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Brexit sparked economic volatility and uncertainty

Posted on 22 July 2016 by VRS  |  Email |Print

The British move fast. While we wrestle for a couple of years with the succession of leadership in the White House, the British have in swift days bounced out Prime Minister David Cameron, and his successor Theresa May, is already governing in 10 Downing Street.
Cameron had no choice but to fall on his sword since for the sake of a squabbling Conservative Party, beset by a reactionary far right, he miscalculated the risk of a national referendum of dubious constitutionality. Britain has got along quite well without the kind of constitution written by the U.S. framers, but this time Britain’s ‘muddling through’ just did not work………………………………………..Full Article: Source

Why the Dollar Is the Enemy of Commodity Values

Posted on 21 July 2016 by VRS  |  Email |Print

The global financial marketplace is a complex, interconnected organism where every company, commodity, and financial asset is just a piece of a much larger picture. What happens with one asset can influence another, and so on. There’s a relationship that exists between asset classes that, while not perfect, tends to follow a pattern over time.
The relationship usually follows a certain order – currencies up, commodities down, bonds up, and stocks up or down. It works in reverse as well with commodities going higher if currencies fall. Keep in mind that commodity values play a bigger role in this relationship than it might appear – commodity prices drive stock and bond performance. Let’s take a look at how this works………………………………………..Full Article: Source

Libya: OPEC member plots big oil comeback

Posted on 21 July 2016 by VRS  |  Email |Print

One of the biggest mysteries in the oil market resides in the war-torn nation of Libya. A long civil war and the rise of ISIS have limited Libya’s oil production to just a fraction of what it was in 2010, before the uprising that ousted and ultimately killed the country’s longtime dictator Moammar Gadhafi.
Libya, a large global oil producer, appeared to reach a breakthrough earlier this month when rival governments in the east and west agreed to merge their competing oil companies. The agreement was hailed as a positive step and some even predicted Libya could quickly double its oil production, flooding the oversaturated market with tons of high-quality crude………………………………………..Full Article: Source

Gold Fields forecast sparkles on strong dollar gold price

Posted on 21 July 2016 by VRS  |  Email |Print

In some rare good news from the gold-mining industry, Gold Fields reported on Tuesday that it expected its output for the year to June to increase marginally to 1.044-million ounces. One analyst said the company, which is headed by Nick Holland, would be increasingly attractive to investors if it continued to reduce its costs.
Citing a slightly stronger US dollar gold price, and an Australian dollar that has weakened 5% year-on-year against the greenback, the company said on Tuesday that it expected its half-year earnings per share to be 14 US cents higher than the zero cents reported in the same period in 2015………………………………………..Full Article: Source

A global battle for trading supremacy in industrial metals

Posted on 18 July 2016 by VRS  |  Email |Print

China has loomed large over the world of industrial raw materials for many years. The prices of metals from aluminum to zinc have long swayed to the beat of the world’s largest manufacturing country. But this is the year that China has emerged from the limelight to take centre-stage in the trading of those metals.
On one day alone, March 10, trading volumes on the Dalian Exchange iron ore contract exceeded one billion tonnes, more than the combined annual output of the world’s biggest three producers, Rio Tinto, BHP Billiton and Brazil’s Vale………………………………………..Full Article: Source

Guess what’s on pace to book the biggest gain among commodities this week

Posted on 15 July 2016 by VRS  |  Email |Print

Cotton futures boast the largest gain among major commodities this week, after rallying Thursday to their highest level in more than two years thanks to a slowdown in global production and signs of stronger demand. Analysts said that the commodity is likely due for a correction after such a spectacular rise, but its lofty prices may be here to stay.
On Thursday, cotton for December delivery rose 1.2% to trade at 74.04 cents a pound on the ICE Futures U.S. exchange. Prices were poised to log their highest settlement since June 2014, and readied for a weekly gain of 12.5%, according to FactSet data………………………………………..Full Article: Source

In World Of $50 Oil, Shale Beats Deepwater

Posted on 14 July 2016 by VRS  |  Email |Print

U.S. shale is the lowest cost option for new oil production and is likely to be more competitive than conventional offshore drilling, according to a new report from Wood Mackenzie. The U.S. shale industry has weathered the oil price downturn, tweaking drilling practices and cutting costs in order to stay in business.
A new report from Wood Mackenzie finds that the industry is proving to be resilient and flexible in the face of the worst oil market crisis in three decades. The report concludes that U.S. shale companies have managed to cut costs by as much as 40 percent since 2014………………………………………..Full Article: Source

Platinum: Demand Up, Supply Down

Posted on 14 July 2016 by VRS  |  Email |Print

Platinum demand has increased and is set to keep on rising compared to last year according to industry analysts, whereas supply is falling. Total demand for the metal, which finds its single largest use by industry in catalysts to help clean emissions from diesel engines, is set to grow by 2% compared to 2015, while total supply shrinks 3% according to the Platinum and Palladium Focus 2016 from leading precious metals consultancy Metals Focus.
Last year’s total supply of platinum was just over 8 million Troy ounces, with total demand reaching 8.2moz, says the report. That marked a 17% and 9% increase respectively from 2014………………………………………..Full Article: Source

Goldman Sachs Revises Base Metals Outlook

Posted on 14 July 2016 by VRS  |  Email |Print

Goldman Sachs has revised its base metal outlook for the year and Alcoa, Inc., has opened earnings season by reporting lower-than-expected Q2 profits. Goldman Sachs on Monday raised its outlook for zinc, aluminum and nickel prices anticipating supply inequalities to continue across the metals sphere throughout the second half of the year.
“In our view, the impact of the prior stimulus is still set to result in sufficient demand growth such that we will continue to see supply differentiation across the metals space during the second half of 2016,” the bank said in a note to investors………………………………………..Full Article: Source

The relationship between gold and silver has changed dramatically

Posted on 12 July 2016 by VRS  |  Email |Print

While gold has soared this year, silver has skyrocketed, leading to a big move in a key measure of relative strength often used by traders. In the beginning of 2016, an ounce of gold was worth as much as 77 ounces of silver; by the end of February, that number would rise above 83.
Yet on Monday, with gold trading at $1,357 per troy ounce and silver at $20.40, the gold/silver ratio is down to 66.5. While this the lowest this indicator has been since September 2014, the ratio is actually still above historical norms………………………………………..Full Article: Source

Commodities Rally Is Fizzling Out as Merchant Fund Sees Oil Drop

Posted on 08 July 2016 by VRS  |  Email |Print

The best is probably over for commodities this year as the Brexit vote adds risks to global growth and oil is set to retreat, according to the Merchant Commodity Fund, which returned 9 percent in the first half.
The fund, run by ex-Cargill Inc. employees Doug King and Michael Coleman, has changed its commodities outlook to neutral from bullish earlier this year. The U.K. vote to exit the European Union has led to uncertainty and growth remains lackluster in top user China, King said. Oil may drop to $40 to $45 a barrel within three weeks as stockpiles fall more slowly than expected, he said………………………………………..Full Article: Source

IEA warns of ever-growing reliance on Middle Eastern oil supplies

Posted on 08 July 2016 by VRS  |  Email |Print

Agency says rise in demand amid price slump has given region biggest market share since 1970s. The world risks becoming ever more reliant on Middle Eastern oil as lower prices derail efforts by governments to curb demand, the west’s leading energy body has warned.
The head of the International Energy Agency told the Financial Times that Middle Eastern producers, such as Saudi Arabia and Iraq, now have the biggest share of world oil markets since the Arab fuel embargo of the 1970s………………………………………..Full Article: Source

Gold Headed For $1500 And This Time It Really Is Different

Posted on 08 July 2016 by VRS  |  Email |Print

Gold has made quite a run and some bears argue that it will correct at least 300 points because of a commodity bear super cycle. Despite the long-term double top pattern in gold, one should not automatically presume that crowd behavior will react in a similar manner.
This time it really is different as the underlying economic fundamentals support higher gold prices. Currently, gold is in the midst of a bullish Fibonacci retracement and its next target is $1500………………………………………..Full Article: Source

The ‘last ugly chapter’ for prices is yet to come

Posted on 07 July 2016 by VRS  |  Email |Print

Commodity investors generally agree that the oil market is coming into balance, but huge stockpiles of fuel and teeming strategic Chinese crude inventories could send prices on one last, ugly slide lower, analysts tell CNBC.
On Wednesday, oil futures were down more than 1 percent, following a nearly 5 percent slide Tuesday, on worries that Britain’s vote to leave the European Union would slow economic growth and dent crude oil demand. Expectations of U.S. crude stockpile growth and further weakness in the Chinese economy created additional headwinds………………………………………..Full Article: Source

Is It Time For OPEC To Dissolve?

Posted on 06 July 2016 by VRS  |  Email |Print

OPEC is no longer functioning as a cohesive group. Is it time for OPEC to finally dissolve? The major oil-producing countries in the world heavily depend on the income from oil. A sharp drop in oil prices has rendered them vulnerable to terrorist attacks and political uprising.
As members of the Organization of the Petroleum Exporting Countries (OPEC), these countries previously wielded power over oil prices and enjoyed the benefits of high oil prices. Unfortunately, the oil cartel is no longer behaving like a cohesive group, and infighting among the member nations is doing more harm than good………………………………………..Full Article: Source

Headwinds ahead for commodities as economic growth stalls

Posted on 05 July 2016 by VRS  |  Email |Print

While commodities such as base metals and oil have rallied in the wake of the June 23 Brexit vote, analysts at banks including Barclays, Citi, Bank of America, JP Morgan and Bank of China International have warned that the referendum result could lead to weaker global growth that will threaten underlying raw materials demand.
The commodities markets have so far proven resilient since the landmark referendum, particularly in China, where “there is not a single major commodities futures market where prices are trading lower than they were prior to the Brexit vote”, as Barclays analysts pointed out on Monday July 4………………………………………..Full Article: Source

Oil leads robust gains for commodity prices this year

Posted on 01 July 2016 by VRS  |  Email |Print

Total returns for a basket of 22 raw materials are over 20% since the start of January. Oil prices have risen around 34 per cent in the last six months, on target for the best start to the year since 2009 and helping commodities outperform other major asset classes during the first half of the year.
Data show total returns from the Bloomberg Commodity Index, which tracks returns from 22 raw material contracts, are over 20 per cent. This compares to global bonds, at about 9 per cent, and global equities that are down almost 3 per cent………………………………………..Full Article: Source

Basic Materials: Recent Commodity Rallies Leave Few Opportunities

Posted on 01 July 2016 by VRS  |  Email |Print

Optimism continues to reign in the basic materials sector year to date, but investors are overestimating the sustainability of recent commodity price rallies. The basic materials sector remains severely overvalued, with a market-cap weighted price/fair value estimate of 1.26 as of May 31.
The reasons for rallies in steel, iron ore, and gold differ, but we don’t expect any of the price gains to hold. Limited impact from steel trade cases and significant oversupply will bring pain to steelmakers and iron ore miners, respectively, in the second half of 2016. The recent Brexit vote helped extend the 2016 gold rally as interest rate hikes are potentially delayed through the second half of the year……………………………………….Full Article: Source

Saudi Arabia Is Changing Its Tone In The Oil Market

Posted on 27 June 2016 by VRS  |  Email |Print

Saudi Arabia is talking the oil market up lately. That’s a big change from a few months when it was talking the market down. In fact, Saudi Arabia has been doing much more than talking the oil market up – it has been hiking oil prices.
It was back in February when Ali al-Naimi, Saudi Arabia’s petroleum minister at the time, told American frackers publicly that they would be crushed by the market. By an oil oversupply, that is, due to the fact that they didn’t have the cost structure to survive an on-going price war that threatened to take oil close to $20………………………………………..Full Article: Source

Has the Oil Market Finally Bottomed?

Posted on 27 June 2016 by VRS  |  Email |Print

Ever since oil prices started tumbling in late 2014, oil executives, analysts, and investors have been wondering when the market will finally hit rock bottom. While there have been many guesses over the past two years, the data is starting to suggest that the market could have bottomed out during the second quarter. At least that is the view of oil-field services giant Schlumberger.
At a recent industry conference, Patrick Schorn, Schlumberger’s president of 0perations, detailed what the company is seeing in the oil market. He started off by noting that market conditions during the second quarter were as bad as it expected………………………………………..Full Article: Source

Gold: Why You Should(n’t) Care About Brexit

Posted on 23 June 2016 by VRS  |  Email |Print

Right now, global markets are dancing to the Brexit beat. Traders plow money into equities and sell gold every time a poll leans toward the UK staying in the EU. Fifteen minutes later they are reversing because a poll says it’s a tossup. We feel if you are invested in Gold you shouldn’t care. If you are trading Gold you should.
First: let’s quickly look at the logic behind the market’s gyrations on Brexit perception. The UK Leaves: GBP Gets Slammed- Sterling devalues quickly from what can best be called “separation anxiety”. Stocks are Sold- in a riskoff frenzy. Gold Rallies- as a hedge against uncertainty………………………………………..Full Article: Source

Rosneft’s Sechin says Saudi Arabia, U.S. and Russia call shots on oil markets

Posted on 22 June 2016 by VRS  |  Email |Print

Igor Sechin, the head of Russia’s top oil producer Rosneft, said on Tuesday that Saudi Arabia, the United States and Russia were the three main players on global oil markets, dismissing again OPEC’s role as a regulator. He told Rossiya-24 TV that Russia’s role in hydrocarbon markets will strengthen.
Russia is the world’s top oil and natural gas producer, pumping oil at around 10.8 million barrels per day. It plans to at least keep production of crude oil, its chief export commodity, at the current level………………………………………..Full Article: Source

Oil prices under pressure as hedge funds adjust positions: Kemp

Posted on 21 June 2016 by VRS  |  Email |Print

Hedge funds cut their net long position in the main crude futures and options contracts by 63 million barrels, 10 percent, in the week to June 14, as the rally in oil prices showed signs of running out of steam.
The one-week reduction in the net long position was the largest since July 2014, according to an analysis of data published by the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange. Hedge funds and other money managers cut their combined net long position in the three main Brent and WTI futures and options contracts from a near-record 633 million barrels to 570 million………………………………………..Full Article: Source

Nigeria floats its currency

Posted on 17 June 2016 by VRS  |  Email |Print

Bare shelves in supermarkets and soaring inflation would worry any central-bank governor. For Godwin Emefiele in Nigeria, the added twist is that both problems are partly his fault. The central bank’s policy of trying to maintain the value of the naira, Nigeria’s currency, in the face of a slump in the price of oil, which used to account for about 90% of the country’s export earnings, has failed miserably. Now it is being scrapped.
Emefiele tried heroically to conserve the country’s dwindling reserves of foreign exchange. In effect, he banned the import of a huge range of goods, from tinned fish to toothpicks; arbitrarily rationed the supply of dollars from the central bank to importers; and threatened to clamp down on people trading dollars on the black market………………………………………..Full Article: Source

OPEC Has Its Way as China Oil Output Cut by Most in 15 Years

Posted on 14 June 2016 by VRS  |  Email |Print

China’s crude production dropped by the most in 15 years in another sign that OPEC’s strategy of flooding markets to drive out higher-cost suppliers is working in the world’s biggest energy consumer.
The Asian nation reduced oil output in May by 7.3 percent from a year ago to 16.87 million metric tons, according to data from National Bureau of Statistics released on Monday. That’s the biggest decline since Feb. 2001………………………………………..Full Article: Source

FAO sees stable commodity prices amid abundant production

Posted on 13 June 2016 by VRS  |  Email |Print

The global food commodity markets are on a stable path for the year ahead, with solid production prospects and abundant stocks pointing to a broadly stable outcome for prices and supplies, the Food and Agriculture Organisation says.
In its biannual Food Outlook, FAO says lower food prices than last year means that the world’s food import bill are on course to fall to $986 billion this year — below $1 trillion for the first time since 2009 — even as traded volumes increase………………………………………..Full Article: Source

Should Western Steelmakers Exit the Commodity End of the Market?

Posted on 10 June 2016 by VRS  |  Email |Print

It’s not an unreasonable question. Certainly in Europe, few if any steelmakers are making any money. Capacity utilization is woefully low forcing steelmakers to fight for sales and depriving them of any price-setting opportunities.
Steelmakers and much of the media lay the blame on China’s doorstep. Although over half of China’s major producers made losses in 2015, exports soared by 20% to 112 million metric tons last year, more than the total output of the world’s second-largest producer, Japan………………………………………..Full Article: Source

Saudi Arabia sets 2030 oil, gas targets

Posted on 08 June 2016 by VRS  |  Email |Print

Saudi Arabia’s cabinet approved a new economic plan Monday to diversify state revenue in the world’s largest crude oil exporter away from oil by 2030. It also set oil and gas production-capacity targets for the period.
The National Transformation Program elaborates on the Vision 2030 document released in April as the brainchild of Deputy Crown Prince Mohammed bin Salman, the son of the Saudi monarch, Salman bin Abdul Aziz. The deputy crown prince has chaired the Council for Economic and Development Affairs since his father’s accession to the throne………………………………………..Full Article: Source

Gold Ends Near Steady Amid Chart Consolidation

Posted on 08 June 2016 by VRS  |  Email |Print

Gold prices ended the U.S. say session near unchanged levels Tuesday, amid mild profit-taking pressure and some normal backing and filling on the charts following recent good gains. The gold market bulls still possess the overall near-term technical advantage.
That means the path of least resistance for prices in the near term will remain sideways to higher. August Comex gold was last up $0.10 an ounce at $1,247.60. July Comex silver was last down $0.017 at $16.43 an ounce………………………………………..Full Article: Source

Iran’s Zanganeh says OPEC ‘friends’ dumping crude oil

Posted on 07 June 2016 by VRS  |  Email |Print

Iranian oil minister Bijan Zanganeh accused its regional neighbors of trying to take away its customers by offering cheaper oil, but said despite not offering much of a price discount itself, Iran had managed to retake 1 million b/d.
Iran’s crude is similar to Iraq and Saudi Arabia’s and these producers fight for a share of the same market — being competitive has proved a huge marketing challenge. Zanganeh’s remarks come in an interview with S&P Global Platts in Vienna Friday, the day after OPEC’s meeting in the Austrian capital………………………………………..Full Article: Source

Saudi, Iran set to clash over OPEC oil output targets

Posted on 02 June 2016 by VRS  |  Email |Print

OPEC is set for another showdown between rivals Saudi Arabia and Iran when it meets on Thursday, with Riyadh trying to revive coordinated action and set a formal oil output target but Tehran rejecting the idea.
Tensions between the Sunni-led kingdom and the Shia Islamic Republic have been the highlights of several previous OPEC meetings, including in December 2015 when the group failed to agree on a formal output target for the first time in years………………………………………..Full Article: Source

Iran’s oil already factored in, minister says

Posted on 02 June 2016 by VRS  |  Email |Print

The global market for crude oil is moving closer toward balance, suggesting Iran’s return had already been factored in, the country’s oil minister said. Total crude oil production from members of the Organization of Petroleum Exporting Countries for April, the last full month for which data are available, was 32.4 million barrels per day, about 180,000 bpd higher than for March. Increased production from member states Iraq and Iran offset declines in Kuwait and Nigeria.
According to OPEC’s latest figures, Iranian crude oil production for April of 3.4 million bpd was 20 percent higher than the average for the fourth quarter of 2015. Iranian Oil Minister Bijan Zangeneh said exports, meanwhile, have doubled, but that increase in supply has not pushed crude oil prices lower………………………………………..Full Article: Source

Copper, Mining Shares Drop as China Factory Data Dims Outlook

Posted on 02 June 2016 by VRS  |  Email |Print

Copper dropped and mining stocks led by Freeport-McMoRan Inc. retreated after a Chinese factory gauge contracted and the OECD warned that the global recovery is set to stall this year.
A private index Wednesday showed a 15th straight month of contraction in May for Chinese manufacturing, while the Organisation for Economic Cooperation and Development said the world economy is slipping into a self-fulfilling “low-growth trap.” Manufacturing in the 19-nation euro area barely grew last month………………………………………..Full Article: Source

Nickel prices rise as workers vote for strike action at South32’s Cerro Matoso

Posted on 01 June 2016 by VRS  |  Email |Print

A strike at South32’s Cerro Matoso nickel project in Colombia will provide short-term support to nickel prices and further tighten the ferro-nickel market if it goes ahead in mid-June, market participants told Metal Bulletin.
Workers at the Cerro Matoso ferro-nickel mine in Colombia have voted in favour of strike action, unless a dispute over wage negotiations is resolved before June 14, Bloomberg reported yesterday. In February, South32 said it will be restructuring the Cerro Matoso operation, targeting a 30% cut to its running costs to $8,600 per tonne, and an 18% reduction in staff and contractor headcount at the mine……………………………………….Full Article: Source

Iron ore heads down again — Lower for longer?

Posted on 31 May 2016 by VRS  |  Email |Print

The world’s biggest iron ore miners believe that the recent rally in the price of the commodity will not last, because, while demand remains mostly flat, they have committed to maintaining or increasing their supply.
The price of iron ore, a key raw material to make steel, has fluctuated wildly so far this year, with the Northern China benchmark price plunging to a 10-year low of $39.30 per metric ton in January, a fraction of the commodity’s record high of $188 a ton in February 2011………………………………………..Full Article: Source

Saudi Arabia Aims to Protect Share of Global Oil Market

Posted on 27 May 2016 by VRS  |  Email |Print

Saudi Arabia is not politicizing the oil problem and is acting solely on economic reasoning in discussion of oil prices and production output, Saudi Foreign Minister Adel al-Jubeir said Thursday. In an interview with Russia Today television, al-Jubeir dismissed assertions that Riyadh was using the oil issue to achieve political goals and insisted that Saudi Arabia approached the current situation on the global oil market solely from the economic standpoint.
“The market determines the oil price depending on demand and offer. The goal of Saudi Arabia is to protect its share of the market and not to support producers that have high oil prices,” the minister stressed………………………………………..Full Article: Source

Gold likely to see speculative unwinding: S&P Global Platts survey

Posted on 27 May 2016 by VRS  |  Email |Print

Market participants expect the US dollar gold price to head lower over the next week, with signals from the US Federal Reserve on a possible rate hike and speculative unwinding the likely key drivers, the S&P Global Platts Gold Sentiment Survey indicated this week.
The poll of 20 industry participants showed that the majority of those who responded were bearish on the outlook for the gold price over the course of the coming week. This is the second week of the market being polled, and like the first week it shows lower price forecasts………………………………………..Full Article: Source

5 key issues OPEC must wrestle with at its June meeting

Posted on 26 May 2016 by VRS  |  Email |Print

The oil market has given members of the Organization of the Petroleum Exporting Countries a reason to crack a cautious smile at next week’s meeting in Vienna. Signs of a more stable oil market have emerged since the cartel members last held a regularly-scheduled meeting. Oil prices have gained more than 30% so far this year, with West Texas Intermediate crude oil trading at its highest price in seven months in early trade Wednesday on the New York Mercantile Exchange, surpassing $49 a barrel.
Global production is on the decline following a larger-than-expected weekly decline in crude supplies, according to a report from the American Petroleum Institute late Tuesday………………………………………..Full Article: Source

Iran-Saudi row threatens any OPEC deal, puts role in question

Posted on 26 May 2016 by VRS  |  Email |Print

OPEC’s thorniest dilemma of the past year - at least from a purely oil standpoint - is about to disappear. Less than six months after the lifting of Western sanctions, Iran is close to regaining normal oil export volumes, adding extra barrels to the market in an unexpectedly smooth way and helped by supply disruptions from Canada to Nigeria.
But the development will do little to repair dialogue, let alone help clinch a production deal, when OPEC meets next week amid rising political tensions between arch-rivals Iran and oil superpower Saudi Arabia, OPEC sources and delegates say………………………………………..Full Article: Source

Saudi Oil Policy Is Set In Stone

Posted on 25 May 2016 by VRS  |  Email |Print

Next week, OPEC will hold its first meeting since talks on freezing production between the bloc’s major producers and their non-OPEC peers fell apart in April. The June 2 convention will also mark the first time OPEC members have come together in Vienna since Saudi Oil Minister Ali al-Naimi stepped down, making way for Khalid al-Falih to take his place.
Both events have raised questions about what direction Riyadh’s oil policies will take in the months ahead, and how they will affect the kingdom’s relationships with its fellow producers………………………………………..Full Article: Source

The Market May Crowd Out the OPEC Cartel

Posted on 24 May 2016 by VRS  |  Email |Print

Daniel Yergin’s excellent “Where Oil Prices go From Here” (op-ed, May 16) suggests that shale-oil production in the U.S. will increase once the world’s crude-oil supply and consumption return to balance later this year. This is a very optimistic scenario as it is unlikely that the Saudis will reverse their production policy.
Market forces will also ensure that other members of OPEC will start increasing production rather than sticking to their quotas. This is happening with Saudi Arabia, which is likely to produce 12 million barrels a day within 18 months to counteract the increasing surge in Iranian production. Venezuelan production will also increase within a few years after there is a more oil-company friendly government in power………………………………………..Full Article: Source

Greenback To Pressure Commodities

Posted on 23 May 2016 by VRS  |  Email |Print

The US dollar will now be the major driver for commodity prices after last week’s rather blatant move by the US Federal Reserve to return a rate rise to centre stage. While an increase is possible at next month’s Fed meeting, the July and September meetings look more likely candidates.
For that reason the US dollar will reverse its recent weakness and start rising - and will put downward pressure on commodity prices. The only exception will be the vote on June 23 about UK membership of the EU. A vote to leave would see a sell-off in sterling, a surge in the greenback and also gold. A vote to remain in the EU will see markets quickly focus on the July meeting of the Fed for a rate rise (if there is no increase at the June meeting a week before the EU vote in Britain)………………………………………..Full Article: Source

Iran Won’t Freeze Oil Output Before OPEC Meeting

Posted on 23 May 2016 by VRS  |  Email |Print

Iran, which is due to meet with OPEC partners on June 2, has no plan to join any freeze in crude output as the country won’t be done ramping up oil exports to pre-sanctions levels before the second half of the year, the head of the state oil company said.
The Persian Gulf state’s oil exports will likely surpass 2.2 million barrels a day by the middle of the summer, Rokneddin Javadi, managing director of National Iranian Oil Co., told Mehr news agency. Iran last exported at this level before sanctions were imposed on the country for its nuclear program more than four years ago. Sanctions were eased in January, and Iranian officials said they won’t discuss any output freeze or cut before reaching pre-sanctions levels………………………………………..Full Article: Source

Huge Trend Changes Point To Something Big In The Gold Market

Posted on 20 May 2016 by VRS  |  Email |Print

Very few precious metals investors realize how recent trend changes will greatly impact the gold market going forward. The reason many investors fail to grasp the huge change in the gold market is that they look at data or information on an individual basis. To really understand what is going on, we must look at how all segments of the market compare to each other… a BIRD’S EYE VIEW.
Let’s start off with one segment of the gold market that has changed significantly in the past 15 years. The Global Gold Hedge Book hit a peak of nearly 3,100 metric tons (mt) in 1999: Here we can see that after the Global Gold Hedge Book peaked in 1999, it fell to a low at a little more than 100 mt in 2013………………………………………..Full Article: Source

Oil outages speeding up new world energy order

Posted on 19 May 2016 by VRS  |  Email |Print

The world’s oil market is rebalancing faster than expected due to several serious outages, but for now there is enough oil in storage and excess capacity to keep prices from spiking.
“We’ve strung together an impressive number of outages and supply disruptions for the moment, but there’s every incentive in the dire straits the industry’s been in to get these barrels on line,” said John Kilduff, partner with Again Capital………………………………………..Full Article: Source

China goes cold on platinum jewellery, crimping world demand

Posted on 16 May 2016 by VRS  |  Email |Print

China’s penchant for luxury platinum jewellery is fading despite lower global prices, leaving world demand for the metal exposed to sharper decline. China is by far the biggest market for platinum jewellery, making up more than 60 percent of global manufacturing use for the white metal in 2015.
A close to double-digit drop in Chinese platinum jewellery demand is expected this year, GFMS analysts said ahead of the industry gathering London Platinum Week, which starts on Monday. This follows a seven percent drop in Chinese buying in 2015 fed into a four percent decline in global demand for jewellery made from the metal………………………………………..Full Article: Source

Price of Gold Will Rally in 2016 Thanks to These 2 Bullish Trends

Posted on 13 May 2016 by VRS  |  Email |Print

There are two reasons why prices will continue higher in 2016. But first, here’s the newly revealed trend that’s pushing the gold price higher today…This Is Why the Price of Gold Is Surging in 2016: A report from the World Gold Council (WGC) today shows gold demand is rising faster than ever.
During the first three months of 2016, demand for the metal soared 21%. Investors piled into gold due to worries of a global slowdown and market volatility. Gold demand in Q1 2016 totaled 1,289.90 tons. That’s a huge 21% increase from 1,070.40 tons last year………………………………………..Full Article: Source

Demand for gold skyrockets, but skepticism remains

Posted on 13 May 2016 by VRS  |  Email |Print

Gold fever is back, a sign of investors’ growing – but perhaps misplaced – anxiety about what lies ahead for the global economy. The World Gold Council, the marketing arm of the gold industry, announced on Thursday that demand for the precious metal hit its second-highest level on record during the first quarter of the year.
Meanwhile, Bank of Montreal analysts boosted their forecast for gold. They say they now expect the metal to begin next year at around $1,400 (U.S.) an ounce. That is well above its current level of roughly $1,270 and far ahead of the bank’s previous forecast of $1,200………………………………………..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

Commodities fall back to earth on China worries

Posted on 10 May 2016 by VRS  |  Email |Print

Commodities from copper to iron ore fell sharply on Monday, as a speculative rally lost steam over fresh worries about economic growth in China, the world’s biggest consumer of raw materials.
A burst in speculative trading that drove up commodity prices over the past month has led to increased production and a build-up of inventory in the country, the world’s largest consumer of commodities. Traders are now growing concerned that real demand is not there to support prices………………………………………..Full Article: Source

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