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Commodities Briefing - Category | Investment more

Investors pile into quant funds

Posted on 13 June 2016 by VRS  |  Email |Print

Investors may be fleeing hedge funds in droves but they are still allocating money to technology-driven strategies, despite more than a year of lacklustre performance. The move suggests investors are looking to position themselves for increased market swings or a possible crash as “quants”, which use computer algorithms to predict market moves, are not correlated to other strategies.
The number of institutional investors who allocated funds to the most popular sub-strategy of quant known as commodity-trading advisers, or CTAs, hit a record of 1,067 in 2015, an addition of 50 from the previous year, according to the data provider Preqin………………………………………..Full Article: Source

Billionaire Investors Back A Gold Price Rally In 2016

Posted on 10 June 2016 by VRS  |  Email |Print

It wasn’t so long ago that some of the more famous investor gurus were shrugging off gold as nothing more than shiny trinkets with no investment value. They were wrong. This safe haven is back, the recovery is clear, and there have been some very big changes of heart.
The biggest gold producers in the world have seen their share prices double this year. Not only are gold prices soaring, but producers are cutting costs and slimming down debt as they pave the way for gold to return to the top of the favored commodities list………………………………………..Full Article: Source

The Big Bet of 2016: Joining George Soros in Gold

Posted on 10 June 2016 by VRS  |  Email |Print

Investors pile into the metal, up 20% this year, and mining stocks, which have vaulted even more. There is a new gold rush on. Abating expectations for Federal Reserve rate increases have fueled a fresh boom in everything that glitters, from gold futures to the shares of gold-mining firms to exchange-traded funds that give traders a way to bet on gold’s daily rise and fall.
Front-month Comex gold futures have been among the best-performing major asset classes in financial markets this year, up about 20% as of Thursday………………………………………..Full Article: Source

How Are Gold Miners Placed in a Volatile Gold Price Environment?

Posted on 09 June 2016 by VRS  |  Email |Print

Gold investors became worried after the release of the Federal Reserve’s April minutes, which were more hawkish than expected. This put the summer rate hike back on the table, causing gold to lose some of its sheen. Gold lost 5.1% in 11 trading sessions after the minutes were released.
The Market was also awaiting the May jobs data to get a sense of the direction of Fed’s monetary policy. The data came in markedly below expectations, lowering the chances of a Fed rate hike in June………………………………………..Full Article: Source

Commodities making a comeback, but investors remain wary

Posted on 08 June 2016 by VRS  |  Email |Print

After years of disappointing returns, commodities have now entered into a bull market and become the best-performing asset class this year. Prices are expected to stay high in the second half of the year with tightening physical and supply fundamentals across the complex, said analysts.
Yet, many investors remain wary of investing in the asset class and are still underweight on commodities, said a fund manager. The strong performance of commodities, fuelled by higher crude oil and gold prices, has outpaced those of equities and bonds………………………………………..Full Article: Source

Rebound in distressed debt boosts investors

Posted on 06 June 2016 by VRS  |  Email |Print

Robust gains mainly reflects valuations for energy bonds rebounding with a higher oil price. Distressed debt investors have experienced their best returns since the financial crisis, providing a rare boost for specialist players after disappointing results in recent years.
In the wake of two straight years of 20 per cent plus losses, this highly volatile style of investing has rebounded strongly, with gains between March and May approaching 30 per cent, the best three-month stretch since the US emerged from recession in July 2009………………………………………..Full Article: Source

Investor Interest in Gold Waning With Fed Rate Increase Looming

Posted on 03 June 2016 by VRS  |  Email |Print

There’s one more indicator signaling investors are beginning to lose interest in gold again. Open interest, a tally of outstanding contracts in futures on the Comex in New York, fell 1.5 percent on Wednesday to the lowest since April 8. In the week ended May 24, money managers cut their net-long positions in gold by 26 percent, the most this year.
In the U.S., where the Federal Reserve has been monitoring signs of economic resilience before deciding on the next increase in borrowing costs, filings for jobless benefits released Thursday fell for a third straight week………………………………………..Full Article: Source

Commodity Hedge Funds Get $5 Billion Embrace on Oil Gain

Posted on 01 June 2016 by VRS  |  Email |Print

The rally in oil has given a fillip to long-suffering commodities hedge funds. After four years of hemorrhaging cash and clients, managers are once again making money and winning back investors.
About $5 billion has coursed into the funds in 2016, with the first quarter seeing the biggest inflows since 2009, according to data compiled by eVestment. Investors are being drawn by gains such as the more than 18 percent increase reported in a letter to clients by Stuart Zimmer’s ZP Energy Fund in New York and the 12.7 percent posted by oil trader Pierre Andurand’s $1.1 billion Commodities Master Fund in London……………………………………….Full Article: Source

Forget gold, oil is the star investment right now!

Posted on 01 June 2016 by VRS  |  Email |Print

Since the turn of the year, the price of gold has risen by around 18%. As a result, many investors are highly optimistic about the prospects for the precious metal and it has clearly been a strong performer in 2016.
A key reason for this is the fact that US interest rates have risen at a much slower pace than expected. When the Federal Reserve increased interest rates in December, it was expected that there would be as many as four rate rises this year, but with none by May, this figure is unlikely to be met. As such, interest-producing assets have been less enticing than was anticipated and the price of gold has risen………………………………………..Full Article: Source

Two Lessons on China and Commodities From Legendary Investor Jim Rogers

Posted on 01 June 2016 by VRS  |  Email |Print

Investor Jim Rogers’ comments from years past are still valid in today’s markets. Maybe not tomorrow, but eventually, China will devalue its currency. And prices for uranium and coal and other undervalued commodities will recover. That’s because, in the end, markets always win.
That’s the application of some of the sage advice from the books of legendary investor Jim Rogers. Rogers co-founded the Quantum Fund, one of the world’s most successful hedge funds, in the early 1970’s. He quit full-time investing in 1980 after generating returns of 4,200% over 10 years………………………………………..Full Article: Source

Gold Price Forecasts Revised Higher – Citi Says “Buy the Dip”

Posted on 31 May 2016 by VRS  |  Email |Print

Gold price forecasts have been revised higher in recent weeks and Citi became the latest bank to revise higher their projections for gold, despite the recent weakness in the price. Citi Research, the research division of one of the world’s biggest banks, raised its gold price forecast to an average $1,280 in the current quarter, $1,300 in the July-September period, and $1,250 in the final three months of the year.
Citi said that despite the recent gold pullback, now is an “opportune moment” for buyers and now is the time to invest in gold………………………………………..Full Article: Source

UBS: Investors Have Opportunity To Buy Gold At ‘More Attractive Levels’

Posted on 30 May 2016 by VRS  |  Email |Print

UBS says any further weakness in gold may be a buying opportunity. The metal has fallen some $90 an ounce from its recent highs, leaving it not far from $1,200 psychological support.
The bank says it’s “understandable” that some investors might be hesitant to buy into weakness, considering recent gains in the U.S. dollar, equities back near the highs for the year, rising 10-year Treasury yields and financial markets pricing in an increased likelihood of Federal Reserve tightening since the start of last week……………………………………….Full Article: Source

Should you start hoarding gold? Some say China’s gold ambitions mean you should keep some stashed at home

Posted on 27 May 2016 by VRS  |  Email |Print

China’s decision to buy its second gold storage vault in London last week was another step towards total dominance of the market. The vault is in a secret location and was bought by Chinese state-owned bank ICBC Standard Bank from Barclays. It could store $90bn of gold at today’s prices, and follows the purchase of a lease on another vault in the capital earlier this year from Deutsche Bank.
London has been a hub for metals investment for hundreds of years, but times have changed and the big banks are pulling back from trading them. Now China is pushing into the gold market in a big way. The reasons why are unclear, and gold continues to spawn more conspiracy theories than the moon landing, but what is known is that China has been amassing the yellow metal at a rapid pace over the last decade………………………………………..Full Article: Source

Banks see worst Q1 in a decade in commodities

Posted on 25 May 2016 by VRS  |  Email |Print

Commodities revenue at the largest banks had the worst start to a year in more than a decade amid a pullback in financing of raw materials. Income at Goldman Sachs Group, Morgan Stanley and 10 other top banks slid by a combined 40 per cent year on year in the three months to March to US$1.1 billion (S$1.5 billion), according to analytics firm Coalition, which tracks commodities activities, including power and gas, oil, metals, coal and agriculture.
Revenue shrank as banks scaled back hedging and financing deals and their hedge-fund clients pulled out of commodities, said Mr Amrit Shahani, a research director at Coalition………………………………………..Full Article: Source

Is gold THE investment of 2016?

Posted on 25 May 2016 by VRS  |  Email |Print

Suddenly there’s a real buzz about gold. There’s something about the ancient precious metal that taps deep into human psychology, and it doesn’t take much to get gold bugs flying again. There’s something about George Soros that taps deep into investor psychology as well. This is the man who famously broke the Bank of England in 1992, and holds an estimated $24bn fortune, which always commands attention.
Soros recently bought bullish options contracts on 1.05m shares in the SPDR Gold Trust, that tracks the price of bullion, and took a $264m stake in the Barrick Gold Corp. So why the sudden razzle-dazzle?……………………………………….Full Article: Source

Defaults Have Already Spread Outside Commodities

Posted on 24 May 2016 by VRS  |  Email |Print

Bond investors appear to have placed their faith in commodities exceptionalism, with many positing that the recent pick-up in U.S. default rates will defy historical trends and remain confined to that industry.
New research from Deutsche Bank AG pours cold water on that idea, arguing that there are already signs of contagion in junk-rated debt outside of the commodities space. A look at previous peaks in default rates shows the potential for more pervasive corporate stress………………………………………..Full Article: Source

Gold Fever: Why Investors Rush to Buy Gold

Posted on 23 May 2016 by VRS  |  Email |Print

Demand for gold rose by 21 percent in the first quarter of 2016. Recently, billionaire George Soros invested nearly $390 in gold stocks, having decreased investments in other assets. Shortly after, large hedge-funds followed the example of the legendary US investor.
Between January and March 2016, Soros Fund Management established by George Soros increased investments in gold market assets, according to the company’s data. Particularly, the fund bought shares worth $264 million in Canada’s company Barrick Gold, one of the world’s leading gold producers. It also bought an option for nearly 1.05 million shares ($123 million) in SPDR Gold Trust, the world’s biggest gold exchange fund………………………………………..Full Article: Source

Why gold makes sense for investors

Posted on 23 May 2016 by VRS  |  Email |Print

The price of gold rose more in the first quarter of 2016 than during any quarter since the third quarter of 1986. As a result, should advisers be educating their clients about including this rather unique commodity as part of their investing tool box, particularly now that a variety of gold ETFs are so readily available?
Gold doesn’t pay a dividend or yield interest, nor does it convey partial ownership of an enterprise that may increase in value. However, there are times when gold can play an important role in a diversified portfolio. It can serve as a leading indicator of future inflation. It can be a defensive asset to hold during periods of economic and market anxiety………………………………………..Full Article: Source

Investor sentiment on commodities turns positive: Lloyds

Posted on 19 May 2016 by VRS  |  Email |Print

Investors have turned positive towards commodities for the first time since November, according to the latest Lloyds Private Banking survey. The monthly Lloyds Bank Private Banking Investor Sentiment index measures net investor sentiment towards an asset class, showing the difference between those with a positive and a negative outlook for the next six months.
Sentiment towards the sector currently stands at 3.24%, an increase of more than 8 percentage points (the biggest rise this month) from -4.8% in April. Emerging markets also saw a change in confidence from a negative -2.42% last month to a positive attitude of 1.97% for May………………………………………..Full Article: Source

Gold price volatility to continue as investor interest rises

Posted on 19 May 2016 by VRS  |  Email |Print

Gold ’s safe-haven allure continues to attract more investors, but one veteran precious metals strategist warns that the higher interest makes the metal subject to price volatility. “Large open interest may add to volatile moves as headlines may influence prices and as many open orders are held back for now,” said George Gero, managing director for RBC Wealth Management.
He also commented on billionaire investor George Soros’ latest Securities Exchange Commission filings, which showed that the hedge fund manager held SPDR Gold Trust shares worth $123 million as of the end of Q1. “Today’s figures were helping gold traders somewhat and more fund managers like Soros are allocating to gold again,” Gero added………………………………………..Full Article: Source

Gold Investment Surge ‘Marks Major Price Low’

Posted on 18 May 2016 by VRS  |  Email |Print

Gold investment prices slipped to 3-session lows beneath $1270 per ounce in London trade Tuesday, retreating 1.4% from yesterday’s 1-week high as Western equities failed to follow China’s stock market higher. Silver also erased Monday’s pop higher, trading unchanged in Dollar terms from the end of last week at $17.13 per ounce.
“Major lows achieved across the complex,” says a new chart book from the technical analysis team at French investment and London bullion bank Societe Generale – calling December 2015’s gold price low a “major bottom” at $1045 per ounce. “Short term though, a shaky configuration [is] expected.”……………………………………….Full Article: Source

China’s biggest bank just bought a vault that holds 2,000 tons of gold in a secret location near London

Posted on 18 May 2016 by VRS  |  Email |Print

ICBC Standard Bank Plc expanded its push into London’s precious metals market by agreeing to buy one of Europe’s largest vaults from Barclays Plc. ICBC Standard, formed last year after Industrial and Commercial Bank of China Ltd. — China’s biggest bank — bought a controlling stake in Standard Bank Plc’s global markets business, expects the purchase of the vaulting business and related contracts to be completed in July.
No financial details were given. About US$5 trillion of transactions are cleared every year in London’s gold market, which Barclays is exiting as it pulls out of precious metals………………………………………..Full Article: Source

Palladium left out of precious metals rally; investors shy away

Posted on 18 May 2016 by VRS  |  Email |Print

Investor appetite for palladium-backed exchange-traded funds is failing to pick up after a dismal 2015, pointing to another difficult year for the metal despite the prospect of a deepening supply deficit.
Market watchers are predicting the market shortfall for palladium will grow this year as mine output abates and demand from carmakers picks up. However, its prices have lagged the rest of the precious metals complex this year, rising 5 percent versus a 20 percent jump in gold and 17 percent climb in platinum………………………………………..Full Article: Source

Ag prices soar: Commodities get mojo back

Posted on 13 May 2016 by VRS  |  Email |Print

Investors have been harvesting big gains in the past month from agricultural commodities, and some of the futures, such as sugar and soybeans, were near levels this week not seen in 18 months or more.
Latin America weather woes and the Brazilian government turmoil are playing a major role in the month-long ag rally. Brazil’s real has strengthened against the dollar, encouraging producers of traditional export products, such as coffee and sugar, to sell supplies at home………………………………………..Full Article: Source

Africa Investors Look East as Commodity-Driven Boom Withers

Posted on 13 May 2016 by VRS  |  Email |Print

Investors targeting Africa are looking east, as depressed commodity prices and slowing growth in China put the brakes on a two-decade growth surge in the world’s poorest continent. Kenya, Tanzania and host Rwanda are the countries in vogue at the World Economic Forum’s annual confab of Africa’s business and political leaders that began Wednesday in Kigali.
All three economies should expand at least 6 percent this year, double the sub-Saharan Africa average, according to the International Monetary Fund. Growth in Ethiopia, the investors’ darling at last year’s WEF Africa summit, is set to slow to 4.5 percent this year, from 10.2 percent in 2015, as a drought curbs farm output………………………………………..Full Article: Source

Lithium - the commodity winner you can’t buy: Russell

Posted on 13 May 2016 by VRS  |  Email |Print

Lithium is the hottest commodity around these days, enjoying spectacular price gains and a blue-sky outlook that’s the envy of the natural resource sector. There’s just one problem though. It’s extremely difficult, and somewhat risky, to gain exposure to the sector.
Lithium isn’t traded on any major exchange, and doesn’t have futures contracts or swaps, thereby cutting out one of the main ways investors gain exposure to a commodity. This means the best way to access lithium’s story is through equities, but this isn’t as straightforward as it may seem………………………………………..Full Article: Source

Hedge-Fund Investors Called Commodities Markets’ Rebound: Chart

Posted on 13 May 2016 by VRS  |  Email |Print

Hedge-fund investors rushed into commodities money pools in the first quarter and the bet’s paying off. They allocated about $4 billion to the strategy in the period, benefiting as the pools returned 6 percent in the first four months.……………………………………….Full Article: Source

Blink and you’ll miss it: China’s two-month commodities bubble

Posted on 12 May 2016 by VRS  |  Email |Print

Chinese investors are known for their ability to drive markets to eye-popping extremes, resulting in some of the most spectacular booms and busts of recent times. The latest frenzy has been a bet on China’s economic recovery expressed through trading the commodities futures market, but how does it compare with history’s most-famous bubbles?
If the charts are anything to go by, the latest rage in trading commodities futures could already be over, after just two months that saw futures pricing in everything from iron ore to eggs and cotton rise as much as 50 per cent. ……………………………………….Full Article: Source

From bull to bear market: China commodities shakeout hits investors, threatens mills

Posted on 12 May 2016 by VRS  |  Email |Print

Only a month ago, Chinese commodities prices were skyrocketing, led by a stampede of speculative investors betting on early signs of recovery in the world’s second-biggest economy. Now, not only has the bubble been popped but a dive has left steel and iron futures 23 per cent off their April peaks and in bear market territory.
This in turn threatens to put the brakes on the restart of steel plants that became profitable as prices rose, as well as drive investors to other markets. When prices shot up in April, Chinese commodities exchanges moved quickly to raise trading fees and push speculators to dial down trading positions, anxious to ensure there was no repeat of the boom and bust Chinese stocks suffered last year………………………………………..Full Article: Source

Oil and Gas Drag Down Canada Investment Plans for Second Year

Posted on 11 May 2016 by VRS  |  Email |Print

Oil and gas companies hurt by low prices are leading a drop in Canadian investment plans for a second year, a government survey found. Planned spending by companies and governments on non-residential construction and machinery and equipment will fall.
4.4 percent in 2016 to C$241.6 billion, Statistics Canada said Tuesday from Ottawa. The survey backs up recent statements from Bank of Canada policy makers, who say the country is undergoing a complex adjustment as an oil-price shock and slower global demand hamper growth………………………………………..Full Article: Source

Is Gold a Strong Investment Through the Rest of 2016?

Posted on 11 May 2016 by VRS  |  Email |Print

There’s no doubt that gold has been an incredible investment throughout the year 2016. Since January first, the price of the precious metal has already gained by around 18%. Now the big question is, “Will gold remain as a strong investment throughout the rest of the year? In my opinion, the answer is yes. Today, we’ll talk about why.
Gold, like any other commodity is heavily dependent on the law of supply and demand. When supplies are low and demand is high, we tend to see gains in the price of gold. Adversely, when supplies are high and demand is low, we will likely see declines in the value of the commodity………………………………………..Full Article: Source

Gold investors return to funds as prices drop from one-year high

Posted on 11 May 2016 by VRS  |  Email |Print

Gold investors are piling back into exchange-traded products. While prices are hovering near the lowest in more than a week, holdings in bullion-backed funds rose 50 metric tons since April 25. That’s the biggest 10-day increase and longest run in two months.
A surge in purchases that helped boost bullion prices earlier this year ran out of steam in April as holdings fell 0.2%, the first monthly decline since December. After climbing to the highest in more than a year, prices retreated in the past week as the dollar gained on speculation the Federal Reserve remains on track to raise interest rates this year………………………………………..Full Article: Source

Should I Ever Invest in Gold?

Posted on 10 May 2016 by VRS  |  Email |Print

There are two schools of thought regarding gold: One camp advocates owning gold as a hedge against inflation, a weakening dollar, and stock market disaster. The other camp, which includes Warren Buffett, argues the yellow metal has no role in a modern portfolio.
“Gold is always an interesting topic to discuss with clients and other advisers,” says Joe Heider, founder of Cirrus Wealth Management in Cleveland. He shares Buffett’s view that your investment dollars are put to better use in other assets. “Gold has no intrinsic value other than for jewelry and some industrial use, and it produces no income,” says Heider………………………………………..Full Article: Source

Asset class pushes higher on sustained demand from investors

Posted on 09 May 2016 by VRS  |  Email |Print

Commodities markets were awash in green at the end of the week despite another small gain for the US dollar, as data showed that investors were continuing to pile into the asset class. Gold was among the strongest performers, with the June 2016 COMEX contract up by 1.71% to $1,294.00/oz. by the closing bell.
Commodity funds had another week of inflows, the 17th so far this year, pushing year-to-date inflows to almost $6bn, analysts at Bank of America-Merrill Lynch said citing figures from EPFR Global………………………………………..Full Article: Source

Gold is a useful portfolio diversifier

Posted on 09 May 2016 by VRS  |  Email |Print

Gold tends to perform well during periods of declining confidence. So, while you are framing an appropriate portfolio, remember that gold is an essential diversification tool. Investors have been worried about the volatility in equity markets over the past one year.
The first two months of 2016 also saw sharp correction in equities, and then a sharp pullback in March. Asset markets have been volatile and often bring into context the financial crisis of 2008, when equities were badly hit. Gold bucked the trend, and did well during this period. It also did well this year when equities were struggling………………………………………..Full Article: Source

Junk investors scramble after commodities rally

Posted on 06 May 2016 by VRS  |  Email |Print

The commodities rally has flummoxed junk-bond investors who bet on the sector staying soft this year, hurting returns at dozens of funds that did not foresee the rebound in energy and metals.
Oil, mining, steel and gas bonds have delivered whopping sector returns this year up to 27%, wrong-footing those who moved underweight after high-yield lost almost 5% in 2015. Investors who were heavy in commodities last year, as the sector was pummeled, but then got out before the bounce-back in recent months, have now been hit coming and going………………………………………..Full Article: Source

Investors – and Donald Trump – are loving gold. How long will the rush last?

Posted on 06 May 2016 by VRS  |  Email |Print

The gold price has soared alongside the fortunes of Donald Trump, a big fan of the precious metal. How long can the new gold rush last? Two phenomena that pundits said would almost certainly never happen have taken place this week: Donald Trump clinched the Republican presidential nomination, and the price of gold capped a 15-month rally by soaring above $1,300 an ounce.
Coincidence? Logic would suggest so. But then, this is anything but a logical market environment or presidential electoral cycle. And there are, in fact, several ways in which gold is the ultimate Trumpian investment……………………………………….Full Article: Source

Investing in Gold Through ETFs (Video)

Posted on 06 May 2016 by VRS  |  Email |Print

Greg King, chief executive officer at Rex Shares, discusses the price of gold, investing through ETFs and the outlook for the commodity. Last month REX launched the REX Gold Hedged S&P 500 ETF and the REX Gold Hedged FTSE Emerging Markets ETF . Both exchange-traded funds enable investors to diversify their portfolios by accessing exposure to the precious metal without reducing equity allocations.
The exchange traded funds also can help protect against the risk of a weakening U.S. dollar through exposure to the yellow metal, according to King. King speaks to Bloomberg’s Vonnie Quinn on “Bloomberg Markets.”……………………………………….Full Article: Source

How to Invest in Bottoming Commodities

Posted on 05 May 2016 by VRS  |  Email |Print

After falling to multi-year and in some cases, multi-decade lows, it appears that commodity markets might be bottoming. Barclays says the low the Bloomberg Commodity index put in during January’s selloff matched the all-time lows last hit in 1999, and since then the index has risen.
Investor interest is back in the commodity sector as assets under management for the precious metals, base metals, energy and agriculture markets are rising so far for 2016. That’s lifted values, with prices for commodities as disparate as crude oil, iron ore, gasoline, soybeans, coffee and gold all up for the year, too………………………………………..Full Article: Source

Investing after commodities super-cycle

Posted on 05 May 2016 by VRS  |  Email |Print

According to conventional wisdom, the challenges of global commodities can be attributed to China’s slowdown. Advanced economies are not immune. In the US, just two commodity-related sectors — oil and gas, as well as metals and steel — accounted for more than half of the defaults in 2015.
And yet, the rebound of most commodity price indexes in the first quarter suggests different realities. From iron ore to aluminum, most commodities have rallied. Silver is surging. And in China policy authorities have begun to clamp down the frenzy in the commodities markets. Conventional wisdom is off, once again. But why?……………………………………….Full Article: Source

Myths about investing in ETFs

Posted on 05 May 2016 by VRS  |  Email |Print

Exchange Traded Funds (ETFs) are one of the top investment trends of the last few years. We are seeing a growing number of investors buying ETFs and incorporating them into their strategies. But as the popularity of these investments has grown, so have the misconceptions. Below are five of the most common ETF myths.
ETFs can be a natural complement to a portfolio of individual shares. This is mainly because they offer access to a wide range of markets globally, many of which may not be accessible to UK investors………………………………………..Full Article: Source

Commodities become China’s hottest new casino

Posted on 04 May 2016 by VRS  |  Email |Print

China’s market regulator may have succeeded in taking much of the froth off the country’s surging commodities markets last week, but the message is not filtering down to many dedicated retail traders. As Chinese markets reopened on Tuesday after the May Day holiday, a few dozen young traders in Shanghai crowded into a small room provided by a local brokerage.
The mostly 20-something male traders, dressed in jeans and T-shirts, were looking forward to another week of fevered risk-taking in China’s hottest new casino. “It’s better for futures traders to be young because they can learn faster,” said Zhang Jun, 26, who has been trading commodities on the Shanghai Futures Exchange for three years but has only recently begun to make any money………………………………………..Full Article: Source

Harvard Professor Urges EMs To Buy Gold

Posted on 04 May 2016 by VRS  |  Email |Print

Emerging market economies need to shy away from the U.S. dollar and U.S. treasuries, and instead invest more in gold, this according to one Harvard profession.
Tuesday, in a commentary for Project Syndicate, Kenneth Rogoff, professor of Economics at the Ivey League university and former chief economist at the International Monetary Fund, recommended that emerging economies boost their gold reserves to about 10%, which would still keep them below some developed country’s gold reserves………………………………………..Full Article: Source

Beijing’s controls on speculative commodities trading are likely to increase

Posted on 02 May 2016 by VRS  |  Email |Print

Investors will be looking at Beijing’s efforts to rein in the latest outburst of speculative trading in Chinese commodity markets with a mixture of trepidation and dread. That’s because the surge in speculative trading in China’s commodity futures exchanges, and the vertiginous rise in prices, is worryingly reminiscent of the Chinese share market before the bubble burst in the middle of last year.
In the past month, Chinese retail investors and fund managers have flocked to the country’s commodity futures markets. On many days, trading in some commodity future contracts, such as iron ore, has been so large that it has topped the country’s annual imports………………………………………..Full Article: Source

Iron ore is China’s new casino

Posted on 02 May 2016 by VRS  |  Email |Print

The price of iron ore for decades was hammered out in secret talks between the world’s biggest miners and steelmakers. Now, the dominant force is an obscure commodities market in northeastern China, a stark example of how pricing power for everything from steel to copper is shifting east.
The change has been driven by Chinese investors who have poured billions of dollars into iron-ore futures traded on the Dalian Commodity Exchange. Their bets, reminiscent of last year’s frenzy in Chinese stocks, have generated as much dollar volume as gold futures in New York, according to data from Citigroup Inc………………………………………..Full Article: Source

Chinese Commodity Speculators Drop Out After $261 Billion Binge

Posted on 29 April 2016 by VRS  |  Email |Print

The speculators that traded $261 billion in Chinese commodities in a single day last week are retreating as regulators prepare to step up control of the market.
The value of futures traded across China’s three biggest commodity exchanges has shrunk 42 percent since investors spent 1.7 trillion yuan last Thursday on everything from steel bars to eggs. The amount that changed hands was on a par with the entire U.S. equities market on the same day………………………………………..Full Article: Source

Believe it or Not – It’s Way Too Early to Take Profits in Gold and Silver

Posted on 29 April 2016 by VRS  |  Email |Print

It was no fun investing in precious metals for most of 2011-2015, but the past few months have sure been a blast for buy-and-hold investors. Silver prices are up 22.5% year to date, and gold isn’t far behind. Now that there are some profits available to take, some gold and silver investors wonder if they should grab them. The answer for most people is not yet — not even close.
Yes, there are gains. But the real question for gold and silver investors isn’t whether or not there are profits, it’s whether there are better options for their investment dollars. What other assets have a better risk/reward profile? Cash? Stocks? Bonds? No thank you!……………………………………….Full Article: Source

Speculative Bubble in China Commodity Futures Rattles Industry Players

Posted on 28 April 2016 by VRS  |  Email |Print

A surge of volatility in China’s once placid commodities futures markets has rattled industrial players who use them for hedging, with some taking losses or cutting exposure, driven out by a flood of speculative money from hedge funds and retail investors.
A herd of financial investors charged into commodities futures markets this year, throwing money into iron ore, rebar, cotton, and even egg futures, causing rapid spikes and leading many to warn of similarities with last year’s boom and bust in Chinese stocks………………………………………..Full Article: Source

China acts to cool frenzied speculation in commodities

Posted on 27 April 2016 by VRS  |  Email |Print

China has moved to clamp down on excessive speculation in commodities after weeks of frenzied trading boosted prices and ignited fears of another bubble in its domestic markets.
Iron ore and steel futures in China fell back again yesterday after the authorities raised transaction costs to cool rapid gains that had raised concerns that an unstable speculative bubble was forming. However, other commodity futures, including coking coal, kept surging………………………………………..Full Article: Source

China’s Gold Imports Jump on Investment Demand as Price Falters

Posted on 27 April 2016 by VRS  |  Email |Print

China, the world’s biggest gold consumer, increased bullion imports from Hong Kong in March as a global price rally stalled and local investment demand showed signs of recovery. Net purchases climbed to 64.1 metric tons from 42.9 tons in February and 61.8 tons a year earlier, according to data from the Hong Kong Census and Statistics Department compiled by Bloomberg.
The mainland bought nearly 76.3 tons compared with 55.1 tons a month earlier, while exports to Hong Kong were 12.1 tons from 12.2 tons. Mainland China doesn’t publish the data………………………………………..Full Article: Source

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