………………………………..Full Article: Source

Time to move on from commodities to global stock picking

Posted on 24 June 2013 by VRS  |  Email |Print

Morgan Stanley this week joined a growing list of big investment banks beating a partial retreat from commodities trading. Like Barclays, UBS and Deutsche Bank, it is struggling to make sense of a business where revenues have tumbled since the heyday of the natural resources boom immediately prior to the financial crisis. So is the commodities super-cycle over?
For three reasons, I think the remarkable rally in the prices of energy and metals (although maybe not food which marches to a different beat) may have ground to a halt. If so, this might have big implications for investors………………………………………..Full Article: Source

Goldman sees bull run over as returns trail stocks: Commodities

Posted on 07 June 2013 by VRS  |  Email |Print

Commodities are trailing equities for the longest stretch in almost 15 years as Goldman Sachs Group Inc. and Citigroup Inc. predict the end of the decade-long bull market even as the global economy expands.
The Standard & Poor’s GSCI Spot Index of 24 commodities lagged behind the MSCI All-Country World Index for six months, the longest stretch since 1998. Hedge funds cut combined bullish bets across 18 U.S. raw-material futures by 51 percent from a 16-month high in September and are bearish on six of them. Commodities will return 1.6 percent in a year as losses in agriculture and precious metals diminish gains from energy and industrial metals, Goldman said last month……………………………………Full Article: Source

City AM cuts commodities for equities

Posted on 04 June 2013 by VRS  |  Email |Print

City Asset Management has removed commodity exposure from its model portfolios in favour of international equities and alternative strategies. The group said it had removed its 4 per cent commodity exposure in its unitised model portfolios in April and put the proceeds towards increasing international equities from 12 per cent to 14 per cent, and alternative strategies from 15.5 per cent to 17 per cent.
James Calder, research director at City Asset Management, said he had decided to increase merger arbitrage strategies because they appeared “particularly attractive given the prospect of increased corporate deal activity resulting from the cash-rich nature of many businesses”………………………………………..Full Article: Source

Goldman says commodities, stocks diverge as stockpiles increase

Posted on 16 May 2013 by VRS  |  Email |Print

Goldman Sachs Group Inc. said that returns from commodities have diverged from developed equity markets amid expectations for rising metal stockpiles and energy supplies, maintaining its neutral outlook on raw materials.
Commodity returns as gauged by the Standard & Poor’s GSCI Enhanced index will be 1.6 percent over 12 months, analysts led by Jeffrey Currie wrote in a report dated yesterday. That compares with an earlier estimate for a 2.5 percent return, according to an April 23 report. Goldman is most bearish on agriculture, forecasting a 13 percent loss over 12 months…………………………………….Full Article: Source

That equities/commodities disconnect

Posted on 15 May 2013 by VRS  |  Email |Print

Stocks are up because of rampant QE, which is squeezing investor flows out of bond markets and into equities. And the reason we’ve got rampant QE is the continued lack of near-term economic recovery globally, which is manifestly bad for industrial commodities.
Julian Jessop at Capital Economics notes that industrial metals are particularly sensitive to Chinese growth prospects and it seems noteworthy that Shanghai is one stock market that is not rising at present………………………………………..Full Article: Source

Magic trees: The performance of equities Vs. commodities

Posted on 08 May 2013 by VRS  |  Email |Print

Imagine an island on which magic trees grow. These trees, as it turns out, are exactly like the trees everywhere else, except for three things. First, these trees never die. Second, the trees always grow to exactly 100 feet tall eventually.
And third, to pass time on this boring island, the villagers place bets on which specific trees in a given acre of land (on which all trees were planted at the same time) will grow the fastest over the next 10 years………………………………………..Full Article: Source

Cooling hot commodities may be trouble for stocks

Posted on 22 April 2013 by VRS  |  Email |Print

Fed Chief Ben Bernanke must be pleased as punch that this is likely to be his last spring at the helm of the Federal Reserve. That’s because for five years now, an auspicious start to the new year has turned ugly by the time the cherry blossoms bloom along DC’s Tidal Basin.
Don’t be fooled by the headline-grabbing rally in stocks. Although the Dow and S&P 500 have been on a well-publicized tear, more disquieting signals are being flashed in the commodities markets around the globe — with everything from gold to silver to oil down more than double digits in percentage terms so far this year………………………………………..Full Article: Source

Are commodities warning stocks?

Posted on 18 April 2013 by VRS  |  Email |Print

Copper is just one of the commodities that has shown major weakness this week, and today it fell to the lowest level since October 2011.
Some worry that this could be bad news for the stock market. After all, the metal is sometimes called “Dr.Copper,” because it is thought to check up on the market’s health. The checkup is not going so well. Do you think copper is delivering a warning about stocks, or should investors not sweat it?………………………………..Full Article: Source

Commodity and Equity returns comparable in the very long run: BofAML

Posted on 03 April 2013 by VRS  |  Email |Print

After poor performance in the last few months, some investors have cut back their exposure to commodities and boosted positions in equities. While there are cyclical reasons to support this asset allocation decision, BofAML’s most recent work suggests commodity and equity returns are comparable in the very long run.
The S&P GSCI TR index only has history going back to 1970, while DJ UBS and MLCX TR indices merely date back to 1990. The Bank built a commodity index going back to 1930 and calculated average returns of 8% with a standard deviation of 11% in the 1930-2013 period, compared to 11% returns and 16% deviation for equities (S&P 500 TR)………………………………………..Full Article: Source

5 commodity stocks moving on news

Posted on 26 March 2013 by VRS  |  Email |Print

We are looking at a risk-on trade begin to take place as news that Cyprus has reached a deal with the EU on a 10 billion Euro bailout. Russia has been left out as they were unable to reach a deal of their own for a bailout and one has to question their actions as of late.
We have seen some reports that they wanted to get assets for pennies on the dollar, and will look to do that should Cyprus have problems in the future, but if Europe is going to be on the hook for this now, they might as well throw more money at the problem in the future. This further cements Cyprus as an EU member and solidifies the Union………………………………………..Full Article: Source

Why gold shares haven’t lost their shine

Posted on 25 March 2013 by VRS  |  Email |Print

Despite a small uptick last week due to Cyprus jitters, the price of gold has been heading south in fits and starts since hitting a record near $1,900 (U.S.) an ounce back in September, 2011. Gold-mining shares have been just about the worst investment on the stock market, with the TSX global gold index losing about a third of its value over the past two years.
Being a gold bug has clearly become a painful investment thesis and investors are responding accordingly by yanking money from the sector………………………………………..Full Article: Source

Commodity catch-up with stocks seen as elusive

Posted on 22 March 2013 by VRS  |  Email |Print

Stocks and commodities are more likely to go separate ways than to move together, according to Binky Chadha, Deutsche Bank AG’s chief global strategist.
As the CHART OF THE DAY illustrates, the Standard & Poor’s/GSCI Index of commodity prices was little changed from the end of 2011 through yesterday. During the same period, the S&P 500 climbed as much as 24 percent and approached a record set in October 2007………………………………………..Full Article: Source

Gold “facing competition from stock market” for investment dollars

Posted on 15 March 2013 by VRS  |  Email |Print

Gold dropped below $1,580 per ounce Thursday morning, while gold in Sterling and Euros fell back below £1,060 and €1,225 an ounce respectively, extending losses from a day earlier that following stronger-than-expected US retail sales data.
Like gold, silver drifted lower this morning, dipping below $28.60 an ounce, while other commodities were broadly flat and European stock markets ticked higher. U.S., U.K. and German government bond prices fell, while the U.S. Dollar Index, which measures the Dollar’s strength against a basket of other currencies, rose to its highest level since August………………………………….Full Article: Source

Think gold slump is bad? Bullion stocks fared way worse

Posted on 14 March 2013 by VRS  |  Email |Print

While the “great rotation” into riskier assets has triggered a 4.3 percent fall in the price of gold since the start of the year, this is just a fraction of the losses seen in the shares of gold miners, which have fallen 15 percent on average over the same period.
Worries over the outlook for the precious metal and declining profitability of the miners have led to a continued selloff in their shares, which have struggled to find favor with investors over the past year. As a result, gold miners are now trading at their cheapest level in 25 years relative to the physical metal, according to Point View Wealth Management…………………………………….Full Article: Source

Look at commodities, not equities, for new trades

Posted on 13 March 2013 by VRS  |  Email |Print

With a market as sticky as this one is, it is very difficult to short anything. It’s also very difficult to buy any more equities when they are up so much in such a short period. So if you have cash lying around, what do you do?
You can sit on it and wait, which isn’t a bad idea but you can also look elsewhere. You can find other non-equity instruments to purchase where the probability of success is high and the reward-to-risk favorable………………………………………..Full Article: Source

Agriculture plays: ETFs vs. stocks

Posted on 06 March 2013 by VRS  |  Email |Print

The value effect has been a very potent source of alpha in the past. I advocate investing in stocks based on value over trying to divine the price movements of commodities. Investors seeking alpha in the agricultural sector are better served by trying to find cheap stocks to buy instead of trying to guess the price movements in futures markets.
This perspective is also based on the observation that commodity markets are tough to predict. A price performance comparison between popular funds, such as the iPath Pure Beta Agriculture ETN (DIRT) and the iPath DJ-UBS Agriculture TR Sub-Idx ETN (JJA), versus corn futures has shown that a long corn position outperformed almost all commodity and commodity-related investment products in 2012………………………………………..Full Article: Source

Can gold stocks regain their luster?

Posted on 05 March 2013 by VRS  |  Email |Print

Gold stocks fell to a three-and-a-half year low on Monday, as investors continue to reduce their exposure to bullion and other commodities on weakening economic data from China.
With stocks rising, the dollar strengthening, and U.S. Treasury bond yields holding below 2 percent, investment demand for gold continues to decline. According to BlackRock, gold exchange-traded product outflows have now reached $5.6 billion year-to-date………………………………………..Full Article: Source

Opportunities in agricultural equities remain - Barings

Posted on 15 February 2013 by VRS  |  Email |Print

Prices in food commodities such as corn, wheat and soybeans rose sharply in 2012 due to extreme weather events, Baring Asset Management said. The investment firm believes that these high prices will remain for the next six months, which will also enhance the investment appeal of companies providing goods and services to farmers.
Companies providing for instance seeds, herbicides and fertilisers to farmers, enabling them to maximise their crop output, are expected to outperform this year………………………………………..Full Article: Source

The divergence between equities and commodity prices

Posted on 12 February 2013 by VRS  |  Email |Print

If the global economy recovers, commodity prices will head north. If it doesn’t, equities will head south. Commodity prices and equities have seen more or less co-ordinated moves in the last five years. In recent months, however, that relation has broken down. Both the MSCI World index and the MSCI Asia-Pacific ex-Japan index have moved sharply higher, while commodity prices, as shown by the Reuters CRB index, have remained almost stagnant.
What could be behind this? Could it be worries about China? But Chinese equities too have moved up in the last six months and the fundamentals are looking up, with the HSBC China PMI data showing output increasing for the past five months………………………………………..Full Article: Source

Stock markets throw a party; Commodities aren’t invited

Posted on 04 February 2013 by VRS  |  Email |Print

The world is happier and no longer hitting the hard stuff. That is one way of reading a big divergence between two major asset classes: stocks and commodities. The MSCI World index has rallied 13% since its mid-November low point. Hard assets have trailed in its wake: The Thomson Reuters/Jefferies CRB commodities index is up just 3.9%.
Correlation between the two has been falling. One reason is that fear has eased. Assets tend to march in extreme unison when investors think the world is going to hell. The past couple of months saw a reasonable amount of good news on the economy, including the avoidance of the U.S. “fiscal cliff.” That has fueled rallies in most major stock markets. …………………………………….Full Article: Source

How to pick the best gold bullion mining stock?

Posted on 30 January 2013 by VRS  |  Email |Print

Many investors in gold bullion have become increasingly worried due to the lack of price appreciation lately. Even though there has been an aggressive monetary policy initiative by the Federal Reserve, gold bullion and mining stocks in the sector have declined.
Obviously, no one can predict the future; it’s impossible to know for sure where gold bullion, or mining stocks in general, will be in the future………………………………………..Full Article: Source

ETF Securities lists 28 currency-hedged commodity ETPs on SIX Swiss Exchange

Posted on 24 January 2013 by VRS  |  Email |Print

After making its debut on the SIX Swiss Exchange four months ago, ETF Securities has followed up with the launch of 28 Swiss franc currency-hedged exchange-traded commodities (ETCs) based on Dow Jones-UBS Commodity Indices.
ETF Securities’ initial offering on the exchange in September last year included eight thematic exchange-traded funds delivering access to various investment themes such as agribusiness, coal mining and shipping………………………………………..Full Article: Source

These 5 commodity stocks could drop significantly in 2013

Posted on 08 January 2013 by VRS  |  Email |Print

In Mathematics, there is a method when you have to exclude and discard first all the wrong solutions before ending up with the correct solution to a problem. In Investing, the equivalent method is when an investor stays far from specific companies which have increased odds to impact negatively the yield of his portfolio.
As a New Year starts, we all place our bets for a high yielding portfolio rejecting the potential laggards and loading the potential winners. After checking my database of 2000 companies, I decided to write an article about the companies that I will not put into my shopping list for 2013 providing also the rationale behind my decision………………………………………..Full Article: Source

Equities beating bonds, commodities,gold in 2013 like 2012

Posted on 07 January 2013 by VRS  |  Email |Print

U.S. common stocks convincingly outperformed Treasury bonds by 14 percentage points in 2012, and are still advancing on balance as the yield on the 10 year Treasury has risen to 1.92%.
Be advised that the best performing group in the U.S. last year the real estate investment trusts that gained over 20% while the broad market indexes were a tad below 20%. Only Chinese equities– in a slump since 2007, acted better, coming from a lower base, after the U.S. REIT performance………………………………………..Full Article: Source

Top 10 miners: A tough year, for CEOs and for stock prices

Posted on 10 December 2012 by VRS  |  Email |Print

For listed mining companies everywhere, this year has been all about stock prices facing headwinds, along with relentless pressure on CEOs. The benchmark stock, BHP Billiton, the world’s biggest diversified resources group, saw its stock price in US dollar terms peak out in the latter stages of 2010.
Given the wobbles in the global economy, the fall from there has been relatively modest, from around US$26.00 a share to recent trades around US$19.00. Vale, the world’s No 2 miner by market value, has seen its stock price fall by just over 50%, to current levels around US$17.00 a share………………………………………..Full Article: Source

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10 commodity stocks yielding up to 10pct

Posted on 06 December 2012 by VRS  |  Email |Print

Investors have been wisely diversifying their portfolios to provide exposure to more than just U.S. stocks. Whether it’s emerging markets, real estate or gold bullion, a broad-based approach provides for a better night’s sleep.
Yet it’s fair to ask: Do commodities also have a place in your portfolio? After all, they seem to rise and fall with alacrity, and investors often only notice them after they’ve made sharp gains or plunges. Truth is, we have no crystal ball that tells us how this group will fare in 2013. We can look at the supply and demand backdrop for various commodities, but much hinges on the health of global economies………………………………………..Full Article: Source

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Gold bullion ETFs, closed-end funds, or gold mining stocks - which is the best investment?

Posted on 07 November 2012 by VRS  |  Email |Print

Many investors hold at least some gold in their portfolios as a form of insurance for market, currency, liquidity, or other form of financial collapse. Gold is a currency substitute, and has a constrained supply (the only increase is through mining new gold).
Primitive societies, thousands of years ago, recognized this as an intrinsic store of value, and this has not changed. The value of gold should increase during times of uncertainty, so a long position should provide a hedge for a financial or political crisis………………………………………..Full Article: Source

Qatar weighs stake in Morgan Stanley commodities unit

Posted on 16 October 2012 by VRS  |  Email |Print

Qatar, the Persian Gulf country seeking to reduce its dependence on gas reserves, is weighing a potential stake in Morgan Stanley (MS)’s commodities unit, Prime Minister Sheikh Hamad bin Jassim Al Thani said.
“We need a few weeks to look at the details, but we are looking at it seriously,” he told reporters today in Doha in response to a question about Qatar’s interest………………………………………..Full Article: Source

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Coal could be making a comeback

Posted on 09 October 2012 by VRS  |  Email |Print

Coal stocks could be making a comeback as it begins to look more attractive to utilities, Sterne Agee analyst Michael Dudas said Monday on CNBC. “I think you’re seeing a lot of utilities switch back right now,” he said on “Fast Money.”
“I do think you’re seeing some more coal dispatches relative to gas, and that should be helpful for demand and pricing going forward.”……………………………………….Full Article: Source

Fund managers dump bullion for gold shares

Posted on 03 October 2012 by VRS  |  Email |Print

Professional investors who want exposure to gold are starting to put their money in gold-related shares rather than the metal itself. Gold shares are being snapped up by fund managers in place of bullion, as the derating that has occurred over the past three years looks to right itself.
Alastair Mundy who runs the Investec Cautious Managed fund and Jon Rebak who runs HSBC Open Global Distribution have increased their exposure to gold shares and reduced exposure to gold bullion. Troy Trojan multi-asset manager Sebastian Lyon has gold shares and gold bullion dominating his top holdings………………………………………..Full Article: Source

5 best-performing commodities, YTD

Posted on 03 October 2012 by VRS  |  Email |Print

Through the end of September, 2012 has by and large been another solid year for commodities. Measuring commodity performance can be a little tricky though, as many commodity ETFs and ETNs hold various contracts throughout the year and roll those contracts according to their investment mandate. What that means is that ETF/ETN performance can vary from the underlying commodities.
While many regular investors do find that commodity futures offer certain advantages as investment options, a large number look to get their exposure through ETFs and ETNs, and it is the performance of these vehicles that we will use as proxies for this article………………………………………..Full Article: Source

Is it finally time for gold stocks to outperform bullion?

Posted on 26 September 2012 by VRS  |  Email |Print

David Einhorn’s Greenlight Capital Inc. suffered in the past year by favoring gold-mining stocks over the precious metal, a strategy that Scotia Capital Inc. recommended last week.
As the below illustrates, two exchange-traded funds that Greenlight was buying in the third quarter of last year have declined since Sept. 30, 2011. Gold has risen about 9 percent during the same period in New York trading. Einhorn declined to comment on the performance………………………………………..Full Article: Source

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Caution: High correlation between commodities and equities

Posted on 25 September 2012 by VRS  |  Email |Print

One of the biggest draws to commodity investing has long been its low correlation to equities. Investors would add commodity exposure to their portfolios to help diversify returns, as the movement in commodity markets had long been independent from that of equities. But 2012 is doing its best to redefine the rules, as it seems that commodities have begun to show an increased correlation to major equity benchmarks.
“The S&P GSCI composite index of commodity sector returns only added 0.52% so far this year, compared to 11.99% for the S&P 500. During the same period, the weekly correlation between the S&P 500 and the S&P GSCI has been about 0.49, compared to an average of about 0.15 between January 1976 and December 2011,″ wrote Thao Hua last month………………………………………..Full Article: Source

Deutsche Börse lists new commodity ETFs

Posted on 17 August 2012 by VRS  |  Email |Print

Xetra, the cash exchange operated by Deutsche Börse, today launched four new commodity index exchange traded funds, as the exchange taps growing demand among investors for products that give exposure to the commodity markets.
The four new products, issued by ETF giant iShares, track the S&P GSCI index family, allowing investors to gain access to the three broad commodities groups – agriculture, energy and industrial metals markets – as well as as to a broader commodity basket. The funds are based on futures contracts which track the indices………………………………………..Full Article: Source

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Why are gold and silver shares not moving higher?

Posted on 16 August 2012 by VRS  |  Email |Print

This is perhaps one of the most asked questions among gold investors today. But the answer is not a simple one. It goes to the basics of which people invest in gold in the first place and what form of gold they buy. In this, the first of a two part article, we delve deeper into this subject.
It’s so easy to become short-sighted in the different facets of the gold market. In the U.S., it’s easy to believe that gold price rises seen since 2005 are due to either the economic outlook of the U.S. or the strength and weakness of the USD. There’s no doubt that in the short-term, gold price movements are driven by traders focused on the exchange rate between the dollar and the euro. But what gold are they buying?……………………………………….Full Article: Source

Brazil unit of Dreyfus commodity giant delays IPO

Posted on 20 July 2012 by VRS  |  Email |Print

The Brazilian sugar, ethanol and bioenergy unit of Louis Dreyfus Commodities said Thursday it was delaying the trading debut of its shares on the Sao Paulo stock exchange, citing market uncertainty.
A company statement said the decision was made after a Wednesday meeting in Sao Paulo of the board of directors of Biosev, which until June was known as LDC-Sev. “The uncertainty on the financial market are the reasons for delaying the trading debut in the new market,” the subsidiary of the French agribusiness giant said………………………………………..Full Article: Source

Is the gold equity-bullion relationship improving?

Posted on 26 June 2012 by VRS  |  Email |Print

According to Investec Securities, while it may be too early to suggest the bullion-equities relationship has been restored, recent movements do bode well for gold stocks in the second half of the year.
Equities are bought for two reasons, capital appreciation and/ or dividends. But, in traditional investing theory, equities are risky, or at least more so than cash and bonds………………………………………..Full Article: Source

Bear market in commodities a risk for equities

Posted on 25 June 2012 by VRS  |  Email |Print

Commodities are now in a bear market – and they could have further to fall. Economic data last week from around the world have dampened the demand outlook for basic resources.
China’s export order sentiment is at its lowest point since the start of 2009, business activity in the eurozone has shrunk for five consecutive months and US manufacturing is growing at its slowest rate in 11 months………………………………………..Full Article: Source

5 commodity stocks to buy now

Posted on 05 June 2012 by VRS  |  Email |Print

Fears of a global economic slowdown have sent investors running for cover. They’ve been selling stocks with any cyclical exposure, especially the companies that sell commodities.
Yet it’s important to understand the trading trends for these commodity stocks. They typically move in and out of favor quickly, and now that they are deeply out of favor, they offer real value for longer-term investors………………………………………..Full Article: Source

Real gold price holds the cards for gold bullion and gold stocks

Posted on 23 May 2012 by VRS  |  Email |Print

We often write about the real price of gold (RPG) as it is a leading macro indicator and leading indicator for gold stock fundamentals. The RPG is simply a measurement of Gold in terms of various markets such as commodities, stocks or currencies.
If the RPG is broadly outperforming then it could be signaling credit stress and even an economic contraction. If equities and commodities are outperforming Gold then it signals an improving economic environment and an improving credit environment………………………………………..Full Article: Source

Plunging commodity prices are ominous for stock market

Posted on 14 May 2012 by VRS  |  Email |Print

Consumers understandably like to see prices for commodities decline, the more the merrier, particularly gasoline and energy costs. Many analysts also take commodity price declines as a positive for the economy, on the theory that consumers will have more spending money in their pockets, and manufacturers will have lower costs, so hopefully greater earnings.
Investors tend to also take declining commodity prices as a positive for the stock market on the same reasoning………………………………………..Full Article: Source

Gold stocks will continue to underperform gold bullion

Posted on 03 May 2012 by VRS  |  Email |Print

Volatile equity markers, environmental regulations and rising costs for miners create head winds that physical gold doesn’t encounter. One of the big debates of 2011 was whether the performance discrepancy between physical gold prices and gold equities was going to diverge back to normal.
As you may recall, gold equities grossly underperformed gold bullion throughout 2011. For most of the year, gold prices traded anywhere between 15 to 40 percent higher than their equity counterparts………………………………………..Full Article: Source

Gold stocks: Where is the bottom?

Posted on 27 April 2012 by VRS  |  Email |Print

Gold and silver mining stocks have sold off by roughly 30% from their 52-week highs based on the PHLX Gold/Silver Sector Index (XAU) and by roughly 32% based on the Amex Gold Bugs Index (HUI). In comparison, gold is down approximately 14% from its nominal all time high in 2011 while silver is down approximately 37%.
The XAU / Gold ratio suggests that gold and silver miners are oversold. In fact, the shares of some companies are trading below their net asset values………………………………………..Full Article: Source

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