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Commodities Briefing - Category | Investment more

Is Gold Still a Good Investment Today?

Posted on 25 February 2016 by VRS  |  Email |Print

In the last few months, China’s economy has been faltering, and it has been having an effect on world financial markets. Due to this recent development, gold prices have shot up compared to what it used to be before.
During the period of the introduction of the Gold Reserve Act back in 1934, the price of gold was set to be $35 an ounce. That is a record increase of more than 300% between then and now. Actually, gold is a volatile investment. When it comes to gold, prices can go down as well as up, and over the last few years they have done both. At the height of the recession, way back in 2011 for instance, gold hit a record high of $2,000 per ounce. But by the end of 2014, the price of gold had fallen to $1,200 per ounce………………………………………..Full Article: Source

Gold nearing a bull market for the first time since 2013

Posted on 24 February 2016 by VRS  |  Email |Print

Investors are falling back in love with gold thanks to the woman who came between them in the first place: Janet Yellen. A rally in prices this month has the precious metal nearing a bull market for the first time since 2013 amid mounting expectations that Federal Reserve Chair Yellen won’t follow through on her forecast for raising US interest rates further this year.
The prospect of lower-than-expected borrowing costs - along with weakening equity and currency markets - is reviving gold’s appeal as a store of value. Global gold holdings in exchange-traded funds (ETFs) also are climbing………………………………………..Full Article: Source

Gold investment demand in China to grow if price rally holds

Posted on 19 February 2016 by VRS  |  Email |Print

Gold investment demand in China has started 2016 quite strongly, outperforming interest in jewelry, but for the momentum to continue bullion would have to maintain its price rally, a World Gold Council (WGC) official said.
With a 14 percent gain, gold XAU= is the best performing asset so far this year after falling for three straight years to 2015. The metal hit a one-year high last week as turmoil in global stock markets triggered safe-haven demand………………………………………..Full Article: Source

Investment Keeps Eluding Australia as Commodities Rout Endures

Posted on 18 February 2016 by VRS  |  Email |Print

Australian policy makers have been scouring economic data every three months for signs of a pick up in investment outside the mining industry. Three years on, and with a 30 percent depreciation in the currency and record-low interest rates, it remains as elusive as ever.
“It has felt a lot like waiting for Godot,” said Gareth Aird, a senior economist at Commonwealth Bank of Australia, the nation’s largest lender by market value. “A lift in non-mining investment remains the missing ingredient in the Australian economic growth transition story.”……………………………………….Full Article: Source

Crude oil looks best bet among assets this year, should rebound towards $47 level

Posted on 16 February 2016 by VRS  |  Email |Print

Slow growth in the global economy, low demand, and comfortable supplies across the world with OPEC nations continuing to pump in more than 30 million barrels per day for most of 2015 was a significant factor in pulling down oil prices.
Besides, robust global inventories in the OECD nations which rose by a notional 1 billion barrels in 2014-15 with the fundamentals suggesting a further build of 285 million barrels over the course of 2016. Hence, the pain on the crude counter has been continuing so long and this is evident in the chart above, wherein crude oil has been consistently falling for three years in a row……………………………………….Full Article: Source

Gold no longer a safe haven asset

Posted on 15 February 2016 by VRS  |  Email |Print

Yet again panicky investors are rushing to buy gold at a time of global financial turmoil. It seems that most of the buying of gold is done by ordinary people who are not fully aware of what is actually happening in the global financial markets or the world economy. The rush to buy gold has pushed its price up sharply this year ignoring the rout in global commodity markets.
Just for a reminder that price of gold has been falling for the past six years. I believe that some of the rally in gold price has something to do with the Indian seasonal festivals and the Chinese New Year. There is this recent argument that has been pushed around by the gold bulls……………………………………….Full Article: Source

Metal Bulls Savor Longest Rally in 10 Months on Feeble Dollar

Posted on 08 February 2016 by VRS  |  Email |Print

Investors are jumping back into metals they were dumping as recently as a month ago. A global slowdown has increased speculation that U.S. growth will cool enough to force Federal Reserve policy makers to wait longer before raising interest rates again.
The prospect of delays sent the dollar lower and gave metals a boost as alternative investments. Speculators increased their bets on price gains for gold and silver and got less bearish on copper. Gold and copper prices have climbed for three straight weeks, the longest rally since at least mid-April………………………………………..Full Article: Source

Here’s What Oil and Gas’s Ugly 2015 Did to Business Investment

Posted on 04 February 2016 by VRS  |  Email |Print

In the final quarter of 2014, business investment related to oil, gas and other mining hit an all-time high. One year later, that’s dropped by more than half. It’s the second-biggest yearlong drop in inflation-adjusted investment seen by any of the major categories in more than 50 years. (Which is how long we’ve had comparable data.)
Even by standards set by previous swings in the relatively small, volatile mining and gas sector, this one’s a humdinger. Mining and petroleum is one of the smallest categories of business investment, especially after that brutal four-quarter stretch lopped off half its size, but it has still caused some of the biggest swings in the distribution of business investment in the modern era………………………………………..Full Article: Source

Chinese Seen Buying More Gold as Investors Seek Haven Assets

Posted on 04 February 2016 by VRS  |  Email |Print

China’s gold demand will keep expanding as investors seek safe assets and jewelry buying increases, the China Gold Association said. Consumption in the country that vies with India as the world’s biggest user climbed 3.7 percent to 985.9 metric tons in 2015 from a year earlier, according to group data released on Wednesday.
Demand rose as prices declined and investors allocated more wealth to the safety of bullion than to other financial assets, according to the association, which represents jewelers, refiners, banks, brokerages and miners………………………………………..Full Article: Source

Investors concerned about commodities, energy: Moody’s

Posted on 02 February 2016 by VRS  |  Email |Print

Major investors listed the credit quality of the commodities and energy sectors as their biggest worry this year, as oil oversupply combines with reduced demand from China to drive energy prices sharply lower, said ratings agency Moody’s Investors Service in a report.
The finding on the most exposed sectors to downside risks in 2016 — the result of polling the region’s largest investors, intermediaries and debt issuers based in Singapore and Hong Kong — was consistent with Moody’s view that rated Asian corporates with commodity exposure remain in a precarious position………………………………………..Full Article: Source

Investment funds hit all time high in 2015

Posted on 27 January 2016 by VRS  |  Email |Print

Investment funds under management hit a record high of £871 billion in 2015, up from £835 billion in 2014. The figures, published by The Investment Association – a body that represents UK investment managers – come despite the turmoil in markets in the latter half of the year as a Chinese slowdown and commodity rout dented investor sentiment.
UK Equity Income was once again the best-selling fund sector of the year. Meanwhile tracker funds, which aim to replicate performance of a particular stock market index such as the FTSE, had their best year ever………………………………………..Full Article: Source

Why Gold Is Not a Good Safe Haven Investment

Posted on 20 January 2016 by VRS  |  Email |Print

Gold is typically considered a safe haven while markets are volatile, and with the recent equity slide both in China and US, investors are thinking of gold as an alternative, safe haven investment. Indeed, since the start of the year gold prices have received a boost, hitting a 2-month high as global stock markets sold-off.
The global stock rout didn’t have any bullish effect on silver prices since the precious metal has an industrial metal status, too. That might help explain why gold fared better than silver in January………………………………………..Full Article: Source

Another Chance to Join Commodity Rally You Probably Missed

Posted on 19 January 2016 by VRS  |  Email |Print

Traders and investors have another chance to join a rare commodity rally that probably passed them by last year. European Union pollution permits, beaten only by London cocoa in 2015, may have further to roll.
Spurred by European Union lawmakers in Brussels, the contracts are poised to gain about 39 percent in 2016, after a poor start to the year, according to a survey of 13 traders and analysts by Bloomberg. That would be a record third year of gains after prices climbed 11 percent in 2015………………………………………..Full Article: Source

Commodity exposure in 2016 requires care

Posted on 11 January 2016 by VRS  |  Email |Print

Having serially disappointed investors for a while, commodities could well offer investors one of the most compelling investment opportunities in 2016. The sector’s attractiveness is likely to increase as the year proceeds, offering multiple entry points for potentially attractive medium-term return opportunities. Exploiting them will require emphasis on portfolio construction, with the design of the right investment vehicles as important as careful asset selection.
To say that 2015 was a difficult year for commodities would be an understatement. While oil grabbed most of the headlines with its volatile drop of one-third in price to seven-year lows, the damage was widespread with copper, corn, platinum and sugar also falling significantly………………………………………..Full Article: Source

Gold rebounds on safe-haven demand as stocks face headwinds

Posted on 11 January 2016 by VRS  |  Email |Print

Gold bounced back on Monday with the market inching towards last session’s nine-week high as pressure on Asian stock markets triggered safe-haven bids for the metal. Gold climbed to its highest since early November on Friday, adding more than 4 percent to its value this year, as concerns over the Chinese economy and tumbling stock markets boosted the safe-haven appeal of the precious metal.
Investment appetite for bullion showed signs of picking up last week. Holdings of the world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rose 4.2 tonnes on Thursday, data from the fund showed………………………………………..Full Article: Source

Investors in the mood to cut hedge fund exposure

Posted on 11 January 2016 by VRS  |  Email |Print

Global investors are planning to cut their exposure to hedge funds in 2016 following a disappointing performance in the past year, according to a survey. The poll data, from research group Preqin, will be met with dismay by the hedge fund industry, which had hoped volatile stock markets would encourage investors to seek alternative sources of return. It is also likely to add extra pressure on hedge fund fees.
Preqin’s survey of institutional investors showed that more are planning to cut their hedge fund holdings this year than are planning to increase them, by 32 per cent to 25 per cent……………………………………….Full Article: Source

Moody’s: Oil, gas companies to cut investments by quarter

Posted on 07 January 2016 by VRS  |  Email |Print

World’s oil and gas companies will cut capital investments by 20-25 percent against the background of lower oil prices, the international ratings agency Moody’s forecasts. Oil and gas sector expects an increase in the number of defaults in 2016, the agency said in a report Jan. 6.
The excess supply of oil will continue to put pressure on the world oil market, according to analysts of the agency. Moody’s noted that the oil-producing countries, including the non-OPEC states, won’t limit the volume of production due to the struggle for market share………………………………………..Full Article: Source

The long view is the only view on commodity income

Posted on 06 January 2016 by VRS  |  Email |Print

We hear a lot of criticism these days of people focussing too much on the short term. Whether it be business people not looking beyond next quarter’s financial results, or politicians supposedly hostage to a 24 hour news cycle. Both claims, in my view and experience, are greatly overstated.
Where I do find worrying short-termism, however, is in Australia’s approach to commodity prices. The media will show a 2-3 year graph of, say, oil or iron ore prices dropping from over $100 a barrel or tonne to now be around $40………………………………………..Full Article: Source

Base metal investors may not be able to wake up from this nightmare

Posted on 06 January 2016 by VRS  |  Email |Print

You know it’s grim when a sector’s primary bull case involves bankruptcy. Unfortunately for those in the base metals space, “that’s the situation we find ourselves in,” said Edward Meir, senior commodity analyst with INTL FCStone. The just-concluded year of 2015 is one that base metals investors will desperately want to forget.
Amid a dour environment for commodities overall, these industrial metals were among the hardest hit. Aluminum slid 11 percent, copper was down 24 percent, nickel dropped 42 percent, and precious-metal-with-industrial-uses platinum fell 26 percent. With that in mind, observers warn not to expect much in the way of a reprieve………………………………………..Full Article: Source

Commodities a ‘compelling’ investment opportunity in 2016

Posted on 05 January 2016 by VRS  |  Email |Print

Having serially disappointed investors for a while, commodities could offer one of the most compelling investment opportunities in 2016. The sector’s attractiveness is likely to increase as the year proceeds, offering multiple entry points for potentially attractive medium-term return opportunities.
Exploiting them will require emphasis on portfolio construction, with the design of the right investment vehicles as important as careful asset selection. To say that 2015 was a difficult year for commodities would be an understatement. While oil grabbed most of the headlines with a drop of one-third in price to seven-year lows, the damage was widespread with copper, corn, platinum and sugar also falling significantly………………………………………..Full Article: Source

Commodity exposure in 2016 requires care

Posted on 05 January 2016 by VRS  |  Email |Print

Having serially disappointed investors for a while, commodities could well offer investors one of the most compelling investment opportunities in 2016.
The sector’s attractiveness is likely to increase as the year proceeds, offering multiple entry points for potentially attractive medium-term return opportunities. Exploiting them will require emphasis on portfolio construction, with the design of the right investment vehicles as important as careful asset selection………………………………………..Full Article: Source

Why Now Is the Time to Buy Gold

Posted on 05 January 2016 by VRS  |  Email |Print

Gold has a message for the market: You’re a nut if you trust the Fed. In the days since the arbiters of American monetary policy raised interest rates on December 16 — the first rate hike in nearly a decade — gold prices have pretty much gone nowhere. On December 15, the day before the Fed’s announcement, gold closed near $1,065.
As I write this, it’s at $1,070 … and it has seen a high of $1,084 and a low of $1,052. Like I said, it has gone nowhere. Which, if you believe the claptrap that passes for institutional knowledge and learned wisdom on the business news channels, defies preconceptions about the metal………………………………………..Full Article: Source

Investors Go for Gold as Market Tumbles

Posted on 05 January 2016 by VRS  |  Email |Print

Gold started 2016 on a bright note. Investors seeking safety from the tumbling stock market and rising tensions in the Mideast are buying beaten-up exchange-traded funds that track the price of gold and the miners that dig it out of the ground.
The nearly $22 billion SPDR Gold Trust , or GLD, and was up 1.2% while the S&P 500 fell 2.2%. Even gold producers, some of last year’s most troubled companies as gold prices fell for a third straight year, rose on Monday. The $4.3 billion Market Vectors Gold Miners ETF added 1.5% on the heels of five years of declines, 2015’s topping 25%………………………………………..Full Article: Source

Seven magnificent commodity bets for 2016

Posted on 04 January 2016 by VRS  |  Email |Print

It’s always tempting for commodity analysts to issue forecasts for the coming year, even though we intrinsically know that the future is inherently uncertain and even the most reasoned expectations can be easily confounded by events. With that in mind, and with a nod to my fellow Australians’ love of a punt, I’ve decided rather to do a list of bets I may be tempted take in commodity markets in 2016, assuming I was allowed to wager.
1. Crude oil will trade both below $30 a barrel and above $60 in 2016: Logic and momentum suggest the first part of this bet is a no-brainer, with both Brent and WTI crude already having tested below $35 (Dh128.45) a barrel. The second part relies on history repeating itself insofar as when the bottom is reached, the rebound tends to be rapid………………………………………..Full Article: Source

Big oil to cut investment again in 2016

Posted on 04 January 2016 by VRS  |  Email |Print

With crude prices at 11-year lows, the world’s biggest oil and gas producers are facing their longest period of investment cuts in decades, but are expected to borrow more to preserve the dividends demanded by investors.
At around $37 a barrel, crude prices are well below the $60 firms such as Total, Statoil and BP need to balance their books, a level that has already been sharply reduced over the past 18 months. International oil companies are once again being forced to cut spending, sell assets, shed jobs and delay projects as the oil slump shows no sign of recovery………………………………………..Full Article: Source

2016 to see global oil and gas investments at lowest level in six years

Posted on 04 January 2016 by VRS  |  Email |Print

News agency Reuters is reporting that the oil price slump witnessed in 2015 will loom large over 2016 as: “Global oil and gas investments are expected to fall to their lowest in six years in 2016 to $522 billion, following a 22 percent fall to $595 billion in 2015, according to the Oslo-based consultancy Rystad Energy.”
This news comes as little surprise as the appetite for expensive investment projects is likely to be low amongst management teams looking to batten down the hatches to ride out a crude oil price slump largely attributed to an oversupplied market………………………………………..Full Article: Source

Commodity funds hemorrhage cash as investors bail at record pace

Posted on 29 December 2015 by VRS  |  Email |Print

Investors can’t seem to get away from non-energy commodities fast enough. A record US$857 million was pulled this year from U.S. exchange-traded funds backed by broad baskets of everything from grains to metals, according to data compiled by Bloomberg through Dec. 23.
The value of the funds plunged 26 per cent as raw materials tumbled to a 16-year low. Hedge funds are expecting more losses, betting on price declines for gold, copper, corn and natural gas. While energy-linked funds were the only commodity group to see net inflows this year, oil and gas didn’t escape an almost across-the-board decline in prices………………………………………..Full Article: Source

Commodities’ cycle upsets investor returns

Posted on 29 December 2015 by VRS  |  Email |Print

If one of your new year’s resolutions in 2015 was to invest in a FTSE 100 tracker, you may be ruing the day you did so. With the end of the year upon us, the global resources rout has dragged the index down by more than 7 per cent since January (though an average dividend yield of 4 per cent provides some consolation).
The big question is whether the oil companies and mining stocks that have dug passive investors into a deep hole can climb out of it next year — but few are willing to predict a happy ending in the short term. The table of the FTSE 100’s biggest losers is dominated by the miners. Topped by Anglo American — down 75 per cent this year as the collapse in the iron ore price caused its dividend payments to cave in — Glencore, BHP Billiton and Antofagasta make up four of the worst five performing stocks, with Rio Tinto languishing at number seven………………………………………..Full Article: Source

Seven (possibly) magnificent commodity bets for 2016

Posted on 28 December 2015 by VRS  |  Email |Print

It’s always tempting for commodity analysts to issue forecasts for the coming year, even though we intrinsically know that the future is inherently uncertain and even the most reasoned expectations can be easily confounded by events.
With that in mind, and with a nod to my fellow Australians’ love of a punt, I’ve decided rather to do a list of bets I may be tempted take in commodity markets in 2016, assuming I was allowed to wager. 1. Crude oil will trade both below $30 a barrel and above $60 in 2016………………………………………..Full Article: Source

Patient Investors Will See Rewards When Commodities Rebound

Posted on 18 December 2015 by VRS  |  Email |Print

Commodities continue to slump. Prices for gold, silver, oil, natural gas and other commodities are languishing, in some cases, at levels not seen for years. ETF commodity funds have also struggled. But for individuals with a long-term perspective, this may be the perfect time to invest in commodities.
Prices will eventually rebound A number of major mining companies have also done an admirable job cutting costs and improving efficiency. They will be well prepared to address returning demand. That is likely to occur when the Chinese economy bounces back and other emerging and European markets hit smoother waters………………………………………..Full Article: Source

Weaker commodity prices unsettling investors

Posted on 16 December 2015 by VRS  |  Email |Print

The oil price established a new lower range last week, falling below $40 for the first time since 2008. We expect to see some improvement in the oil supply/demand balance as we move through 2016, but in the short term oversupply will persist.
Supply-pressures have been driven by both OPEC and US shale producers. Counter-intuitively, OPEC’s production has been on an increasing trend despite the sharp fall in the oil price since 2014 and capacity is expanding as sanctions are lifted on Iranian exports………………………………………..Full Article: Source

Gold Market Becoming `Dull’ as Investors Factor in Higher Rates

Posted on 10 December 2015 by VRS  |  Email |Print

Gold’s price swings are running out of steam as investors factor in the likelihood that the Federal Reserve will raise interest rates next week. After jumping the most since August on Dec. 4 and then sliding 0.8 percent on Monday, bullion futures gained 0.1 percent on Tuesday.
The metal touched a five-year low last week on expectations that the Fed will soon raise borrowing costs, curbing demand for assets that don’t pay interest. There’s an 78 percent chance that policy makers will raise rates at their Dec. 15-16 meeting, Fed-funds futures show and Fed Chair Janet Yellen has said the pace of increases will be gradual. Holdings in bullion-backed funds snapped the longest run of declines since March………………………………………..Full Article: Source

Investors brace for more losses as commodities crunched

Posted on 09 December 2015 by VRS  |  Email |Print

BHP shares have dropped below $17 each and South32 under $1 for the first time after commodities were crunched again overnight and mining giant Anglo American cancelled its dividend.
Brent oil dipped below $US40 a barrel for the first time since early 2009, before recovering, while iron ore continued its descent, with the Qingdao benchmark shedding another US41¢, or 1.1 per cent, to $US38.65 a tonne. On the London Stock Exchange, investors dumped Rio Tinto, driving the price of its shares down 8.4 per cent, while BHP Billiton dropped a further 5.5 per cent………………………………………..Full Article: Source

Commodities Slump Hammers Sector’s Junk Bonds

Posted on 07 December 2015 by VRS  |  Email |Print

Deep losses on bonds from junk-rated U.S. energy and mining firms are rattling even seasoned investors, underscoring the challenges facing these companies amid a prolonged slump in commodity prices. Many bond prices are down 60% or more this year. Oil prices are still low due to a global supply glut, and metals prices are declining as China’s economic growth slows.
The moves are prompting worries that defaults could increase in the coming months, potentially sparking a fresh bout of selling that could spread to other parts of the junk-bond market. Among this year’s worst performers: some Linn Energy LLC bonds have fallen nearly 80%, Penn Virginia Corp. bonds are down 75% and Chesapeake Energy Corp. bonds are down 60%, according to figures from MarketAxess Holdings Inc. All three firms produce oil and natural gas in the U.S………………………………………..Full Article: Source

Investors have to accept oil market volatility is here to stay

Posted on 04 December 2015 by VRS  |  Email |Print

A three-fear factor – China, the anticipated Fed rate rise and oil – were behind the risk-off flurry that drove the global high yield bond market down for four consecutive months this summer and into an attractive ‘buy’ territory.
We think the worries were exaggerated. Investors feared the Chinese slowdown was out of control, but though the Chinese authorities have been poor at communication they have made sensible decisions, easing fiscal and monetary policy and supporting sectors that needed it. In the US, the Fed has postponed interest rate rises and made it clear that when they come they will be gentle and incremental………………………………………..Full Article: Source

Investors look forward to a better year for oil

Posted on 03 December 2015 by VRS  |  Email |Print

Crude oil prices have seen a volatile 2015, having fallen around 20 percent since the start of the year as the glut of oversupply, which has resulted in a barrel of oil losing over half its value since last summer’s highs, persisted.
But after a year of bearish price forecasts, a large number of investors are finally seeing some light at the end of the tunnel for the oil price next year………………………………………..Full Article: Source

Gold investors become sellers

Posted on 27 November 2015 by VRS  |  Email |Print

Gold prices continue to fall as the declining cost for oil assuages investors’ fears of inflation. Growing anticipation that U.S. interest rates will start rising soon is also adding to gold’s woes. Venezuela snapped the gold market to attention earlier this year with its liquidation of 6.6 tons of the yellow metal.
Under former President Hugo Chavez, the country’s central bank accumulated gold as a part of its foreign currency reserves. With plunging oil prices knocking the country’s economy for a loop, Venezuela found itself with little ability to earn foreign currencies. So it said goodbye to those 6.6 tons………………………………………..Full Article: Source

Gold premium over platinum extends to $240/oz; investors eye opportunities - Metals

Posted on 25 November 2015 by VRS  |  Email |Print

The premium of gold over platinum has moved to its largest on record, at around $240/oz, as platinum becomes increasingly detached from gold and some investors look to take advantage, sources said Tuesday.
Platinum was trading around $835/oz on spot markets in morning trading, dragged down by base metals, while gold hovers around $1,075/oz. Both have performed badly this year, hitting multi-year lows, but at $240/oz, the premium of gold over platinum has never been as large………………………………………..Full Article: Source

Hedge funds have never been this bearish on commodities

Posted on 24 November 2015 by VRS  |  Email |Print

Large scale futures investors like hedge funds or so-called managed money have entered an unprecedented bearish position towards commodities markets. According to the Commodity Futures Trading Commission’s weekly Commitment of Traders data, five weeks of selling has seen 13 of the 24 commodities tracked pushed into net short positions.
Thos include the major commodities like crude oil, gasoline, gold, copper, soybeans, corn and wheat where speculators are betting that these commodities will be cheaper in future………………………………………..Full Article: Source

Investors continue to flee gold market

Posted on 24 November 2015 by VRS  |  Email |Print

Gold slipped again on Monday as a strong dollar and a looming Federal Reserve rate hike had speculative investors abandoning the complex. Gold for December delivery on the Comex division of the New York Mercantile Exchange was last down $9.60, or 0.91 percent, at $1,066.70 per ounce. Trade has ranged from $1,065.00 to $1,076.50.
“Despite a recent slight regain, and burgeoning physical demand, the gold price is still in a period of weakness. Even growing geopolitical uncertainties that tend to support the ‘crisis metal’ were not able to change the current trend,” said Heraeus, which added that short-term support is now $1,066, while a test of 2010 low at $1,045 looms on the horizon………………………………………..Full Article: Source

Investors Flee Precious Metals as ETF Outflows Top $1 Billion

Posted on 16 November 2015 by VRS  |  Email |Print

Investors are back to dumping precious metals as gold trades near five-year lows and banks including Barclays Plc forecast more price declines. Outflows from U.S. exchange-traded funds backed by precious metals have reached $1.12 billion so far in November, heading for the first monthly loss since July, data compiled by Bloomberg show.
Gold prices have fallen for four straight weeks as Federal Reserve Chair Janet Yellen signaled that officials are getting closer to raising U.S. interest rates, cutting bullion’s appeal as a store of value. Holdings in futures contracts have dropped to a five-week low………………………………………..Full Article: Source

What fund managers get wrong about commodities?

Posted on 12 November 2015 by VRS  |  Email |Print

Many investors misunderstand commodities. After this year’s torrid performance, it is time to question commodities’ perceived special status as a play on growth and a portfolio diversifier. What once looked like an asset class with unique attributes, now just looks like a way to lose money.
Yet it may be a human weakness to be impressed by the apparent solidity of commodities and their seeming permanence. In a world of abstract securities, physical resources seem to represent something tangible and understandable. Investors need to re-examine the case for commodities with less emotion………………………………………..Full Article: Source

What fund managers get wrong about commodities?

Posted on 12 November 2015 by VRS  |  Email |Print

Many investors misunderstand commodities. After this year’s torrid performance, it is time to question commodities’ perceived special status as a play on growth and a portfolio diversifier. What once looked like an asset class with unique attributes, now just looks like a way to lose money.
Yet it may be a human weakness to be impressed by the apparent solidity of commodities and their seeming permanence. In a world of abstract securities, physical resources seem to represent something tangible and understandable. Investors need to re-examine the case for commodities with less emotion………………………………………..Full Article: Source

Why I love commodities

Posted on 11 November 2015 by VRS  |  Email |Print

The popular commentary surrounding commodities is overwhelmingly negative. In the same way that investors could only imagine prices going higher in the midst of the “supercycle” — last decade’s belief that the world had a structural deficit of raw materials — today the general sentiment comprises mostly fear and negativity.
Let’s not forget, however, commodities is the ultimate cyclical asset, prone to dramatic booms and busts. And it has been like that for centuries: think about the tulip mania in the 1630s. But, with the right skills, one can succeed in the commodities sector. Combine a flexible approach to investing, a deep knowledge of the many distinct markets within the commodities sector and an ability to manage risks well, and the opportunity is there………………………………………..Full Article: Source

India to launch Gold Related Schemes Today

Posted on 05 November 2015 by VRS  |  Email |Print

First ever National Gold Coin minted in India with National Emblem of Ashok Chakra engraved to be released among others on the occasion. The Prime Minister Shri Narendra Modi will launch the three Gold related Schemes i.e. Gold Monetisation Scheme (GMS), Gold Sovereign Bond Scheme and the Gold Coin and Bullion Scheme on Thursday, 5th November, 2015 in the national capital.
The salient features of each of the aforesaid scheme are as follows: Gold Monetisation Scheme (GMS), 2015. The GMS will replace the existing Gold Deposit Scheme, 1999. However, the deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely withdraw them………………………………………..Full Article: Source

What the oil and gas industry isn’t telling investors

Posted on 04 November 2015 by VRS  |  Email |Print

Oil prices crashed because of too much supply, but will rebound as production shrinks and demand rises. But what if long-term demand for oil ends up being sharply lower than what the oil industry believes? That is the subject of a new report from The Carbon Tracker Initiative, which looks at a range of scenarios that could blow up oil industry projections for long-term oil demand.
Historically, Carbon Tracker says, energy demand has been driven by population, economic growth, and the efficiency (or inefficiency) of energy-using technologies. Carbon Tracker looks at a couple possible future scenarios in which those parameters are altered, resulting in dramatically lower rates of oil consumption………………………………………..Full Article: Source

Africa should invest in agriculture

Posted on 03 November 2015 by VRS  |  Email |Print

About 65 per cent of the African population lives in rural areas and relies on agriculture as the prime source of income; this is according to John Magnay, head of agriculture finance at Opportunities International.
Opportunity International is a non-governmental organisation working to end global poverty by creating/sustaining 20 million jobs by 2020. The head of agriculture finance called for improved investment in the sector as a step towards ending poverty, creating household disposable incomes and jobs in the region………………………………………..Full Article: Source

Weary commodity investors see end of slump

Posted on 30 October 2015 by VRS  |  Email |Print

After commodity prices tipped over in 1997, it took 21 months to arrest the fall. In 2000-01 it was 13 months. After collapsing along with the global economy in 2008, commodities hit the floor in just eight months. This time, the Bloomberg Commodity Index has been in decline for four years and counting. From its most recent peak in May 2011, the benchmark is off by half and scraping the lowest levels of the 21st century.
Worn-out investors are asking: have commodity prices finally bottomed? “It’s top of mind for anyone looking at the market,” says Norbert Ruecker, head of commodities research at Julius Baer in Zurich………………………………………..Full Article: Source

Why Commodities Are Bad Investments

Posted on 28 October 2015 by VRS  |  Email |Print

Imagine an investment that has roughly the same moneymaking potential as stocks—but that tends to rise when stocks are falling and to fall when stocks are rising, and is a bit less volatile than stocks. In 2004, two Yale University professors published a groundbreaking paper that argued that commodity futures offered precisely that holy grail of investing.
Commodities, wrote Gary Gorton and Geert Rouwenhorst, achieved roughly the same returns as stocks from July 1959 through December 2004. But commodity prices tended to move in the opposite direction of stocks, were less volatile and were particularly profitable during periods of high inflation………………………………………..Full Article: Source

The IEA says oil and gas investment hasn’t been this bad in 20 years

Posted on 27 October 2015 by VRS  |  Email |Print

The global energy industry is running on empty, with low prices sending investments plunging. In a speech at Singapore International Energy Week, Faith Birol, the executive director of the International Energy Agency, said low energy prices had made oil companies extremely hesitant to spend money.
A presentation accompanying his remarks (pdf) shows the extent of this year’s drop in investment, which is expected to be a fifth lower than last year, and fall even further next year: “If it comes true, this will be the first time in two decades we will see oil investments declining for two consecutive years, and may be an indication for future oil markets,” he said, according to Reuters………………………………………..Full Article: Source

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