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Commodities Briefing - Category | Market Moves more

Iran is ready to enter the oil market

Posted on 08 February 2016 by VRS  |  Email |Print

Iranian Oil Minister Bijan Zanganeh stated that now that the Western sanctions against the country have been lifted, Tehran intends to export up to 300 thousand barrels of crude oil per day to Europe.
Iran has officially announced the estimated volume of oil exports to Europe, which was the most important market for the Islamic Republic of Iran until the moment when the majority of western countries introduced restrictive measures in response to Tehran’s nuclear program in 2012. According to Zanganeh, over the next few months Iran will try to increase the total volume of oil exports to 500 thousand barrels per day due to supplies to Asian countries………………………………………..Full Article: Source

2016 growth in Saudi oil sector to remain positive

Posted on 08 February 2016 by VRS  |  Email |Print

Annual growth in the Saudi oil sector will remain positive in 2016 with average oil output expected to increase slightly, as the Kingdom continues to protect its share in the oil market, according to a report. The current period of low prices is set to remain throughout 2016 pulled down primarily by persistently high oil supply, stated the report from Jadwa Investment.
“Saudi crude production averaged 10.2 million barrels per day in 2015 and we do not see any cuts in production to support upward movement in prices going forward. We therefore expect 2016 Saudi production to be unchanged, year-on-year, at 10.2 million barrels per day in 2016,” added the Jadwa economists………………………………………..Full Article: Source

Does OPEC have 2020 vision? – BofA Merrill Lynch

Posted on 08 February 2016 by VRS  |  Email |Print

The structural shift toward a lower price environment will have profound and long-lasting consequences for non-cartelized production. With prices recently trading below the $30/bbl mark, our expected 10 percent cut in 2016 global capex is starting to look modest.
Current production from mature fields is set to decline at higher rates as maintenance capex has been cut too. Net, we now expect total non-OPEC supply to decrease to 56.4 mn b/d in 2017 before rebounding to 57.5 mn b/d in 2020, near 2015 output levels………………………………………..Full Article: Source

Dark clouds gather for South Africa’s miners

Posted on 08 February 2016 by VRS  |  Email |Print

It is one of the mining industry’s historic heartlands and is endowed with some of the world’s richest mineral deposits. But right now South Africa is a place where some of the largest miners in the world are reluctant to do business.
More than 600 job cuts announced last week by South32, the Australian mining company that was last year spun out of BHP Billiton, are the latest indication of how South Africa is bearing the brunt of the worst commodities downturn in more than a decade. In total, 32,000 mining jobs in the country, about 6 per cent of the industry workforce, are subject to formal consultations that could lead to redundancies………………………………………..Full Article: Source

Dollar softening boosts equities, commodities

Posted on 05 February 2016 by VRS  |  Email |Print

Global equity markets rose on Thursday as diminished expectations of U.S. interest rate hikes this year pushed the dollar lower, which in turned boosted the prices of many commodities.
The dollar fell for a fourth day on the latest batch of soft U.S. data, while comments from a U.S. Federal Reserve policymaker on Wednesday were viewed as a sign further rate hikes could be delayed. Those comments were buttressed on Thursday by Robert Kaplan, the new head of the Dallas Fed, who said the central bank should be “patient” on rate increases………………………………………..Full Article: Source

Saudi Arabia Cuts Prices

Posted on 05 February 2016 by VRS  |  Email |Print

Saudi Arabia on Thursday cut prices for its best-quality crude oil destined for customers in Europe and Asia amid uncertainty about whether the Organization of the Petroleum Exporting Countries will meet to discuss action to raise oil prices.
The move to lower prices would help the world’s largest exporter of crude defend its most lucrative markets against encroachment from rival producers such as Iran, which is ramping up its output now that Western sanctions have been lifted………………………………………..Full Article: Source

Six OPEC states ready for emergency meeting with non-OPEC members

Posted on 05 February 2016 by VRS  |  Email |Print

Representatives of 6 member-states of the Organization of the Petroleum Exporting Countries (OPEC) are ready to participate in an emergency meeting on coordinated reduction of oil production with non-OPEC members, Venezuela’s Oil Minister Eulogio del Pino said during his visit to Tehran on Thursday.
According to the minister, such OPEC member-states as Iraq, Algeria, Nigeria, Ecuador, Iran and Venezuela as well as non-OPEC members Oman and Russia have given their consent. “The idea is not only to hold the meeting but to reach particular results,” he was cited as saying by Iran’s news agency Shana………………………………………..Full Article: Source

Gold: No Silver Lining

Posted on 05 February 2016 by VRS  |  Email |Print

Gold is continuing its impressive 2016 rally into early February. The recent surge may be coming to the end of the line, at least for the short term. Gold has not only reached overbought levels, but it is also missing an important silver lining of support behind its advance.
Gold is continuing its impressive 2016 rally into early February. But the recent surge may be coming to the end of the line, at least for the short term. Gold has not only reached overbought levels, but it is also missing an important silver lining of support behind its advance………………………………………..Full Article: Source

Keeping an eye on bullion supply and demand

Posted on 05 February 2016 by VRS  |  Email |Print

A lot is riding on the demand side of the equation when it comes to metals’ price performance this year. Demand is the bigger wildcard with signals thus far being mixed in gold and silver bullion markets. The outlook for supply is more certain, and it isn’t pretty.
Endeavor Silver, one of the largest primary silver mining companies, announced last week that it expects to reduce production of the white metal by roughly 30%. The company’s El Cubo mine is not profitable despite efforts to reduce costs. Endeavor plans to halt development and exploration at the mine and process accessible ore only. By year end, the mine will be placed on “care and maintenance.”……………………………………….Full Article: Source

One sign that oil is losing its hold over markets

Posted on 04 February 2016 by VRS  |  Email |Print

Is crude oil becoming old news? A particular currency seems to be suggesting so, says one strategist. On Tuesday, Boris Schlossberg of BK Asset Management noted that the correlation between the Canadian dollar and crude oil has been weakening, a sign that oil’s influence over markets may be coming to an end.
Since oil accounts for a major part of Canada’s exports, the country’s currency tends to trade in tandem with the price of crude oil. Earlier this year, Schlossberg declared that everything from stocks to currencies were taking cues from crude oil’s wild swings………………………………………..Full Article: Source

Could Russia and OPEC really strike a deal on oil?

Posted on 04 February 2016 by VRS  |  Email |Print

Rumors of a Russia-OPEC deal on curbing production has offered oil prices some much needed relief, with prices surging again on Wednesday on further hints of a meeting.
However, the messages have been mixed: Russian Foreign Minister Sergei Lavrov suggested on Wednesday Russia was open to a meeting with the oil-producing cartel. But comments from Russia’s representative to OPEC said that it was unlikely the group would meet with Russia anytime soon, according to Russian news agency Interfax Wednesday………………………………………..Full Article: Source

Emerging Stocks Drop With Commodities as Growth Concern Lingers

Posted on 03 February 2016 by VRS  |  Email |Print

Emerging-market stocks fell the most in a week as oil deepened its decline and concern mounted that the contagion from China’s economic slowdown is spreading. A gauge of developing-nation exchange rates dropped for a second day, led by the Russian ruble.
South African equities slid for a second day as the World Bank said the continent’s second-largest economy is flirting with stagnation. The Ibovespa fell the most since August 2011 as Brazilian commodity exporters including Vale SA slid with raw-material prices………………………………………..Full Article: Source

Is the commodities sector all doom and gloom? (Video)

Posted on 03 February 2016 by VRS  |  Email |Print

During 2001 and 2011 the commodity’s market was booming, mainly driven by exuberance about Chinese consumption levels. The result was a steady flow of investment money, much of which found its way into developing projects.
In 2011 this changed. Joining CNBC Africa to give his thought on the outlook of commodities ahead of the upcoming “Investing in African Mining Indaba” is Mark Tyler; Senior Investment Banker at Nedbank Corporate and Investment Banking………………………………………..Full Article: Source

No decision yet on OPEC, non-OPEC meeting, some in OPEC skeptical

Posted on 03 February 2016 by VRS  |  Email |Print

OPEC has not yet scheduled any talks with Russia and other non-OPEC countries aimed at supporting oil prices, two OPEC delegates said on Tuesday after Russian officials talked up potential cooperation with the exporter group.
Russian Foreign Minister Sergei Lavrov said Moscow was open to further cooperation in the oil market with OPEC and non-OPEC countries. The prospect of supply restraint by the Organization of the Petroleum Exporting Countries and rivals has helped oil prices rise above $32 a barrel from a 12-year low close to $27 last month, despite widespread scepticism that a deal will happen………………………………………..Full Article: Source

Russia is now China’s biggest oil partner — and it’s a huge problem for Saudi Arabia

Posted on 03 February 2016 by VRS  |  Email |Print

Saudi Arabia has long trumped Russia in the Chinese oil market. The Saudi share of Chinese crude imports at the beginning of the decade was about 20%, while Russia’s was below 7%, according to data cited by RBC Capital Markets.
But now the Russians are creeping in — and the Saudis are getting nervous. “Russia is the biggest rival to the Saudis in the single-largest oil demand growth country in the world,” RBC Capital Markets’ commodity strategist Michael Tran wrote………………………………………..Full Article: Source

Gold at three-month high as global economy concerns persist

Posted on 03 February 2016 by VRS  |  Email |Print

Gold touched a new three-month high on Tuesday as concerns about the global economy and a further drop in the oil price pushed investors towards safe-haven assets. Weak Chinese manufacturing data on Monday underscored the challenges for the world economy and increased volatility in oil and other assets is supporting gold.
“In the near term gold is finding some support in the dovish tone from central banks last week, notably the Fed and the Bank of Japan,” said Jens Pedersen, senior analyst at Danske Bank………………………………………..Full Article: Source

Gold Is Off to a Strong Start in 2016

Posted on 03 February 2016 by VRS  |  Email |Print

The price of gold has jumped 6% this year, making it the best-performing commodity of 2016. At $1,127 an ounce, that’s well below its 2011 high of nearly $1,900 an ounce, but still better than its six-year low of $1,051.60 an ounce just a few months ago. Gold exchange-traded funds also are on the rise too, growing at their fastest rate in over a year.
People flock to gold when they think there are tough economic times on the horizon. So it’s no surprise that the precious metal’s recent rise has corresponded with the stock market’s slide. The Dow is down more than 7% to date while the Nasdaq is off by about 10%. Falling oil prices and a slowdown in China have compounded fears about the economy………………………………………..Full Article: Source

Yuan Devaluation Will Lower Commodity Prices

Posted on 02 February 2016 by VRS  |  Email |Print

A depreciation of 1 per cent in the Chinese yuan leads to a decline of 0.6 per cent in commodity prices, according to Bank of America. This relationship with the currency is the strongest for commodities such as copper and platinum, of which China is the world’s dominant consumer, the US bank’s strategists wrote in a report dated January 25.
A cheaper yuan will erode the purchasing power of the Chinese, pushing prices down and outweighing any benefit from easier financial conditions that a devaluation may bring, they said. Bank of America analysts compared the moves on the Bloomberg Commodity Index with the yuan’s changes against the US dollar and a basket of other currencies to calculate the so-called beta, which measures one security’s sensitivity to another……………………………………….Full Article: Source

Iran’s return to oil market overestimated

Posted on 02 February 2016 by VRS  |  Email |Print

Iran’s return to the global oil market, as well as its consequences for the global prices is overestimated, Cyril Widdershoven, Middle East geopolitical specialist and energy analyst believes. They [Iran] have around 30 million barrels at sea, which is based on 500,000 barrels per day an extra volume in market for around 60 days.
This is not enough to really force markets totally down,” Widdershoven told Trend. Expert believes that the further increase in the country’s oil production will take another 3-5 years, as the financial instruments and necessary technology are not available at this time………………………………………..Full Article: Source

No decision yet on any OPEC, non-OPEC meeting: sources

Posted on 02 February 2016 by VRS  |  Email |Print

OPEC and non-OPEC countries have not yet agreed to hold a meeting to discuss action to support oil prices, two OPEC delegates said on Monday, nearly a week after Russian officials said Moscow should talk to OPEC.
In addition, a decision on whether to hold a standalone gathering of the Organization of the Petroleum Exporting Countries as proposed by Venezuela has yet to be taken, the delegates said, but a number of countries have responded coolly to the idea. OPEC delegates said last week a gathering of OPEC and non-OPEC oil officials could take place in February or March, perhaps at an expert rather than ministerial level………………………………………..Full Article: Source

Key Macroeconomic Indicators for Base Metal Prices

Posted on 02 February 2016 by VRS  |  Email |Print

Market will eye January manufacturing PMIs from major economies on Monday. Investors are anticipating policy stimulus to help the Chinese economy bottom out. China’s official manufacturing PMI and that released by Caixin are expected to stabilize.
The euro zone will continue recovering mildly, which is possibly why the ECB did not take action to loosen monetary policy further. Germany and France will remain two major drivers of growth in the euro zone. Italy and Spain are recovering at a faster pace. This will allow manufacturing PMI in the euro zone to recover………………………………………..Full Article: Source

Egypt to launch agricultural commodities bourse by year-end

Posted on 02 February 2016 by VRS  |  Email |Print

Egypt plans to launch an agricultural-focused commodities trading exchange, the first of its kind in the Middle East, by the end of 2016, Supplies Minister Khaled Hanafi said. Speaking at a press conference announcing the completion of a feasibility study on the new bourse, Hanafi said its launch would protect small farmers from volatile price swings and help to connect their output to supply chains.
“Egypt is the biggest importer of grains, and it will benefit from this, turning this from a point of weakness into a strength as Egypt becomes a point of exchange for the whole region,” said Hanafi………………………………………..Full Article: Source

Japan Trading Houses Facing $13 Billion Hit on Commodity Misfire

Posted on 02 February 2016 by VRS  |  Email |Print

A handful of companies that have dominated almost every kind of raw-material business in Japan for decades may take as much as $13 billion in charges during the current fiscal year. The global commodity slump is squeezing the “sogo shosha,” or general trading houses like Mitsubishi Corp. that supply everything from gasoline and steel to seafood and noodles in resource-poor Japan.
They invested in metals and energy only to see prices fall. Already, Sumitomo Corp. has taken a $650 million writedown at a nickel project in Madagascar. Its rivals will probably report impairments as soon as this week, says Goldman Sachs Group Inc………………………………………..Full Article: Source

What volatile markets say about the world economy

Posted on 02 February 2016 by VRS  |  Email |Print

January is usually expected to be a good month for stock markets, with new money gushing into investment funds, while tax-related selling abates at the end of the year.
Although the data on investment returns in the United States actually show that January profits have historically been on only slightly better than the monthly norm, the widespread belief in a bullish “January effect” has made the weakness of stock markets around the world this year all the more shocking………………………………………..Full Article: Source

2016: The Year of the Commodities Buyer

Posted on 01 February 2016 by VRS  |  Email |Print

A world “drowning in oversupply” of oil and other commodities could make 2016 a super-cheap year for Asia’s major resource importers such as China and Japan. However, the drag on growth for commodity exporters is putting yet more pressure on emerging markets, according to the World Bank.
In a January 26 report, the Washington-based lender cut its forecast for crude oil prices to just $37 a barrel, down from $51 in its October projections, while also cutting price forecasts for 37 of the 46 commodities it monitors………………………………………..Full Article: Source

Saudi Arabia will cooperate on oil output, didn’t propose production cut, says Arabiya

Posted on 01 February 2016 by VRS  |  Email |Print

Saudi Arabia wants to cooperate with other oil producers to support the oil market, Saudi-owned Al Arabiya television reported on Sunday, quoting an unnamed Saudi source.
The source also told the Dubai-based satellite channel that the kingdom was not the source of a proposal to cut production that Russia was studying. Russia said on Thursday that OPEC had proposed oil production cuts of up to 5 percent in what would be the first global deal in over a decade to help reduce a glut of crude and prop up sinking prices………………………………………..Full Article: Source

Venezuela Tries to Convince Oil Nations to Cut Production

Posted on 01 February 2016 by VRS  |  Email |Print

Venezuela’s Oil Minister Eulogio Del Pino faces an uphill battle persuading Russia and Saudi Arabia to cooperate in cutting oil production amid a supply glut that has pushed prices down more than 30 percent in the past year, according to analysts Robin Mills and Edward Bell.
Concern that U.S. shale producers would benefit from any increase in oil prices following a potential cut is one factor that will keep Saudi Arabia and Russia from agreeing to a reduction in output, according to Mills, chief executive officer of Dubai-based oil consultant Qamar Energy, and Bell, commodities analyst at lender Emirates NBD PJSC………………………………………..Full Article: Source

Why LBMA’s Top Forecaster Slightly Upped His Gold Forecast

Posted on 01 February 2016 by VRS  |  Email |Print

Despite having slightly upped his 2016 gold forecast, the London Bullion Market Association’s 2015 top forecaster says not too get too excited. Natixis ’ precious metals analyst Bernard Dahdad, whose 2015 forecast was within $1 of the average gold price last year, said he expects prices to average around $990 an ounce, up just 2% from his previous call of $970.
“If you asked me back in November, I was slightly more bullish on the U.S. economy and the Fed rate hikes,” he told Kitco News in a telephone interview Friday. He said he expects the Federal Reserve to hike rates at a slower pace, which should slightly support gold prices………………………………………..Full Article: Source

Are mining shares the steal of the century?

Posted on 01 February 2016 by VRS  |  Email |Print

Shares in miners are at their cheapest for almost 12 years having collapsed by 76pc since early 2011, but there are important reasons to stay cautious. Shares in mining companies are at their lowest levels for almost 12-years. Bargain hunters are right to be attracted to what looks like the opportunity of a lifetime, but industry experts are issuing a stark warning to those thinking of diving back in.
The amount of value destruction has been staggering. The FTSE 350 Mining Index peaked at more than 28,000 following the 2008 financial crisis, and it has fallen more than 76pc to end last week hovering around 6,800………………………………………..Full Article: Source

Here’s how the commodity market will fare in 2016

Posted on 29 January 2016 by VRS  |  Email |Print

The latest Commodity Markets Outlook report by the World Bank has projected a decline in the price indices of all main commodities. This is partly due to persistently elevated supplies and weak growth prospects in the emerging market economies of the world.
Commodity prices have continued to slide over worries concerning the global macroeconomic growth environment, particularly the decelerating pace of China’s economy. Last year commodity markets were plagued by volatility which subsequently affected commodity-linked companies around the globe………………………………………..Full Article: Source

Russia Comments Tease Oil Market Eager for Any Glimmer of Hope

Posted on 29 January 2016 by VRS  |  Email |Print

For a few minutes, at least, there was a glimmer of hope for the world’s struggling oil producers. After months of opposing any production cuts, Russia said on Thursday it would be willing to discuss output levels with OPEC — opening the door for a deal with Saudi Arabia to revive oil prices hovering at $30 a barrel.
Brent crude, the global benchmark, surged nearly 8 percent to $35.84 a barrel almost immediately. But the joy for oil producers — and some traders — was short-lived, and the price slid back to $34. Within minutes, OPEC delegates said they knew nothing about a potential meeting with Russia next month, let alone output cuts………………………………………..Full Article: Source

Saudi Arabia well equipped to sustain oil market share

Posted on 29 January 2016 by VRS  |  Email |Print

OPEC’s oil production is expected to rise by a further 500,000 barrels per day by Q4 2016 year-on-year, according to a report released by Jadwa Investment. It said that the current period of low prices is set to remain throughout 2016, pulled down primarily as a result of persistently high oil supply.
All-out competition between members of OPEC will be the main reason for continued oversupplied markets. But Saudi Arabia remains well equipped to hold off any attempts of encroachment on its market share since it is currently the only major oil producer with spare oil production capacity, Jadwa economists added………………………………………..Full Article: Source

Believe it or not, oil is back in a bull market

Posted on 29 January 2016 by VRS  |  Email |Print

It may have been wrong to call oil’s rise a dead cat bounce last week. Everyone’s favorite cratering commodity has actually been having a pretty good run since Jan. 20. Brent crude today (Jan. 28) rose above $35 per barrel for the first time in about three weeks on news that OPEC and Russia might finally curtail their contribution to the overproduction that has the world awash in oil.
That was enough to technically put oil in a bull market, trading at 20% higher than its recent lows. Spurring today’s rally: Reuters is reporting that Russia’s oil minister said Saudi Arabia proposed cutting production by 5%………………………………………..Full Article: Source

The gold market just lost its best measure of Chinese demand

Posted on 29 January 2016 by VRS  |  Email |Print

The Shanghai Gold Exchange has stopped publishing its weekly gold withdrawal figures, forcing the market to lose its “best measure of Chinese wholesale demand,” according to Koos Jansen, precious-metals analyst and blogger for Singapore-based bullion dealer BullionStar.
Jansen, well known for his analyses on the Chinese gold market, pointed out in a blog Jan. 26, that the SGE’s Chinese Market Data Weekly Reports on the first two trading weeks of this year don’t list gold vault withdrawal figures. He said the SGE told him those figures will no longer be published………………………………………..Full Article: Source

Why The Gold Market Is Glittering Again

Posted on 29 January 2016 by VRS  |  Email |Print

It’s been tough finding winners in financial markets so far this year. Nearly every asset class is moving together in lockstep … to the downside. But one asset that’s been much maligned in recent years, practically given up for dead in fact, is glittering again: Gold! The Dow and S&P 500 are both down 8% year to date.
Small caps have it worse with a double-digit decline of 12.2%. China’s Shanghai Index plunged 20% in the last three weeks alone. And most commodities are still getting shellacked with nat gas down 6.7% and Oil plunging 15.1% already this year. But it looks like gold got its groove back in 2016!……………………………………….Full Article: Source

World Platinum Investment Council approved as Singapore Bullion Market Association member

Posted on 29 January 2016 by VRS  |  Email |Print

The World Platinum Investment Council (WPIC) announced it has been approved by the Singapore Bullion Market Association (SBMA) for foreign associate corporate membership. This marks the first in a series of strategic initiatives the WPIC is developing in 2016 to stimulate investor demand for physical platinum and increase the number and type of platinum investment opportunities available in Asia.
The SBMA was formed in 1993 to promote Singapore as a precious metals ‘hub’ in Southeast Asia and its existing members include ICBC Standard Bank Plc, Bank of Nova Scotia, J.P. Morgan, and UOB Bullion & Futures Ltd………………………………………..Full Article: Source

Will El Nino’s sister hold sway in 2016?

Posted on 29 January 2016 by VRS  |  Email |Print

The El Nino weather phenomenon wreaked havoc worldwide last year. Its counterpart, La Nina, could cause more trouble in 2016.
The term El Nino, Spanish for “the boy,” was coined by Peruvian fishermen to refer to a warm ocean current that typically arrives around Christmas time. This warmth affects weather around the globe. Last year, it was blamed for droughts in Thailand and Indonesia, among other extreme conditions………………………………………..Full Article: Source

How to play commodities ahead of the Fed

Posted on 28 January 2016 by VRS  |  Email |Print

Is the Fed about to give commodities a much-needed boost? Gold tempered recent gains ahead of the Federal Reserve statement Wednesday. But if the central bank sounds dovish in its release at 2 p.m. ET, gold and other metals could be ready to surge.
In December, the Fed raised the federal funds rate for the first time in almost a decade. However, Phillip Streible of RJO Futures said he doesn’t expect another rate hike for the rest of 2016. The absence of further rate increases should lead to a weaker dollar and higher gold prices………………………………………..Full Article: Source

Commodities Junk Faces More Pain Amid Contagion Threat, UBS Says

Posted on 28 January 2016 by VRS  |  Email |Print

A prolonged slump in oil prices promises more pain for commodities-related debt and threatens to spread to other parts of the leveraged-finance market, according to UBS Group AG. Energy bonds have borne the brunt of crude’s plunge to a 12-year low, falling 10 percent this year after a 24 percent drop last year.
With no end in sight to the oil slump, the market may not be adequately pricing in defaults or compensating investors for mark-to-market and liquidity risks for lower-rated junk companies, UBS strategists led by Matthew Mish wrote in a note Wednesday………………………………………..Full Article: Source

Saudis battle for oil market supremacy

Posted on 28 January 2016 by VRS  |  Email |Print

By abandoning the tight rein it held for decades on the oil market, OPEC heavyweight Saudi Arabia launched a battle for control that sent crude prices plummeting. It has been a painful fight, experts say, but with its vast resources the Gulf kingdom is showing no signs of giving up.
The huge drop in oil prices since mid-2014, from more than $110 a barrel to around $30, followed a decision by the Saudi-influenced Organization of the Petroleum Exporting Countries not to cut output as it had in the past to keep prices high………………………………………..Full Article: Source

Bright prospects for gold in 2016: Survey

Posted on 28 January 2016 by VRS  |  Email |Print

The quantum of gold supply dropped seven per cent in the December 2015 quarter owing to a four per cent fall in global mine output, according to GFMS Thomson Reuters’ Gold Survey: Q4 2015 Review and Outlook, released on Wednesday.
This is the largest quarterly reduction since 2008 and an all-time high for fourth quarter demand. Producers and mines that hedge (selling future production when they see prices falling) have started de-hedging (buying back their forward sales as they expect prices to recover)………………………………………..Full Article: Source

The Financial Economics Of Gold Markets

Posted on 28 January 2016 by VRS  |  Email |Print

Gold is one of the most malleable, ductile, dense, conductive, non-destructive, brilliant, and beautiful of metals. This unique set of qualities has made it a coveted object for most of human history in almost every civilization, and there have been active gold markets for over 6,000 years Green (2007).
As money, as an investment, as a store and source of value, hundreds of papers have been written on Gold. This review provides a state of the art overview of this voluminous research, and acts as an introduction to this special issue of the International Review of Financial Analysis, while also assisting as a source of reference for future research………………………………………..Full Article: Source

Commodity producers face tough times on bearish market

Posted on 27 January 2016 by VRS  |  Email |Print

Commodity bears are testing nerves of producers. Several commodity producers, especially those related to metals and US shale, have blinked and cut production. However, there is always a limit to the extent they can cut production. Prices are at multi-year lows — metals around 7-8 year lows, oil at 12-year lows. Gold and silver are no exceptions and so are other commodities like iron ore, steel and coal.
Most resource commodities are in a bear market, down significantly from their peaks, largely due to lower demand. The criteria to indicate whether commodities are in a bear market is when a commodity is down 50% or more from its peak or is around its long term low levels………………………………………..Full Article: Source

Kuwait hints OPEC ready to ‘cooperate’ to stabilize oil market

Posted on 27 January 2016 by VRS  |  Email |Print

Kuwait’s OPEC Governor Nawal al-Fuzaia hinted on Tuesday that the Organization of the Petroleum Exporting Countries is ready to cut production in an effort to stem the persistent slump in oil prices. The governor told an energy forum in Kuwait that the cartel is ready to “cooperate” with others to stabilize the oil market, according to media reports.
“OPEC is willing to cooperate with producers outside the group if they show that they are serious about cooperating with OPEC. Non-OPEC producers keep on making statements that they are willing to cooperate, but the reality is different,” she said, according to Dow Jones Newswires………………………………………..Full Article: Source

LBMA plans central hub for London gold market

Posted on 27 January 2016 by VRS  |  Email |Print

The London Bullion Market Association is planning a central hub for posting trades in the $5 trillion a year London gold market, LBMA consultant David Gornall said in an editorial in the association’s trade magazine the Alchemist on Tuesday.
It has also agreed on the need for a voluntary reporting system for gold, silver, platinum and palladium spot transactions, as well as non-cash settled forwards, and favours the creation of a data warehouse to gather and store information on transactions, Gornall, a former chairman of the LBMA, said………………………………………..Full Article: Source

Zinc leads metals higher on China

Posted on 27 January 2016 by VRS  |  Email |Print

Zinc led industrial metals higher in its longest winning streak since the start of September on an increase in Chinese imports. It rose 2.1% to $1 547 a metric ton by 10:43am on the London Metal Exchange, a fourth straight day of gains. Copper jumped as much as 1.9% and lead 0.9%.
Chinese imports of zinc surged last month to the highest since May 2009 as buyers took advantage of low prices and bought in anticipation of further declines in the yuan exchange rate. The country also imported the most refined copper since 2008………………………………………..Full Article: Source

What Dr Copper isn’t telling us right now: Andy Home

Posted on 27 January 2016 by VRS  |  Email |Print

For those who like their market narratives nice and simple Dr. Copper’s message is resoundingly clear. The metal with the reputation for shining a light on the state of global manufacturing is telling us that demand growth has all but evaporated, thanks first and foremost to China.
Moreover, this is no cyclical aberration. Rather, to quote credit agency Moody’s, which has just put 175 commodities companies on review for possible downgrade, “the effect of slowing growth in China indicates a fundamental change”………………………………………..Full Article: Source

Are You Ready for the Commodities Bull Market?

Posted on 26 January 2016 by VRS  |  Email |Print

Something’s not right… Crude oil didn’t crash into the mid-twenties for no reason. World leaders and academics are to blame. They think higher taxes, more regulation, printing money and lower interest rates will solve their problems. Yet, this has crashed the world economy before our eyes.
Commodity prices don’t lie — they’re telling the real story. When politicians hunt down every spare cent, businesses won’t invest and consumers won’t spend. They’ll save for a rainy day. It’s why industrial commodities (i.e. iron ore, nickel, copper, zinc, lead…) are crashing. There’s less demand for goods in an oversaturated market………………………………………..Full Article: Source

Commodities stocks sink as oil resumes downward slide

Posted on 26 January 2016 by VRS  |  Email |Print

Oil prices are sinking again, fast, and miners and commodities stocks are once again finding themselves in that all-too familiar position at the bottom of the FTSE 100. As fastFT reported earlier, oil prices are once again heading south after a short-lived rally last week.
Brent crude is falling 3.7 per cent at publication time to $30.99 a barrel while WTI, the US benchmark, is down 3.91 per cent at $30.93 a barrel. There had been hopes that the worst may be over for oil prices but clearly the market didn’t get the memo today………………………………………..Full Article: Source

OPEC officials see oil market begin to start rebalancing

Posted on 26 January 2016 by VRS  |  Email |Print

OPEC officials said on Monday the oil market was poised to start rebalancing itself after prices sank to their lowest since 2003, a sign the exporter group will stick to its policy of not cutting supplies without help from rival producers. Oil prices have collapsed to below $28 a barrel this month from $100 in mid-2014 on a supply glut.
The drop gained impetus after the Organization of the Petroleum Exporting Countries in late 2014 shifted strategy to defend market share, not prices. The price drop has started to slow the development of relatively expensive supply sources such as U.S. shale oil and forced companies to delay or cancel billions of dollars worth of projects, putting some future supplies at risk………………………………………..Full Article: Source

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