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Commodities Briefing - Category | Investment more

Commodities Fatigue Kicks In After Biggest Investment in 7 Years

Posted on 08 August 2016 by VRS  |  Email |Print

Investors are growing tired of commodities after plowing in the most money in seven years. Inflows into raw materials slowed to $2.4 billion in July, the least since money was withdrawn in December, Barclays Plc said in a report Thursday. The smaller amount — not unusual for this time of year — took investment to almost $51 billion so far in 2016, the most since 2009.
There’s a good chance raw-materials interest has peaked, as it has largely been driven by investors seeking a haven in precious metals, signaling wider concerns about commodity fundamentals, Barclays said………………………………………..Full Article: Source

Investors pouring money into commodities at the fastest rate since 2009

Posted on 08 August 2016 by VRS  |  Email |Print

Largely driven by a fever for gold, demand for commodities this year is the strongest it has been since the financial crisis, according to Barclays. Total commodity inflows year to date stands at $50.8 billion, marking the strongest January-to-July performance since 2009 — which was only $1 billion higher, said Barclays in an Aug. 4 research note written by Kevin Norrish, head of commodities research.
Those inflows, along with some hefty price gains, have pushed commodity assets under management to $235 billion, a sizable leap from $161 billion seen at the end of 2015………………………………………..Full Article: Source

Investing: The great escape

Posted on 08 August 2016 by VRS  |  Email |Print

Switch into emerging markets is less about potential growth and more to do with stagnation at home. When the world’s biggest fund manager reverses its view on half of the global economy it is time to take notice. That is what BlackRock, manager of $4.6tn for investors and savers, has done this year. Once negative on emerging markets, it has turned into a cheerleader for them.
Sergio Trigo Paz, BlackRock’s head of emerging market fixed income portfolio management, now talks of a “great migration” — a mass movement of big institutional investors away from the stagnant growth and negative interest rates of the developed world, to the resurgent economies and enticing yields of emerging markets………………………………………..Full Article: Source

Investing In Commodity Companies

Posted on 04 August 2016 by VRS  |  Email |Print

A popular way of tapping into the commodities market is via the stock market. Millions of investors contribute to the ebb and flow of the commodities industry (consciously or not) by investing in household names such as Exxon Mobil, Shell, Texaco, BP, Glencore, Rio Tinto and many others.
These companies have more in common than being giants of the stock market and Wall Street darlings (except during commodity slumps) for decades. They are all involved in the extraction of precious material from the ground, as well as its refining and processing into high-value goods with essential uses for daily living………………………………………..Full Article: Source

Why oil bears shouldn’t count on U.S. shale rebound

Posted on 04 August 2016 by VRS  |  Email |Print

Oil market bears argue that rebounding production in U.S. shale regions will add to the global glut of crude, slowing the rebalancing of the market. Don’t be so sure, say skeptics.
Production-rebound proponents argue that the recent rise in U.S. rig counts reflects a new reality in the oil market. In this scenario, the U.S. crude benchmark’s spring rebound, which saw prices push back above $50 a barrel by early June, and a continued fall in production costs were likely to entice previously hard-hit shale producers to reopen closed wells and rejoin the fray………………………………………..Full Article: Source

‘A perfect storm’ is making gold one of the hottest assets on the planet

Posted on 04 August 2016 by VRS  |  Email |Print

“A perfect storm” in markets has left investors scrambling to add gold to their portfolios for protection, according to the World Gold Council. Investors have another prime and relatively safe choice in the government bonds of developed markets, but that has been compromised by “unconventional monetary policy,” the council said in its market update for August.
The yields on developed-market government bonds have trended lower as demand has risen. Sovereign authorities like the European Central Bank are stoking this demand through their bond purchases, which are pushing down yields………………………………………..Full Article: Source

Investment in ETFs has given higher return than government securities

Posted on 04 August 2016 by VRS  |  Email |Print

The Employees’ Provident Fund Organisation (EPFO) started investing in exchange traded funds (ETFs) in August last year and has invested Rs 7,465 crore till June 30, 2016. Government on Wednesday sought to allay fears over investments by EPFO into ETFs, saying that their performance should be viewed over a long period of time and the retirement fund body has already got over 12 per cent return within a year, higher than G-Secs.
“If you are going to invest wisely in a pool of equity then surely there is not much of a risk. We cannot evaluate the performance of equity on the basis of one, two or three months. When we invest in equity, we invest for 20 or 30 years,” Labour Secretary Shankar Aggarwal said………………………………………..Full Article: Source

Why China and Russia are buying so much gold

Posted on 02 August 2016 by VRS  |  Email |Print

The good news for gold enthusiasts is that China and Russia, the world’s No. 1 and No. 3 producers, are catching up to the big industrial countries in stocks of bullion in their official reserves.
The bad news is that, on present “steady-as-she goes” monthly gold accruals, it will take China and Russia — No. 6 and 7 in the world ranking of global gold reserves — about six years to draw level with the fourth- and fifth-placed countries, France and Italy………………………………………..Full Article: Source

Investors in Metals Look Past Gloomy View of the Economy

Posted on 02 August 2016 by VRS  |  Email |Print

Not even the dimming global growth outlook is enough to scare away investors in metals and mining. Money is pouring into industrial metals and the companies that produce them. Those investors seems undeterred by World Bank and International Monetary Fund forecasts of sluggish economies after the U.K.’s decision in June to leave the European Union added to uncertainty.
The enthusiasm for metals comes as expectations mount that policy makers around the world will take stronger action to counter the slowdown. The market also is beginning to look beyond Brexit and turn its attention toward the rising demand for key metals and slower production………………………………………..Full Article: Source

Investors eye commodities funds

Posted on 01 August 2016 by VRS  |  Email |Print

Commodities funds ended June in positive territory up +2.72 percent, according to performance data from eVestment - a rebound for the funds which has persisted throughout 2016. Asset flows have been consistent over the past 9 months as well, suggesting that investors are once again interested in commodities funds even after the wild price swings in commodity prices over the past few years. For investors looking to cash in, being defensively positioned will be key, says Jason Lejonvarn, Managing Director, Mellon Capital Management.
“The main issue with the commodities benchmark is that it forces you to be long all commodities. But some commodities have big drawdowns so we want the opportunity to be able to go long and short,” Lejonvarn tells Opalesque in an interview. Mellon Capital offers a long/short commodities strategy that he says the firm is offering as a way of helping investors avoid some of the historical pitfalls common to commodity funds………………………………………..Full Article: Source

Mind the gap between oil prices and commodity-sector bonds

Posted on 29 July 2016 by VRS  |  Email |Print

A recent divergence between commodity prices and spreads for bonds of companies in the commodity sector is flashing “mind-the-gap” warnings for the market. After a strong advance earlier in the year, oil prices recently plunged to a three-month low, pulling down the shares of energy companies and even weighing on the broader equity benchmarks.
But bonds of companies in energy, metals, mining and steel seem unaffected by oil’s decline — a trend that baffles analysts and suggests that bonds might actually be mispriced………………………………………..Full Article: Source

Here’s Why You Should Own Both Gold and Silver Right Now, Despite Pullback

Posted on 29 July 2016 by VRS  |  Email |Print

Under normal circumstances, when an investment is up double digits in just seven months, it’s a good time to sell. But with gold and silver, up 24% and 41%, respectively, so far this year, this may just be the beginning of a much bigger rally.
Of course, with that big of a jump in a short period of time, either one might be due for a pullback (more on that later). But even if the price of either falls, it will likely just be a short-term consolidation. Both gold and silver still have a long way to run. As we’ve previously explained, it’s not unreasonable to think gold prices could rise by as much as 500%. And, historically, when gold climbs, silver climbs even higher………………………………………..Full Article: Source

The Best Way to Trade Commodities Without Playing the Futures Market

Posted on 29 July 2016 by VRS  |  Email |Print

Investors love having as many options as possible available to them to make a profit. Stock trading software and platforms are a dime a dozen, and option trading has become equally ubiquitous in the everyday investor’s world. However, commodities always seemed just out of reach for all but the wealthy or professional investor.
Futures exchanges carry commodities, which can be traded. Futures are typically used by companies to hedge their product against adverse price movements. For example, a gold mining company may use futures to lock in a specific price for the gold it mined………………………………………..Full Article: Source

Gold Moves Higher After Fed Statement

Posted on 28 July 2016 by VRS  |  Email |Print

Investors who stepped to sidelines ahead of central bank meeting will likely jump back in, strategist says. Gold prices traded higher Wednesday after the Federal Reserve left interest rates unchanged but hinted at the possibility of an increase in the coming months.
Gold for December delivery was recently up 0.9% at $1,339.50 a troy ounce on the Comex division of the New York Mercantile Exchange in electronic trading. Prices settled up 0.5% at $1,334.50, but traded as low as $1,323 after the Fed statement was released………………………………………..Full Article: Source

Buy Commodities; They Shouldn’t Be Tanking

Posted on 27 July 2016 by VRS  |  Email |Print

There’s a new meme going around that claims that we’re heading into a global economic slowdown. It sounds a lot like the other dire warnings that we heard in February, May and most recently in June right after the Brexit vote: “Slowdown! Crash! Recession! Catastrophe!” But the fearmongers were wrong then, and I believe that they’re wrong now.
Granted, the global economy isn’t growing very rapidly. But it is growing — and has defied all expectations of a recession so far because we continue to see high and rising levels of fiscal stimulus from the world’s major economies. That means the United States, China, Japan and very soon even the European Union (I predict)………………………………………..Full Article: Source

Buying Gold Today Could Bring You a Profit of 278%

Posted on 27 July 2016 by VRS  |  Email |Print

The gold price today (Tuesday, July 26) was up 0.37% and trading at $1,321.20 an ounce. Gold prices are up 25% in 2016, putting the metal among the top 10 best-performing assets this year. But that’s just the start of gold’s rally…
In fact, our Money Morning experts recommend buying gold today because we see gains as high as 278% for the precious metal by 2020. Before we reveal our gold price prediction, here’s why the price of gold is rallying this year………………………………………….Full Article: Source

How Investor Appetite for Risk Impacts Precious Metals

Posted on 27 July 2016 by VRS  |  Email |Print

Gold has seen a downward swing and has extended its first back-to-back weekly drop since May. Gold and silver have seen trailing-five-day losses of 0.9% and 2.7%, respectively. The reason behind the fall in the precious metals is the buoyancy of the equity markets and the gains in the US dollar. Both factors have significantly hurt the precious metals.
The holdings of the SPDR Gold Shares (GLD), the world’s largest gold-backed ETF, fell 0.22% to 963.1 tons on Thursday, July 21. The physical demand from the giant gold-consuming markets, India and China, has also been slowing down………………………………………..Full Article: Source

Commodities have some investors saying no

Posted on 26 July 2016 by VRS  |  Email |Print

Institutional investors are wondering whether investing in commodities is worth the trouble, as the asset class has suffered an annualized return of -6.46% in the 10 years through June 30. Indeed, the Bloomberg Commodity index has been negative each month for the past 12 months. The Bloomberg Commodity Total Return index, which includes the return of the collateral, showed a return of -5.48% over the same 10-year period.
Asset owners traditionally have invested in commodities as an inflation hedge and for diversification. While some are maintaining their allocations to protect against unanticipated inflation, the asset class’ volatility and poor returns have other investors moving out………………………………………..Full Article: Source

Is This The News Oil Investors Have Been Waiting For?

Posted on 25 July 2016 by VRS  |  Email |Print

The U.S. Energy Information Administration says that American oil companies are getting closer to balancing capital investment and operating cash flows. This is great news for energy investors, but it doesn’t mean every oil company is worth investing in.
On July 18, the U.S. Energy Information Administration released a report that shows a great trend: U.S. oil companies have begun steadily narrowing the gap between capital investments and operating cash flows………………………………………..Full Article: Source

Gold investors see Trump (and Clinton) as money for jam

Posted on 25 July 2016 by VRS  |  Email |Print

Recent weakness in the gold price has the gold bugs latching on to the next big event that could force the yellow metal higher, the US election. And there is no surprise in knowing that a Donald Trump victory would be a big plus for the price.
Funny thing is though, so too would a Hillary Clinton victory, albeit not to the same extent that a Trump inauguration would serve up. That’s according to ABN Amro analyst Georgette Boele, the winner of the coveted Metal Bulletin precious metals analyst of the year award for 2015………………………………………..Full Article: Source

Investors are kissing gold goodbye - for now

Posted on 22 July 2016 by VRS  |  Email |Print

Gold prices hit a 3-week low as investors decided to plough into riskier asset classes - like stocks. Basically, investors decided they did not need to hide in safe haven asset classes like gold because data shows that the world’s largest economy, the US, is performing pretty well and the Federal Reserve is literally to hike interest rates again later this year.
At one point on Thursday, gold fell to a low of $1,310.70 a troy ounce, a level not seen since June 24. It has since retraced some of those losses but price gains are still under pressure……………………………………….Full Article: Source

This is Goldman Sachs’ best bet in commodities right now

Posted on 22 July 2016 by VRS  |  Email |Print

While investors have been paying close attention to the gold and oil trade, the best bet right now in the commodity space is selling copper, the head of commodities research at Goldman Sachs said Thursday. That’s because there is a lot of supply coming on, Jeff Currie said.
“We like the idea of the revenge of the low-cost player, meaning Peru. Weakness in demand in China — it’s not in the sweet spot,” he said. “Put it all together, this market’s already in a surplus. Prices at $5,000 a ton — target $4,000.”……………………………………….Full Article: Source

Gold retains status as safest asset

Posted on 20 July 2016 by VRS  |  Email |Print

Since the start of this month and in the aftermath of the Brexit vote, the markets have been largely range bound. The British pound went through a brief renaissance in large part because the Bank of England (BoE) held benchmark interest rates unchanged at 0.50 per cent – the markets had been expecting a cut to 0.25 per cent.
Perhaps more surprising was how strongly the bank’s monetary policy committee voted in favour of keeping rates unchanged (8 to 1). This led to a short-term resurgence in the pound, which moved higher against the greenback before finding stiff resistance just below 1.35. Sterling looks to remain entrenched between 1.30 and 1.35 against the greenback………………………………………..Full Article: Source

Commodities reigniting, but buyer beware

Posted on 19 July 2016 by VRS  |  Email |Print

Global resources fund manager Benoit Gervais is adamant the commodities sector is about to be reignited but advises caution while recovery is nascent. Global Resources Fund, saw performance of the fund rise by 38% during the three months to April. As a result, he can see signs of a recovery in the commodities world but would advise caution for now.
A range of major commodity-linked investment indices have also shown a clear upward trajectory in the past three months, encouraging hopes that what has been long-run bear market has turned a corner………………………………………..Full Article: Source

Silver Institute: Silver Investment Sharply Higher In 2016

Posted on 15 July 2016 by VRS  |  Email |Print

Silver investment has soared in 2016 as investors sought the metal as a safe haven and leveraged exposure to the sharp rally in gold, says the Silver Institute. “Investors actively accumulated silver in the first six months of the year, including both the physical and paper markets,” the organization says.
Exchange-traded-product holdings rose by 44.3 million ounces, or 7.2%, to a record high of 662.2 million.
Investors have also raised their net-long positioning in Comex silver futures and options to a record high of 80,522 contracts as of July 5th, after this was 6,282 contracts at the end of 2015, the Silver Institute says. ……………………………………….Full Article: Source

Metals’ Investors Forget About Brexit: Bull Market Continues

Posted on 15 July 2016 by VRS  |  Email |Print

The U.K.’s decision to leave the E.U. hasn’t really scared investors away from industrial metals. The metal complex continues to rally. As we explained in a webinar yesterday, Brexit had little to no impact on the supply and demand dynamics of industrial metals.
On the demand side of the equation, it is — not the U.K or even Europe — that is the world’s biggest consumer of industrial metals. Supply cuts amid low prices and this year’s boost in Chinese demand for industrial metals, thanks to stimulus measures, continue to be the key factors to watch………………………………………..Full Article: Source

The Difference Between Contango and Backwardation

Posted on 14 July 2016 by VRS  |  Email |Print

For equity investors, these terms may sound made up, but they’re required knowledge for commodity investors. Futures trade on curves, so knowing the direction and slope of a curve is a must in order to invest in commodities and be successful.
They are used to track individual commodities, such as oil or gold, and can be plotted on a chart to show the shape of the curve. A standard futures curve will slope up showing the rising price in the commodity over time, while an inverted curve will show the opposite effect………………………………………..Full Article: Source

Why investors should expect the gold price to continue to rise

Posted on 13 July 2016 by VRS  |  Email |Print

Despite the move towards more ‘risk-on’ assets in recent days, investors should continue to expect the gold price to rise, according to Nitesh Shah, commodity strategist at ETF Securities.
Positive economic data from the US, coupled with the view that the Bank of England will boost stock markets, and maybe economic growth with an interest rate cut and perhaps more quantitative easing, has pushed many investors back into equities, with the US S&P 500 hitting an all time high, and the UK FTSE 100 advancing significantly from the lows achieved immediately after the EU referendum result………………………………………..Full Article: Source

How to make money in this lousy market

Posted on 11 July 2016 by VRS  |  Email |Print

Being an investor is tricky these days. There’s broad agreement that the stock market is pricey, the economic recovery is long in the tooth and central banks really can’t do much more to prop up growth.
Hardly anyone is predicting market Armageddon, but this is not the “get rich quick” era. The word on Wall Street is: Prepare for lousy stock and bond returns for years. That doesn’t mean you’ll lose money, but don’t expect to rake in the usual 7% to 8% return on stocks and 3.6% on bonds, according to investment firm Bernstein. Even private equity returns aren’t what they used to be………………………………………..Full Article: Source

What’s Pushing Chinese Investors Into Commodities? (Video)

Posted on 11 July 2016 by VRS  |  Email |Print

Trading volumes for commodities cratered after Chinese regulators took steps in April to deflate a bubble. But speculators aren’t done yet. Bloomberg’s Alexander Kwiatkowski reports on “Trending Business.”.………………………………………Full Article: Source

Japanese Buying Physical Gold, Storing it in Switzerland

Posted on 11 July 2016 by VRS  |  Email |Print

Japanese investors are buying Bullion and storing it in Switzerland because of negative interest rates and fears JPY will depreciate as the government grapples with the heaviest public debt burden in the developed world, according reports.
The number of buyers jumped 62% in 1-H of Y 2016 Vs 2-H of Y 2015 the data show. The Bank of Japan (BOJ) has embarked on unprecedented bond buying to bolster the economy, prompting speculation that JPY could plunge if stimulus efforts fail………………………………………..Full Article: Source

Perils of investing in commodities like gold & oil

Posted on 07 July 2016 by VRS  |  Email |Print

In order to help investors become better at navigating the stock market, Jim Cramer revealed some of the biggest mistakes he has made in over 30 years of investing. “Frankly, there are so many mistakes here that it might take a bit to explain them all,” the “Mad Money” host said.
He learned that when it comes to investing in commodity stocks, investors must know that it doesn’t matter which ones they pick — like going for a better balance sheet or higher growth — if the underlying commodity is hit. If that happens, they will all go lower………………………………………..Full Article: Source

Investors Expand Their Appetite for Commodities

Posted on 06 July 2016 by VRS  |  Email |Print

Desire for commodities-based funds is expanding beyond just oil and gold. In recent months, investors also have developed a healthy appetite for funds focused on agricultural products and industrial materials. Indeed, the entire commodities complex has become a magnet for fund investors’ money, according to new research.
In the first four months of this year, investors poured $38 billion into commodities exchange-traded funds and other commodities investment funds globally, according to a recent report from Barclays. That compares with annual outflows of as much as $83.2 billion in each of the prior three years, through 2015………………………………………..Full Article: Source

CITI: Oil is a better safe-haven option than gold

Posted on 06 July 2016 by VRS  |  Email |Print

One of the more popular debates among economists revolves around this question: What’s the point of gold? Some think it doesn’t serve any purpose, and therefore has no intrinsic value. Others claim that hoarding gold is a legitimate way to safely store wealth in preparation for economic troubles.
As such, a Citi research team led by Jonathan Stubbs argued that, overall, black gold — aka oil — is probably a better bet than gold. “Many investors see gold as the ultimate hedge. We see a strong case for owning ‘black gold’ over gold for those truly looking for a two-way, rather than one-way, hedge against real world risks,” the team recently wrote in a note to clients………………………………………..Full Article: Source

Investors hold the gold as risk-appetite goes cold

Posted on 05 July 2016 by VRS  |  Email |Print

The amount of cash invested in gold funds has jumped by one-third since the beginning of the year, as investors become more and more desperate to squirrel their money away in safe havens.
Data from Bloomberg showed holdings in bullion-backed exchange-traded funds (ETFs) swelled to 1,959 tonnes at the end of June, up from 1,458 at the beginning of the year, with a flurry of new investments off the back of the UK’s decision to leave the EU………………………………………..Full Article: Source

Precious metals: Safe haven in unstable times

Posted on 01 July 2016 by VRS  |  Email |Print

Economic upheaval. Monetary shenanigans. Cashless society and computer hackers. The reasons to own physical precious metals are legion, in light of the truism that governments and their paper currencies rise and fall, but gold always has intrinsic and universal value.
Individuals have long chosen to own gold coins and other precious metals because it serves as a storehouse of wealth and a solid, tangible investment………………………………………..Full Article: Source

Faber Says Own Gold, Prepare for QE4 as Easing Follows Brexit

Posted on 30 June 2016 by VRS  |  Email |Print

Gold’s investment case has been strengthened by the U.K.’s vote to quit the European Union as the fallout may spur the world’s central banks to step up easing, hurting currencies and favoring bullion, according to Marc Faber, publisher of the Gloom, Boom & Doom Report.
The U.S. Federal Reserve may even embark on a fourth round of quantitative easing, or QE4, Faber said in an interview on Bloomberg Television on Wednesday, adding that he typically buys bullion every month. While he also likes gold shares, they need to correct first after recent gains, he said……………………………………….Full Article: Source

Gold’s upside from here is limited, says Goldman’s Currie

Posted on 28 June 2016 by VRS  |  Email |Print

Investors are flocking to gold as a safe haven trade after the U.K.’s vote to leave the European Union, but the upside from here is rather limited, the global head of commodities research at Goldman Sachs said. “One of the key reasons for that is the market is incredibly long. We’ve also seen a sharp decline in interest rates, particularly U.S. Treasurys, which suggests that we probably are topping out here,” Jeffrey Currie said.
Goldman Sachs upped its gold price forecast to $1,300 on Friday after Thursday’s Brexit vote sent the price soaring. The precious metal was trading around $1,330 in afternoon trading Monday………………………………………..Full Article: Source

Investors pouring billions into passively managed funds

Posted on 28 June 2016 by VRS  |  Email |Print

Cheap, flexible and tax-efficient. The three big advantages of passively managed exchange-traded funds continue to drive the migration of investment assets from actively managed mutual funds to ETFs.
Many industry observers expected that increased market volatility would push investors back to active managers, but the latest asset-flow stats from research firm Morningstar suggest not. In May, $18.7 billion flowed out of actively managed U.S. equity funds and $8.1 billion flowed into passively managed ones that track an index — largely ETFs………………………………………..Full Article: Source

Hedge Funds Win World-Beating Rally With Record Gold Holdings

Posted on 27 June 2016 by VRS  |  Email |Print

Unlike most of the world, gold investors got it right when it came time to betting on the Brexit vote. They were rewarded with a world-beating rally. Hedge funds boosted their bets on price gains for bullion to an all-time high just two days before U.K. voters took to the polls and decided to leave the European Union, sending global markets roiling.
Gold futures climbed to a two-year high after the referendum. The metal’s wild ride isn’t over yet. Prices could jump another 7.7 percent by the end of the year, a Bloomberg survey showed………………………………………..Full Article: Source

Why Aluminum Is A Suitable Commodity For Long-Term Investors

Posted on 27 June 2016 by VRS  |  Email |Print

The development of the global automotive industry has a positive impact on aluminum prices. The current perspectives of the global automotive industry assume a significant growth in aluminum demand in the mid-term. The decline in aluminum production and its warehouse levels are positive catalysts for the growth of aluminum prices.
One of the features of the aluminum market is that the biggest share of aluminum imports belongs to the United States: it amounted to 10.8% of total imports in 2015. The reason is that aluminum is mainly used in the construction and automotive industries, and their activities are spread all over the world………………………………………..Full Article: Source

Investors Map Post-Brexit Strategies Amid Global Market Upheaval

Posted on 27 June 2016 by VRS  |  Email |Print

Britain’s vote to leave the European Union almost a quarter century after its creation with the Maastricht Treaty left global markets in disarray Friday. Today, investors start to figure out the way forward.
“Ultimately, we have no experience in what will happen next,” Glen Capelo, managing director at Mischler Financial Group Inc., who has spent the intervening years on various trading desks, said in a note to clients. “Twenty-three years of positions may now need to be unwound,” he added in an e-mail………………………………………..Full Article: Source

Commodities Players Are Set Up for Market-Crushing Gains

Posted on 24 June 2016 by VRS  |  Email |Print

The resource sector’s devastating five-year bear market saw the Bloomberg Commodity Index drop 60% from its 2011 peak. Naturally, that crushed the world’s dominant resource producers; the top 40 companies saw their market caps shrink by $27 billion in 2015 alone.
All along, these producers have had to clean house, slash spending, reduce headcount, and rationalize every last cent they did spend as production crashed. It was the law of the jungle in action, survival of the fittest. Plenty of producers went straight out of business. It wasn’t easy to watch, and it was even tougher to invest in………………………………………..Full Article: Source

Wells Fargo Thinks Commodities are Still a Good Catch

Posted on 23 June 2016 by VRS  |  Email |Print

The big run by commodities is lifting prices for major benchmarks to new highs in 2016. But advisors who are wary at this point of putting new clients’ money into funds – either broad-based or more focused on futures like gold and oil – might find reason for relief by taking a longer-term view of such historically volatile markets.
“Advisors who are working with clients on a more strategic basis should be able to allocate to commodities with more confidence now,” says John LaForge, head of real asset strategy at Wells Fargo’s Investment Institute………………………………………..Full Article: Source

Is silver next for Chinese speculative investors?

Posted on 22 June 2016 by VRS  |  Email |Print

The roulette game all started in the fall of 2014, about two years after Chairman Xi Jinping came to power and became the general secretary of the Communist Party of China. Xi Jinping had campaigned for socialist economic reform, including a sweeping anti-corruption drive, cutting excess production capacity, tightening of housing credit, and clamping down on gaming in Macau.
Public feedback was initially positive. However, largely as a result of those policies, Beijing was facing an increasingly grim economic growth outlook which was the worst in more than two decades*. Manufacturing activity in China slowed along with the global economy and the construction sector stagnated………………………………………..Full Article: Source

Uncertainties of Brexit making gold attractive as safe asset

Posted on 20 June 2016 by VRS  |  Email |Print

The outcome of Thursday’s Brexit referendum will chart the price of gold in the next six to 12 months, but, in the longer term, investors and analysts agree that bullion is an asset to hold. The immediate trigger for any gold price moves will come in the wake of the referendum, which could see Britain leave the European Union.
Robin Tsui, exchange traded fund (ETF) gold specialist of Asia-Pacific at State Street Global Advisors, said: “If Britain does decide to vote for an exit, this would trigger more uncertainties. There are also risks that other countries may follow Britain to vote for an exit………………………………………..Full Article: Source

AfDB to invest $24b in agriculture

Posted on 20 June 2016 by VRS  |  Email |Print

African Development Bank(AfDB) President, DrAkinwumiAdesina said the bank plans to invest about $24 billion (or $2.4 billion yearly) over the next 10 years to help drive the agricultural transformation inAfrica.
This is, he said, represents a 400 per cent increase in financing to the agricultural sector by the bank. He spoke at the Seventh African Agricultural Science Week and FARA General Assembly, in Kigali, Rwanda. He lamented that Africa spends $35 billion on importing food. This, according to him, is projected to grow to $110 billion by 2025………………………………………..Full Article: Source

These two commodities will get a boost from Brexit

Posted on 17 June 2016 by VRS  |  Email |Print

Most investors anticipate a global selloff and flight to safety in the event of a British exit from the European Union, but two commodities are expected to rally. The cocoa and U.K. natural-gas markets are two of the last remaining commodities contracts still denominated in sterling. Most commodities, from oil to copper to gold, are priced in dollars.
If Britain votes to leave the EU, the pound is expected to plummet, boosting these commodities by making them cheaper in other currencies. A vote to exit the EU would cause a sharp rally in the London-traded cocoa contract, said Max Goettler, a trader at Cocoanect in Rotterdam………………………………………..Full Article: Source

Commodities making a comeback as best performing asset class

Posted on 16 June 2016 by VRS  |  Email |Print

Commodities have performed strongly so far this year, returning 14.0%, outperforming Bonds at 6.6% and Equities at 0.5%. Nitesh Shah, Director – Commodities Strategist, ETF Securities, identifies an improved outlook for global growth, and signs of a commodity supply deficit, as key stimulants of the comeback.
“Sustained central bank interest in keeping interest rates low in an effort to stimulate the economy is providing further support for commodities. And investor sentiment has come off near decade lows as investor realise that commodity oversupply is ending in many areas.”……………………………………….Full Article: Source

China’s Investors Shifting to Global Commodities

Posted on 16 June 2016 by VRS  |  Email |Print

China’s cash-rich investors are increasingly looking to trade on offshore commodities markets after a regulatory crackdown and amid fears over the depreciation of the yuan, according to Marex Spectron Group.
“We’re definitely seeing a tumultuous rise in retail-type or investor-type trading,” Simon van den Born, the broker’s global head of metals, said Wednesday at a press briefing in Hong Kong. Revenues from China have doubled this year, offsetting a slump of about 30 percent in traditional business from industrial and corporate clients, he said………………………………………..Full Article: Source

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