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Commodities Briefing - Category | Investment more

Gold not getting boost from investors seeking safe haven from Greek crisis

Posted on 03 July 2015 by VRS  |  Email |Print

The precious metal stays in trading range as Greece lives on the edge of default due to tepid inflation, muted demand for gold from China and a strong U.S. dollar. Despite some early noise to the contrary, Greece’s financial woes are having almost no impact on gold prices, so far.
It’s not that the threat of the first country in the developed world to default is not a big deal, it’s just that investors have been well warned, and there are a lot of other forces currently holding down the price of gold………………………………………..Full Article: Source

Finding Investment Opportunities in Emerging Markets

Posted on 03 July 2015 by VRS  |  Email |Print

Within emerging markets the Asian region provided the main winners in 2014 thanks to the sharp decline in the oil price. But what can investors expect from 2015? Emerging market investors had a difficult time in 2014, with returns lagging developed markets. Over the year as a whole the MSCI AC World Index showed a total return of 8.6% in sterling terms against a meagre 1.4% return for the MSCI Emerging Markets Index.
Within emerging markets the Asian region provided the main winners, with the sharp decline in the oil price seen in the latter part of the year being beneficial for the majority of countries in the region as they are net oil importers………………………………………..Full Article: Source

Iran eyes $100bn of western investment in oil industry

Posted on 02 July 2015 by VRS  |  Email |Print

Iran is finalising a contract system to secure about $100bn of new oil and gas deals with western companies if sanctions are lifted. The move marks a big shift for a regime traditionally wary of of foreign groups participating in its energy sector.
Mehdi Hosseini, an adviser to Iran’s oil ministry who has been drafting a new energy contract for the past two years, said he expected President Hassan Rouhani to approve it in the coming months………………………………………..Full Article: Source

World’s best gold forecaster is solidly bearish on bullion

Posted on 02 July 2015 by VRS  |  Email |Print

There will be no relief any time soon from gold’s worst losing streak in almost two decades, according to the most accurate forecaster for precious metals. After sliding about 1 per cent since December, prices will drop an additional 10 per cent by the end of 2015, reaching $1,050 (U.S.) an ounce – a five-year low – predicts Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore.
Gan topped 19 of his peers from banks including Standard Chartered PLC and ABN Amro Bank NV to become the most accurate analyst over the past two years, Bloomberg Rankings show. Gold has fallen for four straight quarters, the longest stretch since 1997. It has been more than two years of disappointment for bulls who had been piling into exchange-traded products (ETPs) backed by the metal, accumulating a record hoard by the end of 2012. Since then, more than $81.8-billion has been wiped from the value of the ETPs backed by bullion………………………………………..Full Article: Source

The 5 Best Stocks to Invest in Commodities

Posted on 02 July 2015 by VRS  |  Email |Print

Commodities aren’t for the faint of heart, which is why it’s best to just stick with the best stocks in each commodity basket. Commodities have been giving investors fits for years. All four commodities have taken investors on triple-digit price rides with rapid ascends and devastating falls. It’s that allure of a rapid rise that continues to draw investors in with hopes of making a mint on higher prices.
However, given that prices can change on a dime, it’s a warning to investors to stick with the companies that can survive the deepest of drops because as history shows those drops are sudden. With that, here are the five companies built to last, making them the best stocks to invest in commodities………………………………………..Full Article: Source

Is there a huge investing opportunity in the oil markets?

Posted on 01 July 2015 by VRS  |  Email |Print

A rare occurrence now happening on oil markets might be a huge opportunity for investors who play it right, says Tim Pickering, president and chief investment officer at Auspice Capital Advisors Ltd.
Pickering said Canadian crude prices are currently in “backwardation,” which means the future price is expected to be lower than the spot price, but every other crude oil market in the world is in contango, meaning the future price is expected to be higher than the spot. “For long-term investors in oil, this is a positive thing because it means they will not lose money as the market rolls over time,” he said in a commentary to clients………………………………………..Full Article: Source

With Greek Uncertainty, Investors Seek Safety in Gold and Bitcoin

Posted on 01 July 2015 by VRS  |  Email |Print

As Greece descends into financial crisis, its citizens and investors globally are turning to hedges old and new. European demand for the age-old safe haven of gold coins has risen in recent weeks, as has the relatively new concept of investments in digital bitcoins, market participants say.
As the situation in Europe grows more precarious, the price of both have risen in recent weeks as concerns have grown about the threat to banks in Greece and the risk that turmoil could spread to other countries in the eurozone and elsewhere………………………………………..Full Article: Source

25 Lessons on Commodity Investing

Posted on 26 June 2015 by VRS  |  Email |Print

Commodities can be very powerful investments but they also come with their fair share of risk. In recent years, investors and advisors have begun to adopt commodities into portfolios, as many have seen the benefits of adding these low-correlated assets to a group of holdings.
The launch of a robust lineup of exchange-traded products that utilize both physical commodities and commodity futures contracts has brought commodities to the masses; they’re no longer reserved for the largest and most sophisticated investors………………………………………..Full Article: Source

Oil investors betting on crude hitting $82 per barrel

Posted on 23 June 2015 by VRS  |  Email |Print

European hedge fund believes market for crude is oversold as demand picks up. Investors are beginning to bet on a sharp rebound in the oil price by the end of the year, on the back of rising demand and a slowdown in US production.
Insch Capital Management, a Swiss hedge fund, is predicting that prices will be trading at about $82 per barrel by the beginning of next year, and already claims the market is oversold. The Lugano-based fund says it plans to ramp up investments in the sector in preparation for an expected 50pc uptick in the price of crude by 2016………………………………………..Full Article: Source

Will Chinese Investors Rotate to Gold?

Posted on 23 June 2015 by VRS  |  Email |Print

Gold traders are the most bullish in a month on the prospect of slower U.S. interest rate increases. Gold saw a second weekly advance after efforts to secure a Greek bailout faltered and the Federal Reserve signaled a more dovish stance on interest rate increases. Shanghai Gold Exchange withdrawal volume in the week to June 12 came in at a strong 46.2 metric tonnes.
The Bank of China will become the first Chinese bank to join the auction process that sets gold prices in the London market. The bank, along with seven other lenders, will start participating in the twice-daily electronic auction. The addition of a Chinese bank is another sign that China is increasing its influence in gold and currency markets worldwide………………………………………..Full Article: Source

Speculators Retreat From Oil as OPEC Oversupply Crowds Out Shale

Posted on 22 June 2015 by VRS  |  Email |Print

Hedge funds reduced both bullish and bearish bets on oil for a fourth week as rising OPEC output was met with forecasts for a contraction in U.S. supply. Money managers trimmed their short wagers in West Texas Intermediate oil by 4.3 percent and long bets by 0.2 percent, leading to a 0.8 percent gain in the net-long position, U.S. Commodity Futures Trading Commission data for the seven days ended June 16 show.
Trading in futures is falling as WTI swings in a $5 range, the narrowest in 19 months. The Organization of Petroleum Exporting Countries pumped the most oil last month since October 2012, while the U.S. government says output will start falling from this month………………………………………..Full Article: Source

Chinese investments in Australian resources lowest in decade

Posted on 22 June 2015 by VRS  |  Email |Print

China’s appetite for Australian mining assets has fallen to its ­lowest level in almost a decade, setting a difficult backdrop for Fortescue Metals Group and its efforts to sell a minority stake in its Pilbara iron ore assets.
An analysis by The Weekend Australian of Bloomberg data has found that the number and value of Chinese acquisitions and ­investments in Australia’s resources sector is on track to record its lowest levels since 2007. With just weeks remaining in the 2015 financial year, the data shows only nine Chinese investments in Australian Securities Exchange-listed mining and exploration companies so far this year………………………………………..Full Article: Source

Low oil price hits $200 billion in mega-projects

Posted on 18 June 2015 by VRS  |  Email |Print

Deepwater oil projects and complex gas facilities worth around $200 billion have been cancelled or put on hold worldwide in recent months due to the sharp drop in oil prices over the past year, consultancy Ernst and Young said on Tuesday. Further project cuts and delays are likely as the industry braces for an extended period of lower oil prices as a result of a supply glut.
“The mind set in the industry at the moment is that prices are unlikely to be bouncing up materially in the near term,” the consultancy’s Andy Brogan said in a presentation. “There is an expectation that volatility is with us for a reasonable period of time to come and companies need to cope with that.”……………………………………….Full Article: Source

Smart investors buy gold when prices are low

Posted on 18 June 2015 by VRS  |  Email |Print

Gold prices have extended last weeks’ gains, due to some short covering in the futures markets and some renewed safe-haven buying amid the collapse of the Greek talks with its European creditors. Negotiation between Greece and its creditors collapsed after just 45 minutes of meeting on Sunday. It’s reported the European Union officials blamed the failure on Greece, which failed to offer anything new for securing the EUR 7.2 billion funding.
Greece’s Prime Minister Alexis Tsipras urged the country’s creditors to get “realistic” a day after weekend negotiations failed to bridge major differences, setting the stage for Eurozone finance ministers to make a final push to reach a deal to avert a default………………………………………..Full Article: Source

Speculating on commodities can add diversity to your portfolio

Posted on 17 June 2015 by VRS  |  Email |Print

Anyone with an equity fund that tracks the S&P 500 has something close to 10 per cent of their investment in commodities companies, such as oil and gas producers or the miners of metals and minerals. For anyone who owns the FTSE 100, the figure is more than 20 per cent, largely because BP and Shell dominate the UK stock market.
Yet an increasing number of financial advisers suggest that investors should also carve out an additional piece of their portfolio to invest directly in commodities………………………………………..Full Article: Source

Saudis seeks to make Iran’s oil and gas less attractive for investment: expert

Posted on 15 June 2015 by VRS  |  Email |Print

A professor of international business and international affairs at the George Washington University says Saudi Arabia “wants to make development of Iran’s and Iraq’s oil and gas less attractive for international oil companies at a time when Iran will be specially looking to attract investors to increase its oil output.”
Hossein Askari who served as special advisor to Saudi minister of finance, also says for the future “oil will trade in the $45-$60 for the next 10 years or so.” Askari, a former member of executive board of the International Monetary Fund, also says the high oil prices of “the first decade of the 21st century enabled heavy investment in alternatives and these investments and their direction are irreversible.”……………………………………….Full Article: Source

Are Precious Metals A Good Investment Right Now?

Posted on 11 June 2015 by VRS  |  Email |Print

There has never been consensus in the investment community as to whether or not Gold and precious metals are a worthwhile investment. Theoretically, what makes Gold, Silver, Platinum and Palladium precious is that their value is not only driven by their practical uses, but also by their role as a store of value and an investment. For example, let’s take the grand-daddy of them all: Gold.
Warren Buffett, in a famous Harvard speech in the late 90s, said, “Gold gets dug out of the ground in Africa or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. Anyone watching from Mars would be scratching their head.” As arguably the most successful investor of the 20th century, his is not an opinion to take lightly………………………………………..Full Article: Source

Radical Gold Underinvestment

Posted on 08 June 2015 by VRS  |  Email |Print

Gold remains deeply out of favor thanks to global central banks’ extreme money printing. This fueled a global stock-market levitation that has temporarily short-circuited normal market cycles, leaving investors infatuated with stocks to the exclusion of prudent portfolio diversification.
This has left them radically underinvested in gold, which sets the stage for massive mean-reversion buying when they inevitably return. Portfolio diversification is an absolutely essential tool for investment risk management. This simple and powerful wisdom is ancient, as a three-millennia-old quote from the Israeli king Solomon reveals………………………………………..Full Article: Source

Fund Managers Cut Oil Bets Ahead of OPEC Meeting

Posted on 05 June 2015 by VRS  |  Email |Print

Money managers have been cutting back their bets on oil in the run up to the crucial meeting of the Organization of the Petroleum Exporting Countries in Vienna this week. The number of bets taken by hedge funds and other big investors on the global oil benchmark Brent—comprising bets on both rising and falling prices—has fallen to just over 320,000, the equivalent of 320 million barrels of oil, its lowest level in nine months.
The number of bets on West Texas Intermediate, the U.S. gauge, is at its lowest since the beginning of January. The $2.5 billion United States Oil Fund USO -2.53 % LP, the largest U.S. exchange-traded fund investing in U.S. oil futures, has also drawn back, registering outflows of close to $1 billion in the past two months, according to investment research company Morningstar. In April, the fund lost $550 million, the biggest withdrawal since 2011. It lost another $390 million in May, the data shows………………………………………..Full Article: Source

Investment: Revaluing commodities

Posted on 04 June 2015 by VRS  |  Email |Print

Commodities “couldn’t be hated more”, said the publicity for an investment conference in New York last month. The reason is simple: investors feel let down after a revolutionary attempt to invest in basic materials went horribly wrong.
Four years of negative returns for indices tracking futures, with a fifth under way, have undermined the idea that leaving part of one’s portfolio in a basket of oil, natural gas, soyabeans, copper and other commodities was prudent. “There’s zero interest right now from the institutional space,” says Lawrence Loughlin of Drobny Capital, which hosted the conference……………………………………….Full Article: Source

Oil Investment Opportunites for the Long Term

Posted on 01 June 2015 by VRS  |  Email |Print

The commodity cycle is a major distraction for investors in the oil market. New energy technologies such as solar and wind will command a larger and larger share of the energy pie, but our thirst for energy continues to grow — and oil will remain a pivotal component of the overall mix for many years to come.
With this in mind, let’s look at some of the longer term opportunities that will shape the way oil will be produced in the future, and how investors will be able to make a decent profit in the process. As a single entity, OPEC oversees the between 70% and 80% of the world’s proven oil reserves, and more than 40% of total production. At its current rate, production could be sustained for approximately 90 years. As long as the member countries all have oil in the ground, they have a common interest in sticking together to maintain certain production levels………………………………….Full Article: Source

Goldman Sticks to Commodity Bear Call as Copper Vulnerable

Posted on 26 May 2015 by VRS  |  Email |Print

Commodities will reverse a rally that started in March as a stronger U.S. dollar, cheaper oil and cooling China again pressure raw materials, especially copper, according to Goldman Sachs Group Inc. Copper will lose at least 16 percent over the coming 12 months on China’s weakening demand growth and slowdown in construction completions, analysts including Jeffrey Currie said in a report e-mailed Monday.
Oil in New York will fall to $45 a barrel by October while the dollar continues its rise, pushing commodities prices lower as production costs slide. “We see downside pressures on commodity prices re-emerging,” the analysts wrote in the report. “The recent rise in commodity prices is clearly at odds with our lower-for-longer bearish view across the complex.”……………………………………….Full Article: Source

Should you be investing in gold right now?

Posted on 26 May 2015 by VRS  |  Email |Print

Is this the best time to stay invested in gold? Gold, which neared the keenly-watched $1,400 (Dh5,138) an ounce in 2014, had been an investor’s darling, but the yellow metal has mostly been curtailed in a range so far in 2015. But analysts are painting a bearish picture on gold over the short to medium term.
On Thursday, international spot gold traded at $1,200 an ounce level, after having traded in range of $1,163-$1,306.2 so far in 2015. Gold moved around $1,200 an ounce as bullish catalysts, such as signs of faster inflation, were offset by speculation the Federal Reserve will soon raise interest rates. While the weaker dollar usually draws buyers to gold, there’s also less demand for haven assets with equities near all-time highs………………………………………..Full Article: Source

3 Safe Investments in Commodities

Posted on 25 May 2015 by VRS  |  Email |Print

Commodity prices can be very volatile and change without notice. In the past year alone the key commodities of oil, natural gas, iron ore, silver, and gold have all dropped by double-digits at some point in the year. Looking out even farther all of these commodities are down by at least a third from the peak price over the past decade.
Huge price drops like these can sink commodity stocks, especially those already weighted down by a lot of debt. However, despite this downward volatility commodity prices can go higher as well, minting a fortune for investors. The key is to be invested in a company that can make it through the low point of the cycle to cash in when prices rebound. Here are three safe commodity investments that are very likely to be there when a future uptick in commodity prices finally arrives………………………………………..Full Article: Source

Investments in gold could be the next best bet

Posted on 25 May 2015 by VRS  |  Email |Print

An increasing number of professional money managers think gold will be where the retail punters go to next and it’s true gold has been trading more like a currency than a commodity recently. If the dollar is no longer king, then gold looks like a worthy successor.
For a start, gold is at the bottom of a correction of more than three years and attractively priced for an upward move. It topped out at $1,923 in October 2011 and seems to have bottomed out around $1,140 an ounce. Gold has actually already held up very well with the rise of the US dollar and came second only to the dollar last year in performance against all other currencies………………………………………..Full Article: Source

Gold or Miners: Which Investment Shines Brighter?

Posted on 25 May 2015 by VRS  |  Email |Print

Gold mining stocks have been in the headlines lately as their share prices have moved significantly higher. Between early March and mid-May the Market Vectors Gold Miners ETF (GDX) increased over 17%. The Market Vectors Junior Gold Miners ETF (GDXJ), which tracks smaller-capitalization miners, ticked up over 25% in the same period. Both funds’ result dwarfed the underlying metal’s return of roughly 6.4% during that time.
Historically, advisors and fund investors have used gold miners as one of the few ways to get exposure to the precious metal, says John Gabriel, ETF strategist with Chicago-based Morningstar. That’s changed over the past 10 years or so with the arrival of physical-gold ETFs, which provide direct exposure to the commodity’s price movement………………………………………..Full Article: Source

AfDB invests N14 billion in African agriculture

Posted on 25 May 2015 by VRS  |  Email |Print

The African Development Bank, AfDB, said it has invested N14.78 billion (N2.91 trillion) in the agriculture sector of its Regional Member Countries (RMC) in 46 years to grow their economy. Chiji Ojukwu, the Director of Agriculture and Agro-Industry Department of the bank, stated this in a statement published on the bank’s official website.
In the statement, retrieved by the News Agency of Nigeria on Sunday in Lagos, the director said that between 1968 and 2014, the bank group approved 876 operations. These operations had commitments valued at approximately $14.78 billion that provide support to agriculture and rural development………………………………………..Full Article: Source

Commodities, precious metals funds outflows biggest since 2013 -Lipper

Posted on 22 May 2015 by VRS  |  Email |Print

Investors in U.S.-based funds pulled $597 million out of funds that specialize in commodities and precious metals in the week ended May 20, data from Thomson Reuters’ Lipper service showed on Thursday. The outflows were the biggest since December 2013. Stock funds posted $1.7 billion in outflows over the latest week after attracting $3.7 billion in inflows the prior week.
U.S.-based non-domestic-focused stock funds attracted $3.3 billion of inflows, their 15th straight week of net new cash. “I’m speculating here but possibly stronger economic news caused investors to pull money out of commodities and into stocks,” said Patrick Keon, research analyst at Lipper………………………………………..Full Article: Source

Gold settles lower as market mulls timing of U.S. rate hike

Posted on 22 May 2015 by VRS  |  Email |Print

Gold futures settled lower Thursday as investors parsed the minutes of the Federal Reserve’s April meeting released a day earlier, digging for further clues of the timing of an interest-rate hike.
At least for now, it seems that the possibility of a June rate hike has been deeply diminished. Still, the sense that the first hike in a decade may come sometime this year is giving gold investors reason to pause. Higher rates diminish the appeal of gold, which doesn’t offer interest………………………………………..Full Article: Source

5 Tips For Trading ETFs

Posted on 21 May 2015 by VRS  |  Email |Print

Some investors gloss over the “ET” in ETF, failing to understand or appreciate what these two letters stand for and the implications of investing in a fund that trades like a stock. The exchange-traded nature of these funds is increasingly taken for granted as many of the largest ETFs trade at tight spreads in very narrow bands around their net asset values through most market conditions.
But not all ETFs are created equal from a liquidity perspective, and investors shouldn’t take ETFs’ liquidity for granted. Also, the market mechanisms that underpin the ETF ecosystem have experienced hiccups of varying magnitude, ranging from the “flash crash” to more recent episodes of lesser scope and impact………………………………………..Full Article: Source

Chinese commodity hedge funds cultivate ties with Western investors

Posted on 21 May 2015 by VRS  |  Email |Print

Chinese hedge funds, blamed for several routs in the metal markets in the past 18 months, are developing relations with Western investors as they stretch out beyond their home turf, an executive at London Metal Exchange broker Sucden said.
Chinese metals funds, including Shanghai Chaos Investment Co, were believed to be behind an 8 per cent plunge in the copper price over three days in March 2014 and were active as the metal crashed to a six-year low this year. They have become a dominant force in metals, especially during the Asian day, as Western hedge funds, asset managers and banks have scaled back or quit………………………………………..Full Article: Source

Hedge funds ‘may cover more shorts in wheat, but not sugar’

Posted on 19 May 2015 by VRS  |  Email |Print

Investors noted scope for further short-covering in wheat derivatives, after hedge funds eased back from a record bearish position, but raised doubts over the appetite for extending a large positive shift in raw sugar.
Managed money, a proxy for speculators, cut by more than 37,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Oil Investors Take a Closer Look at Production

Posted on 18 May 2015 by VRS  |  Email |Print

A spotlight has landed on a previously overlooked metric as oil traders drill deeper for clues on price movement. A spotlight has landed on a previously overlooked metric as oil traders drill deeper for clues on price movement.
More often, investors are looking to weekly U.S. oil-production data from the U.S. Energy Information Administration for signs the global glut of crude that sunk prices last year is starting to shrink. That data point, however, has some significant, well-known limitations, and some analysts say traders are giving too much credence to it………………………………………..Full Article: Source

New ETFs Aim to Better Track Commodity Prices

Posted on 18 May 2015 by VRS  |  Email |Print

Investing with commodity exchange-traded funds has always been a bit like eating pancakes with Log Cabin syrup: Close enough for most people, but still a long way from the real thing. ETFs can’t own real-life barrels of oil, for instance, so instead they rely on oil futures, forward-looking derivatives. This recipe comes at a high cost, rendering most of these ETFs nearly useless for long-term investors.
An industry newcomer is about to debut a new ETF structure that aims to provide investors something purer—not a barrel of oil itself, but an ETF that tracks the oft-quoted “spot” price of one. If it works, ETF investors could have a better mechanism for tracking commodities prices. But there are quirks………………………………………..Full Article: Source

Investors Double Down on Spring Turnaround

Posted on 14 May 2015 by VRS  |  Email |Print

When the dollar’s rally stalled in March, some investors began buying beaten-down assets in a shift many expected to be short-lived. It has been two months, and the strategy remains a winner. Now, many of those traders are increasing their bets, providing an unexpectedly sharp lift for the euro, oil and other investments that were trampled when the U.S. currency surged.
Many traders say the turnabout has been driven in part by signs that a wave of unprecedented economic stimulus in Europe is starting to bear fruit, boosting lending and manufacturing across the region. China, the world’s largest commodity buyer, has launched its own series of programs aimed at steadying its economy…………………………………….Full Article: Source

Gartman: Forget OPEC, here’s why I’m getting long oil

Posted on 13 May 2015 by VRS  |  Email |Print

OPEC’s latest warning that crude could stay below $100 a barrel for the next decade wasn’t enough to keep Dennis Gartman on the sidelines in the oil market. To the contrary, the founder of “The Gartman Letter” said that he’s now bullish on crude oil for the first time “in a very, very long while.”
The Organization of the Petroleum Exporting Countries said in a draft of its latest strategy report that it doesn’t expect crude to trade consistently above $100 per barrel in the next decade, according to the Wall Street Journal. The draft reportedly forecasted crude trading at around $76 per barrel in 2025, and also modeled scenarios where crude would trade below $40 per barrel in 2025………………………………………..Full Article: Source

Zinc to lead improvement in base metals prices

Posted on 12 May 2015 by VRS  |  Email |Print

After indications of consolidations during the previous month, base metals prices improved during the previous month. Lead prices outperformed others with a gain of 17.5% to US$2125/ tn followed by zinc, which rose by 13.5% to US$2356/ tn.
Aluminium rose 6.7% to US$1910/ tn and copper prices gained by 3.2% to US$6245/ tn Sharp rise in lead prices and zinc prices along with fall in USD index can also be attributed to the sharp fall the inventory levels. Lead inventory fell by 25%, while zinc inventory fell by 8% and aluminium inventory fell 3%. Copper inventory rose by 2% MoM……………………………………….Full Article: Source

Commodities as a safe haven?

Posted on 08 May 2015 by VRS  |  Email |Print

We’ve been seeing some shaky equity markets lately. The stock markets can be great to trade when there’s a good trend going on, but while we are still in a global equity bull market, there may be some shaky periods ahead. Perhaps there are better opportunities in other asset classes.
The key advantage of commodity markets is that they’re not correlated to the financial markets. Whether the stock markets are heading up or down has very little impact on the price of rice. At the moment, there are some very interesting trends going on in the commodities space which are completely unrelated to what’s going on in stocks and bonds at the moment………………………………………..Full Article: Source

Gold an ‘unreliable’ hedge against geopolitical risk – SocGen

Posted on 08 May 2015 by VRS  |  Email |Print

Gold is not reliable as a hedge against geopolitical risks, Société Générale said on Thursday. The performance of the yellow metal in periods of regional military conflicts is mixed and it has not performed well consistently, the bank said in a note on Thursday.
One of the most recent examples is the annexation of Crimea by the Russian military during which gold initially rallied towards $1,400. “[But] the gold rally didn’t last very long and it wasn’t long before gold was trading at levels below when armed men seized Crimea’s parliament,” SocGen said………………………………………..Full Article: Source

Gold At Buy Point: RBC

Posted on 08 May 2015 by VRS  |  Email |Print

Analysts have noted that the gold market has suffered because of lackluster investment demand, as investors shift away from precious metals and into higher yielding assets like equities. However, one analyst at RBC Wealth Management sees some higher short-term risk to equity markets, which could be bullish for gold and silver.
Bob Dickey, technical analyst at RBC, said in his Market Maps report, published Tuesday that the S&P 500 is six years into what could be a 27-year secular bull market, if historical patterns prove correct. “The years ahead could represent a good time to own stocks, in general, much like it was in the 1975–2000 period,” he said in the report………………………………………..Full Article: Source

Silver investors corner the market, not JP Morgan

Posted on 06 May 2015 by VRS  |  Email |Print

On Friday GoldCore posted an article asking whether JP Morgan was cornering the silver bullion market, noting their Comex warehouse stocks of 55 million ounces and claims by Ted Butler that they “may be holding as much as 350 million ounces of physical silver.” My short answer: I don’t think so.
The clear import from the article is that because the warehouse has JP Morgan’s name out front that all the silver insider is theirs. However, JP Morgan has large market share of global precious metal market activity with a significant number of industry participants using JP Morgan to buy and sell physical and futures, and for storage services. It is therefore highly unlikely that none or little of the silver in JP Morgan’s warehouse is held on a custodial basis for clients………………………………………..Full Article: Source

Why they prefer commodities to equities

Posted on 04 May 2015 by VRS  |  Email |Print

Bengaluru-based Suby Mathews quit his high-profile banking job four years ago to pursue trading full time. Mathews too started off with equities and switched to commodities five years ago. Why commodities? The longer trading window, though it makes for more volatility, provides an opportunity to make more money. “The market is open till late in the night, which gives numerous short-term trading opportunities, albeit with a bit more risk,” he explains.
So, what are his favourites? He prefers to trade energy — crude oil and natural gas — and occasionally trades in gold too. Does he limit himself to just commodities? He trades in Nifty futures and options and occasionally in currency futures………………………………………..Full Article: Source

Should I Have Held Commodities In My Portfolio?

Posted on 28 April 2015 by VRS  |  Email |Print

Commodity funds manifest inferior risk-adjusted return, relative to other asset classes. Absence of conclusive superior risk-adjusted returns for portfolios holding commodity funds. Commodity performance as an investment varies by the particular fund (proxy) used. Commodities are a relatively new asset class. (They are new at least with respect to domestic equities.)
That is, it was only within the last dozen years that a lay investor could get their hands on a commodities mutual fund. And as with many new investments, the fledgling commodities fund history has been relatively volatile; the previous bull run has turned bear………………………………………..Full Article: Source

Where should investors look when Oil recovers?

Posted on 24 April 2015 by VRS  |  Email |Print

When oil prices recover-and plenty of analysts think the climb back up will start soon-Canada’s western frontier of Saskatchewan and neighboring Alberta will ’still have the edge’, according to a report from TD Economics. Depressed oil prices may have skewed the view from Canada’s oil-producing west, but this will be one of the better places to bet on the oil rebound.
Saskatchewan remains the last highly accessible onshore North American oil frontier and it is home to part of the prolific Williston Basin. And as the industry gears up for the Williston Basin Petroleum Conference(WBPC) on 28 April, the message is clear: Saskatchewan is still alive and kicking…………………………………..Full Article: Source

Gold down as investor indifference to bad news takes hold

Posted on 23 April 2015 by VRS  |  Email |Print

Gold’s inability to break out of its recent $20 range could indicate that the market has become numb to bubbling geopolitical risk. Gold for June delivery on the Comex division of the New York Mercantile Exchange was last down $4.20 at $1,198.90 per ounce. Trade has ranged from $1,197.70 to $1,204.40.
“History has shown how well gold can perform during times of elevated uncertainty – as it happens, the height of the Eurozone crisis a few years ago coincided with gold rallying to record highs,” UBS analyst Edel Tully said. “It appears that the market has, in a sense, become desensitised to bad news. Eurozone uncertainty is acting more as a cushion for gold right now, rather than an upside catalyst as it had in the past, and prices are clinging to the $1,200 mark,” she added. …………………………………..Full Article: Source

Investors See Opportunities in Commodities

Posted on 21 April 2015 by VRS  |  Email |Print

Commodities from crude oil to copper to sugar are luring investors, fueled by signs of a healing global economy and a pause in the dollar’s rally. Investors are tiptoeing back into commodities from crude oil to copper to sugar, fueled by signs the global economy is healing and a pause in the U.S. dollar’s rally.
The Standard & Poor’s GSCI Index, which tracks the prices of 24 commodities, has risen more than 12% over the past month and around midday stands near its highest level since December. Fueling those gains are higher prices for oil, which have risen by nearly a third from their lows, as well as rallies in copper, sugar, gold and other raw materials…………………………………..Full Article: Source

Researchers Warn of Global Oil Price Crisis as Investors Shy Away

Posted on 20 April 2015 by VRS  |  Email |Print

The drop oil prices has changed the longstanding laws of the energy market and made investors deeply insecure about financing expensive projects in the future. The risk of a global oil crisis has increased and investors are becoming more and more cautious about financing expensive projects, according to a study by the Hamburg Research Office Energycomment, presented by the German magazine “Der Spiegel”.
The researchers stated that low oil prices resulted in a drastic cut of investments in long-term energy projects, including the development of the Arctic and production of synthetic and biological fuels. Oil prices have almost halved since the summer of 2014, and currently lie below the level of 60 dollars per barrel. For the first time, the drop was caused not by an economic crisis, but tough competition in the global oil market, experts claim……………………………………Full Article: Source

Investors Who See ‘Froth’ in Market Go All In for Oil

Posted on 20 April 2015 by VRS  |  Email |Print

Joseph Gladbach and his fellow bankers at Jefferies Group field three to five calls a day from investors eager to park their millions in energy stocks or bonds in the worst down cycle in 30 years. They’re no dummies, Gladbach says. One of the biggest mysteries of the oil market crash is why the money hasn’t dried up. The collapse in crude prices was supposed to devastate companies and spook investors after wiping more than $200 billion off the balance sheets of U.S. and Canadian producers. It didn’t.
As industry luminaries gather at the IHS CeraWeek Energy Conference in Houston this week to ponder the implications of $50-a-barrel crude, the money keeps piling into oil, with hedge funds, buyout firms and asset managers rushing to claim a spot at the table……………………………………Full Article: Source

Copper Bulls Backing Away as China Woes Trump Supply Concerns

Posted on 20 April 2015 by VRS  |  Email |Print

Investors are backing away from copper after the biggest two-month rally since 2012. The problem is that demand is slowing in China, which accounts for about half of global copper use. Producers including Freeport-McMoRan Inc. say Chinese buying hasn’t picked up as it normally does at this time of year, and Goldman Sachs Group Inc. and Societe Generale SA are among banks predicting lower prices.
The metal is losing its appeal for money managers, who have reduced their net-long positions for two straight weeks, according to Commodity Futures Trading Commission data. Analysts, traders and hedge funds surveyed by Bloomberg last week were split on the price outlook, assessing rising inventories and prospects for reduced China consumption against aging mines that will mean limited supply gains……………………………………Full Article: Source

Are Low-Risk High-Yield Investments Real?

Posted on 16 April 2015 by VRS  |  Email |Print

The low-risk, high-yield investment—it’s the Holy Grail of finance, or perhaps more aptly, the perpetual motion machine. One that rewards its holder out of proportion to the danger of holding it. But is there indeed such a thing as a vehicle that can combine the returns of a Lotto ticket with the safety of a Series I savings bond?
As a rule, the correlation between risk and reward in the market is almost perfectly positive. Common sense or a few seconds’ rumination should show you why that’s the case, but here’s an explanation anyway. The more people desire an investment because of its expected returns, the greater the demand, and thus the higher its price goes………………………………………..Full Article: Source

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