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Misconceptions About Gold

Posted on 18 February 2015 by VRS  |  Email |Print

Few markets are as widely misunderstood and subject to as many misconceptions as the gold market. Many of these misconceptions stem from gold’s dual characteristics as a commodity and money. Is it actually correct to claim that “gold is money”? After all, it is not used as official money anywhere and barring isolated instances of payments made from digital gold accounts, it is unlikely that one will ever make payments in gold these days.
In addition to this, central banks have been intent on “demonetizing” gold, and many of the biggest central bank holders of gold (except the US) have unloaded their gold reserves for years, ostensibly in order to earn the higher returns provided by bonds. It has always struck us as odd that they would be selling gold for this reason………………………………………..Full Article: Source

25% of physical gold buyers are crazy, metals executive says

Posted on 13 February 2015 by VRS  |  Email |Print

A lot of people who buy bits of physical gold aren’t looking to make a bracelet or ring. They buy gold because they believe disaster is imminent. These investors are convinced gold will spike to $10,000 an ounce (it’s currently around $1,225) when the U.S. government implodes, said Peter Hug, an executive at metals retailer Kitco.
Hug calls these people “crazies” and says they form a substantial amount of the U.S. physical gold market — at least 25%. It’s no secret that gold has long been viewed as a form of insurance against disaster. The thinking is that even if the financial or political system collapses, gold will still hold value………………………………………..Full Article: Source

Rosneft’s Sechin Accuses OPEC of ‘Destabilizing’ Oil Market

Posted on 11 February 2015 by VRS  |  Email |Print

The head of top Russian oil producer Rosneft on Tuesday criticized OPEC policy and warned lower oil output as a result of falls in crude prices may lead to a supply shortage as early as the fourth quarter. Igor Sechin, speaking at the International Petroleum Week industry forum in London, said producer group OPEC had “lost its teeth” and its policy had led to “destabilization” of the oil market.
Oil prices collapsed in 2014 in a decline that deepened after the Organization of the Petroleum Exporting Countries in November shifted strategy and chose not to cut its own output. The 12-country group instead moved to retain its market share, which has been eroded by rival supply sources such as U.S. shale oil………………………………………..Full Article: Source

Is OPEC winning an oil price war against the US?

Posted on 10 February 2015 by VRS  |  Email |Print

The latest oil market report from the Organization of the Petroleum Exporting Countries paints a not-so-rosy picture for US drillers under pressure from lower oil prices. But even OPEC admits that US oil production has remained surprisingly stable despite collapsed oil prices and cutbacks in US energy.
Demand for oil from the Organization of the Petroleum Exporting Countries is set to rise this year, while growth in US oil production will slow as American energy firms cut back on drilling. That’s the conclusion of the latest monthly oil report from OPEC, the 12-member oil cartel that accounts for about 40 percent of the world’s oil production. If the forecasts prove true, it suggests that OPEC is winning an undeclared price war against a growing rival: namely, the US………………………………………..Full Article: Source

Big oil is not the biggest victim of cheap crude

Posted on 05 February 2015 by VRS  |  Email |Print

If only oil-producing countries that got into trouble could merge, bring in fresh management, lay off citizens, cut costs and restructure their operations. At this point in the energy cycle, betting on a national merger wave similar to the corporate one that created supermajors such as ExxonMobil and BP in the late 1990s would be a good investment.
Brazil could merge with Venezuela, helping to solve both the Petrobras scandal and the latter’s lurch toward default. The United Arab Emirates or Saudi Arabia could roll up Nigeria and Russia. Norway could acquire Scotland from the UK………………………………………..Full Article: Source

Believe it or not, oil is in a bull market

Posted on 04 February 2015 by VRS  |  Email |Print

It doesn’t feel like a bull market. But by the accepted rule of thumb, the recent rise in the price of a barrel of Brent crude oil is just that. Moves of at least 20% in either direction commonly define things as being in bull- or bear-market territory.
At the time of writing, the price of Brent, the international oil benchmark, is up 25% from its low point last year, thanks to a 7% jump today. But if you’re breaking out the champagne, drink responsibly. From its 2014 high, the price of the international oil benchmark is still down by some 50%………………………………………..Full Article: Source

Standard Bank considers 2015 a tough year for commodities (Video)

Posted on 03 February 2015 by VRS  |  Email |Print

Standard Bank has said it considers 2015 to be a tough year for commodities, favouring precious and base metals over bulk for the next three years. The bank released its 2015 mining outlook ahead of the Indaba taking place in Cape Town next week. CNBC Africa’s Christine Mhundwa caught up with Rajat Kohli, global head of mining and metals at Standard Bank for more.……………………………………….Full Article: Source

Do Commodities Belong in Your Portfolio?

Posted on 02 February 2015 by VRS  |  Email |Print

Equities are far from the only investing game in town. Gold and other commodities, like corn, beef, oil and natural gas can have much appeal for not only the sophisticated investor, but the average Jane and Joe. “Anyone can invest in gold and silver, regardless of income. We have clients who have begun accumulating precious metals through payroll deductions as little as $10 per pay period, alongside people who have invested over $1 million in gold and silver,” says Josh McCleary, chief operating officer of Mass Metal.
“Investing in commodities is much easier than it has been prior to the last decade. Prior to that period, you would need to invest in futures contracts in order to get exposure to commodity prices. While you could invest in companies that produced those commodities, direct exposure was only available via the futures market,” says Kirk Chisholm, wealth manager and principal with Innovative Advisory Group………………………………………..Full Article: Source

India reclaims top spot as No. 1 gold consumer

Posted on 02 February 2015 by VRS  |  Email |Print

India is back to being the number one consumer of gold, knocking China off the top of the podium as the country that consumed the most bullion in the form of gold bars, coins and jewelry, in 2014. The latest update of the annual study by GFMS of world gold supply and demand found that sliding demand from China – which grabbed the top gold consumer mantle from India in 2011 – is behind the shift.
The report by GFMS analysts at Thomson Reuters showed that Chinese gold demand dropped by over a third to a four-year low of 866 tonnes, while scrap gold supply rose to a new high of 182 tonnes………………………………………..Full Article: Source

Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Posted on 30 January 2015 by VRS  |  Email |Print

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up.
It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist, explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist. Global crude oil production has only fallen in six years since 1984 and then generally as a result of geopolitical disruptions to supply or restraint by OPEC, rather than as a reaction to price………………………………………..Full Article: Source

How far will OPEC go?

Posted on 30 January 2015 by VRS  |  Email |Print

If you are a business-news junkie like me, you could hardly miss the trends of the past two months that presumably predict the 2015 economy. Before the holiday season and on into January, retailing was a priority fiscal indicator. Now we have oil production as a runner-up for the most crucial headline of the day.
I already vented my dismay over the emphasis of shopping for deals on Thanksgiving Day and the public’s apparent monthlong need to storm the stores and crowd the Internet right up to Christmas Day in my Jan. 1 column (“Spirit of Christmas centers on malls”). Despite my reaction to commercial exploitation of family traditions, the retailers loved it………………………………………..Full Article: Source

Consensus forecast 2015 gold price average: DOWN

Posted on 30 January 2015 by VRS  |  Email |Print

Gold on Thursday plunged more than $30 an ounce as eurozone troubles fade from headlines and the focus shifts to US fundamentals, the rampant dollar and a likely June rise in interest rates.In heavy trade of more than 22m ounces by lunchtime in New York, gold for delivery in April fell over $35 an ounce or 2.8% from Wednesday’s close hitting a low of $1,251.84 an ounce – the lowest in two weeks and the worst trading day in more than a year.
The metal is still trading up nearly $70 or almost 5.5% in 2015, but is down sharply from an intra-day high of $1,307 hit last week. Gold’s gains this year have been ascribed to safe haven buying amid currency turmoil, a slowing global economy, the continuing fallout of the collapse in oil prices and a crisis in the Eurozone………………………………………..Full Article: Source

Russia buys record amounts of gold

Posted on 30 January 2015 by VRS  |  Email |Print

Russia accounted for about one-third of central banks’ gold purchases last year as the country spent more on the metal than at any time since the break-up of the Soviet Union amid escalating tensions with the west and a collapse in the value of the rouble.
Central banks around the world bought a net 461 tonnes of gold in 2014 — 13 per cent higher than the previous year and the second-highest level since the collapse of the gold standard in 1971 — as they continued to diversify their currency reserves following the financial crisis. They have added 1,800 tonnes to their holdings in the past six years………………………………………..Full Article: Source

Growth in China’s nonferrous metals consumption seen to shrink further

Posted on 30 January 2015 by VRS  |  Email |Print

The growth rate of China’s consumption of nonferrous metals will dip into the single-digit range in 2015 and is expected to fall further in coming years due to the structural challenges facing the sector, Shaanxi Magnesium Industry Group said Thursday, January 29.
The group in a report said surplus supply in the aluminum and copper segments were among the key challenges. The “wave-style” expansion of consumption seen in recent years has ended and traditional markets have become saturated amid the emergence of new technologies, new products and new industry and commercial modes, the group said………………………………………..Full Article: Source

Iraq oil surge to fan OPEC rivalry that triggered slump

Posted on 29 January 2015 by VRS  |  Email |Print

The battle for customers among OPEC members that helped trigger oil’s collapse is about to escalate. Iraqi crude production is climbing from a 35-year high as it adds growing Kurdish supplies to its exports, while southern oilfields remain unscathed by Islamic State militants. Finding buyers for the new output means offering more attractive terms than rivals in the Organization of Petroleum Exporting Countries, say Citigroup, DNB and Barclays.
Oil’s biggest slump in six years gained momentum in October as a wave of discounts by Middle Eastern producers signaled OPEC members were intent on defending market share against booming shale output from the U.S. The price of Saudi crude for Asian buyers was cut to the lowest in at least 14 years last month, a move followed by Iraq, Kuwait and Iran………………………………………..Full Article: Source

Where Is All That Excess Oil Going?

Posted on 29 January 2015 by VRS  |  Email |Print

There’s a term traders use when the price of a commodity like oil has fallen because of oversupply but seems guaranteed to rise again. It’s a market that’s “in contango,” says Brenda Shaffer, an energy specialist at Georgetown University. “It almost sounds like a sort of great oil dance or something.”
And Shaffer says that some oil speculators see an oil market that is in contango in a major way. “Some people out there think that oil is going to get more expensive so it’s worthwhile now to buy oil, lock it in, and have those supplies, have them stored and have them available to sell a few months down the line, if you actually believe it’s going to go up,” she says………………………………………..Full Article: Source

Industrially exposed precious metals are looking attractive relative to Gold

Posted on 29 January 2015 by VRS  |  Email |Print

The ECB’s commitment to create inflation, if successful, should benefit gold but it could be more beneficial to the other more industrial cyclical commodities and precious metals , most notably platinum, said ETF Securities.
Despite nearing recession, European auto sales increased 1.4% in 2014 which was the first annual increase since 2011 (see chart on page 2). Pent up demand appears at play as vehicles last only so long. Platinum is the primary catalyst for diesel vehicle emission controls and Europe is the world’s largest diesel market………………………………………..Full Article: Source

Turkey is microcosm of int’l gold market: Council

Posted on 28 January 2015 by VRS  |  Email |Print

Gold plays a huge role in Turkish consumers’ lives and the economy, making the country the world’s fourth largest gold consumer, says a new report by the World Gold Council. At an average of 181 tons per annum over the past 10 years, Turkey is the world’s fourth largest consumer of gold, accounting for around 6 percent of global consumer demand.
The “Turkey: Gold in Action” report, published on Jan. 22, described Turkey as a “microcosm of the global gold market” as it is home to the entire gold value chain from mining and refining, to jewelry design and investment………………………………………..Full Article: Source

Has China’s base metals import appetite peaked?

Posted on 27 January 2015 by VRS  |  Email |Print

Not so very long ago base metals bulls marched to the beat of the monthly release of China’s trade figures. The country’s import appetite was seemingly insatiable as it sucked in ever-increasing volumes to feed its booming infrastructure and property programmes.
Not any more, though. Net imports of refined aluminium, nickel, zinc and tin all fell last year, some of them precipitously. China isn’t a net importer of refined lead at all, a steady flow of exports helping explain why this particular market is so out of favour with investors right now………………………………………..Full Article: Source

Oil prices will normalise soon: OPEC

Posted on 22 January 2015 by VRS  |  Email |Print

The current slump in oil prices will be short-lived, OPEC’s secretary-general said, defending the oil-producing group’s November decision not to cut its production. “I tell you, the price will rebound and we will go back to normal very soon,” Abdalla Salem el-Badri said while speaking at the World Economic Forum in Davos, Switzerland.
Oil prices have fallen more than 50 per cent since June amid surging production in the US and steadfast output from the Organization of the Petroleum Exporting Countries, despite an increasingly sluggish demand picture. In the past, OPEC has cut its output to prop up oil prices, but Mr el-Badri said the producer group couldn’t keep cutting back to prop up non-OPEC suppliers………………………………………..Full Article: Source

Economists Predict Africa’s Growth to Go Beyond Oil, Commodities in 2015

Posted on 20 January 2015 by VRS  |  Email |Print

Economic experts from across the African continent say this may be an exciting year for African economies, which could be ready to move out of their traditional roles and into new sectors. African nations have struggled for decades to go beyond their role as providers of basic raw materials, like oil, gas, minerals and agricultural products.
Their efforts have had mixed success. While nations like South Africa and Kenya have managed to diversify their economies, others, like Angola and Nigeria, are largely known to investors as energy sources………………………………………..Full Article: Source

Iran sees no OPEC shift toward a cut, says oil industry could withstand $25 crude

Posted on 20 January 2015 by VRS  |  Email |Print

Iran sees no sign of a shift within OPEC toward action to support oil prices, its oil minister said, adding its oil industry could ride out a further price slump to $25 a barrel. The comments are a further sign that despite lobbying by Iran and Venezuela, there is little chance of collective action by the 12-member OPEC to prop up prices - entrenching the reluctance of individual members to curb their own supplies.
In remarks posted on the Iranian oil ministry’s website SHANA, Oil Minister Bijan Zanganeh called for increased cooperation between members of the Organization of the Petroleum Exporting Countries………………………………………..Full Article: Source

OPEC sees 2015 supply surplus rising, even as oil slump slows shale boom

Posted on 16 January 2015 by VRS  |  Email |Print

The collapse in oil prices is starting to slow growth in U.S. output, OPEC said on Thursday, although the slowdown will not prevent an increasing global surplus in 2015 and demand for the exporter group’s oil falling to its lowest in a decade.
In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) forecast demand for the group’s oil would drop to 28.78 million barrels per day (bpd) in 2015, down 140,000 bpd from its prior estimate and well over 1 million bpd less than it is currently producing………………………………………..Full Article: Source

The end of OPEC as we have known it is here

Posted on 15 January 2015 by VRS  |  Email |Print

Unless oil prices fall so low that it forces oil fields to shut down and investors to abandon drilling projects, expect prolong chaos in the market for oil, says George L. Perry, senior fellow at Brookings Institution.
Early last Fall, when oil prices had fallen by about $25 a barrel and it became clear the decline was more than a temporary blip, the big question was how far prices would fall? And that would depend on whether and when Saudi Arabia and its partners at the Organization of the Petroleum Exporting Countries would support the world oil price by cutting their own production………………………………………..Full Article: Source

It’ll again be a buyers’ market for gold in ‘15 as US rate hikes seen

Posted on 15 January 2015 by VRS  |  Email |Print

Gold will extend losses this year as US interest rates increase, providing an opportunity for investors to buy the metal to benefit from a rebound spurred by Asian demand, according to Barclays.
“We expect gold prices to test new lows in 2015,” analysts Suki Cooper and Kevin Norrish wrote in a report dated yesterday (Monday), predicting that prices will drop to less than $1,130 an ounce. “The lows of this year and next are likely to offer attractive entry-level prices for the longer-term investor.”……………………………………….Full Article: Source

OPEC vs. U.S.: Who will blink first on oil?

Posted on 14 January 2015 by VRS  |  Email |Print

The Merriam-Webster dictionary offers this definition for the word capitulate: “to stop fighting an enemy or opponent; to admit that an enemy or opponent has won.” I’m not sure who oil companies are fighting, whether it’s oil traders, OPEC, Russia, or some invisible market force, but they’re losing. The domestic standard, West Texas Intermediate crude oil, fell below $45 per barrel on Tuesday, while the global standard, Brent crude oil, is now well under $50.
Who is going to stop the bleeding? OPEC is not cutting production, the U.S. is expected to increase output in 2015, and Russia has little choice but to sell whatever crude oil it can just to make money. But someone will have to capitulate if these players aim to halt the slide in oil prices………………………………………..Full Article: Source

Gold, Silver more prone to risks in 2015: Barclays

Posted on 13 January 2015 by VRS  |  Email |Print

Gold and silver are prone to further downside risk in 2015 but lower PGM prices are likely to prove to be good buying opportunities, according to the latest report by Barclays.
The report says the macro environment is likely to be pivotal for the precious metals in 2015, in particular given the expectation that the dollar may strengthen and for the first rate hike in June. This dynamic is likely to present significant headwinds for gold that has potential to weigh upon the rest of the precious metal complex, the report said………………………………………..Full Article: Source

Oil Declines From 5 1/2-Year Low as OPEC Members Seek Recovery

Posted on 12 January 2015 by VRS  |  Email |Print

Oil extended losses from the lowest level in more than 5 1/2 years as Venezuela and Iran called for members of the Organization of Petroleum Exporting Countries to work together to assist in a recovery of the crude market.
Futures slid as much as 1.5 percent in London after a seventh weekly drop. Prices need to return to $100 a barrel for economic equilibrium, Venezuelan President Nicolas Maduro said in comments broadcast on state television during a tour of OPEC producers in the Middle East………………………………………..Full Article: Source

Facts and fantasies about commodities

Posted on 09 January 2015 by VRS  |  Email |Print

Commodities were the worst performing asset class for the third year running in 2014. Investors, including some of the world’s largest pension funds, have seen billions of dollars of wealth disappear as a result of investing in commodity index products over the last decade.
So it is essential to understand what went wrong to help prevent a similar problem recurring in future. “Facts and fantasies about commodity futures,” first published in 2004 by Gary Gorton and Geert Rouwenhorst, proved one of the most influential research papers in 21st century finance………………………………………..Full Article: Source

OPEC Finds Everyone Else Guilty in Oil-Glut Blame Game

Posted on 09 January 2015 by VRS  |  Email |Print

When OPEC blames everyone else for a glut that’s sent oil prices to the lowest in 5 1/2 years, it’s not without some merit. The CHART OF THE DAY shows crude production in the U.S. increased 75 percent over the past 5 years while output from the Organization of Petroleum Exporting Countries grew 5 percent.
Canada boosted supplies by 42 percent while Brazil pumped 24 percent more, according to data from New York-based Energy Intelligence Group. Brent crude collapsed by 48 percent in 2014, its biggest price slide since 2008, as OPEC resisted calls to cut output amid a global surplus that Qatar estimates at 2 million barrels a day………………………………………..Full Article: Source

Rare Earths and Technology Metals – Was 2014 a Lost Year?

Posted on 09 January 2015 by VRS  |  Email |Print

In a space in which there are too many “lost years” of late, we cannot deem 2014 as anything but yet another lost year, especially for the Rare Earth space. Let’s hope it will be the last of such periods. The first half was pretty good with many, including ourselves, calling a turn in fortunes but this was a more generalized improvement linked to a better vibe in the mining space in general.
It was certainly not linked to price appreciation in Rare Earths or indeed, in any of the specialty metals. REE prices remained firmly stuck were they were with the Chinese sending out vibrations that didn’t give much hope for improvement either………………………………………..Full Article: Source

No OPEC Member Has Formally Requested Emergency Meeting

Posted on 08 January 2015 by VRS  |  Email |Print

OPEC members have so far refrained from formally asking for the group to hold an emergency meeting despite Brent oil prices dipping below $50 a barrel for the first time in 5½ years, delegates from the oil cartel said. Brent crude fell below $50 a barrel earlier Wednesday, though it recovered later to around $50.9 per barrel.
The Organization of the Petroleum Exporting Countries, led by its top producer Saudi Arabia, decided in November to keep their production ceiling unchanged, instead of cutting back output to bolster falling prices………………………………………..Full Article: Source

OPEC trying to punish US oil frackers: Kovacevich

Posted on 07 January 2015 by VRS  |  Email |Print

The refusal by OPEC to cut production in the face of prices plunging to 5½-year lows shows the cartel is looking to put a lid on the U.S. fracking boom, former Wells Fargo Chairman and CEO Richard Kovacevich told CNBC on Tuesday.
U.S. crude prices were lower again in early Tuesday trading—below $49 a barrel at one point—following Monday’s 5 percent drop in New York to lows not seen since April 2009. The price collapse has been pressuring stocks, which saw the Dow Jones Industrial Average fall 331 points Monday, the worst session in three months………………………………………..Full Article: Source

Sheiks vs. Shale: the Future of O.P.E.C.

Posted on 06 January 2015 by VRS  |  Email |Print

America enjoys scolding the rest of the world. It certainly enjoys ragging on the Organization of Petroleum Exporting Countries (O.P.E.C.), which the West largely credits for holding the magic wand of setting world oil prices. As the price of crude benchmarks has plunged by nearly 50 percent since June, many commentators are now calling into question O.P.E.C.’s ability to control pricing and bring stability to the markets.
Accordingly, U.S. shale producers and their Wall Street investors are hanging on the every word of O.P.E.C.’s de-facto leader — Saudi oil minister Ali al-Naimi — as if he is either an oracle to be heralded or an untrustworthy demon to be castigated………………………………………..Full Article: Source

Gold Coin Sales Fall as Prices Stagnate

Posted on 06 January 2015 by VRS  |  Email |Print

Sales of gold coins from some of the world’s largest mints declined last year as stable prices discouraged investors and demand declined in Asia. The U.S. Mint and Australia’s The Perth Mint recorded markedly weaker sales of gold bullion coins as the broader market muddled through a year in which gains were capped by expectations for higher interest rates as the U.S. recovery gained steam. Gold is often seen as an alternative store of value during periods of economic uncertainty.
The Perth Mint said it sold 373,351 ounces of gold bullion coins last year, down 28% from 2013. Sales of The U.S. Mint’s American Eagle coins were down 39% at 524,500 ounces………………………………………..Full Article: Source

Gold great value protector in 2014 – silver not

Posted on 06 January 2015 by VRS  |  Email |Print

Are we too focused on gold’s US dollar performance to see its real value for those outside the USA? LBMA Gold price end 2013: US$1 201.50; Gold price end 2014: $1 199.25 – only down a minute 0.19% over the year. Thus, by effectively marking time vis-à-vis the US dollar over the full year gold outperformed virtually all other currencies in maintenance of value.
Frank Holmes of US Global Investors pointed this out neatly with the graph below in a recent article. Indeed its LBMA afternoon price on December 30 at $1 206 was actually 0.4% higher than its 2013 close in US dollars too but something of a dollar rally on the morning of December 31 brought it down a little………………………………………..Full Article: Source

Precious Metals: A Fundamental Review For 2015

Posted on 05 January 2015 by VRS  |  Email |Print

Gold and Silver started 2015 in positive territory, gaining 0.56% and 1.19% respectively. But there are plenty of fundamental headwinds facing precious metals heading into 2015, many that dominated the headlines in 2014. A stronger dollar, slowing global economies, and deflation concerns, to name a few.
Can precious metals regain their luster? Here’s a quick look at spot Gold and Silver prices on the first trading day of the year. As you can see, Gold prices remain under $1200/oz, while silver lingers around $15-$16/oz. In 2014, capital flowed into equities and bonds, and out of commodities. Of the precious metals, Gold fared the best, closing just under break even for the year. On the other hand, Silver joined Crude Oil as commodities that got hit hard. Below is a performance chart of Gold and Silver for 2014………………………………………..Full Article: Source

Known unknowns dim global market outlook

Posted on 05 January 2015 by VRS  |  Email |Print

When you see 2015 financial and commodity markets forecasts that list 10 reasons why those markets will collapse this year, or bring in talk of the Black Death as the most pertinent portent for what is now occurring, it’s probably wise to resist the temptation to stick one’s neck out.
So let us remain content with listing all the known unknowns. First, though, that Black Death thing: with the news that yields on German bonds actually went negative last week, and eurozone governments can now borrow at less that 1 per cent, one commentator argued nothing of this low yield/low interest rate magnitude had been experienced since the 14th century, when England defaulted on Italian loans and the Black Death carried off at least 25 million people………………………………………..Full Article: Source

Expect More Volatility in Gold for 2015 as Interest Rates Rise

Posted on 02 January 2015 by VRS  |  Email |Print

Gold has only fallen 3% on the year as the metal has spent much of 2014 consolidating between $1,200 per ounce and $1,400 per ounce. That consolidation is precisely what investors should continue to expect in 2015, says Eric Zuccarelli, an independent metals trader. Investors should also expect more volatility for the metal in the new year.
Interest rates, which are expected to climb in 2015, will likely put pressure on gold prices, especially with inflation as low as it is, he explained………………………………………..Full Article: Source

Most pundits are wrong. The oil price fall is good news at last

Posted on 22 December 2014 by VRS  |  Email |Print

It looks very much as though 2015 will be a good year for the world economy, after all – and, if it is, that will be thanks to the fall in the oil price. It won’t be good for everyone and we have already seen the pressure it puts on the Russian leadership – though, before you conclude that sometimes there is natural justice in the world, remember that the people who are hurt are not leaders such as Vladimir Putin.
Other oil- and gas-exporting countries are damaged, too, and I think we will see further fallout in unpredictable ways. But the net impact is strongly positive, more so than most commentators at present acknowledge. The winners far outnumber the losers………………………………………..Full Article: Source

Gold still on hold

Posted on 19 December 2014 by VRS  |  Email |Print

Gold prices did not show a huge reaction to the FOMC meeting announcement today in which the Fed appeared to sound more dovish–and perhaps a bit confusing as well. The metal is now hovering around the $1,200 area, and it is likely that no significant changes in price action are seen until the new year.
The central bank left in its language the phrase “considerable time” when referencing interest rate policy and the notion of beginning the tightening cycle. Other parts of the central bank’s statement were considered to be more hawkish, however, and some investors feel that the Fed gave some mixed signals with regards to its intentions………………………………………..Full Article: Source

Opec’s 2015 oil revenues to slump to $446bn - EIA

Posted on 18 December 2014 by VRS  |  Email |Print

The amount Opec countries, excluding Iran, earn from net oil revenues next year is set to tumble to levels not seen for a decade as the dramatic slide in prices shows no signs of relenting.
Forecasts from the US Energy Information Administration - the wealthy nations’ energy watchdog - suggests revenue from oil exports next year will dip to $446bn - down 46 per cent on 2013’s income - as Brent crude is projected to average just $68 a barrel in 2015, compared to $109 a barrel last year…………………………………….Full Article: Source

Saudi Arabia Has its Reason for an Oil Price Drop, Others Need a Plan

Posted on 18 December 2014 by VRS  |  Email |Print

Not all producers will be hurt by a few years of lower prices. Let’s not forget that OPEC’s leading member, Saudi Arabia, has long believed that if oil prices are too high they undermine long-term demand for the country’s main export.
When prices hovered around $100/barrel, oil importing countries in the global north and the faster growing south, poured money into energy diversification and technologies to reduce emissions…………………………………….Full Article: Source

Is the end of QE bearish for gold?

Posted on 17 December 2014 by VRS  |  Email |Print

The conventional view is that Fed money creation is necessarily bullish for gold and that a tightening of monetary conditions beginning with the cessation of Fed money creation is necessarily bearish for gold. It’s strange that this view is popular given that gold was clearly hurt more than helped by the QE program that extended from October of 2012 through to October of this year.
If gold is now going to be hurt by a ‘tighter’ Fed, the implication is that regardless of what the Fed does it’s bearish for gold. If the Fed aggressively pumps money into the economy, it’s bearish for gold. If the Fed stops pumping money, it’s bearish for gold. If the Fed not only stops pumping money but starts hiking interest rates, it’s astronomically bearish for gold!…………………………………….Full Article: Source

Copper to gain on supply constraints

Posted on 17 December 2014 by VRS  |  Email |Print

The metal may inch towards $6,950/tonne. Base metals have witnessed a lot of ups and downs this year due to geo-political tensions arising out Russia -Ukraine standoff in the first half, followed by faltering growth in China during the second half.
Although efforts have been made by the People’s Bank of China, they have not been enough to contain the falling trend in base metals. In addition to this, the euro zone, possibly, slipping into a third recession since the resurfacing of financial crisis, has been a matter of concern……………………………………..Full Article: Source

Global agri-commodities prices likely to remain volatile in 2015

Posted on 16 December 2014 by VRS  |  Email |Print

Agricultural commodities are likely to remain volatile globally in 2015, with strong buying support on lows to keep prices elevated in the first half. However, global oversupply could pull these down in the second half.
A Rabobank study says the fundamentals in agri commodities appear more balanced through 2015, resulting in narrower trading ranges for many commodities versus 2014. On the demand side, growth has slowed in recent years. However, lower price levels should now encourage consumption growth, which will support prices. However, a strengthening dollar, uncertain Chinese demand growth, slowing biofuel demand and weakness in crude oil prices might spoil the party………………………………………Full Article: Source

Natural Gas Tops Commodity Gains as Traders Brace for Cold Month

Posted on 16 December 2014 by VRS  |  Email |Print

Natural gas climbed the most in almost two weeks as traders braced for a colder end of the month than previously forecast. Futures rose as much as 3.7 percent, the most since Dec. 2, making the fuel the best performer among 22 raw materials in the Bloomberg Commodity Index. Colder-than-normal temperatures are expected for the upper Midwest by Dec. 26, for Texas by Dec. 27 and the east coast by Dec. 28, forecaster Commodity Weather Group LLC in Bethesda, Maryland, said in an e-mailed report.
“The market is reacting to new forecasts pointing to a colder end to December,” Moses Rahnama, an analyst at London-based consultants Energy Aspects Ltd., said by e-mail today. “We don’t know how cold it will get, but definitely colder than previously forecast. Models are also pointing to possibly a colder January.”……………………………………..Full Article: Source

Precious Metals Starting To Show Bullish Signs

Posted on 15 December 2014 by VRS  |  Email |Print

We’ve believed that Gold would need to break $1100 before we thought a bottom could start to develop. While that could still be the case, we are starting to see building evidence that precious metals could be forming a bottom.
In the past we’ve written about the importance of Gold’s performance against other asset classes. Relative strength in Gold has preceded important bottoms in the Gold price during 2001, 2005 and 2008. That relative strength is starting to show. Below we plot Gold against various asset classes, which are noted in the chart. Several days ago Gold against foreign currencies (and the EUR) closed at a 15-month high………………………………………..Full Article: Source

Do oil and gold mix?

Posted on 12 December 2014 by VRS  |  Email |Print

Has gold finally bottomed out? And what does its prospects tell us about the outlook for oil? Three weeks ago, you may recall, I reached a bearish conclusion from my array of gold timing indicators that are based on the performance of the top-performing advisers.
Gold today is $33 higher than where it stood then, or 2.8%—largely on the basis of a big rally on Tuesday of this week, when bullion shot up by more than $40 an ounce. Have any of the top performers changed their minds because of recent action? As always in Hulbert On Markets, I turn to the top performers for answers………………………………………..Full Article: Source

Gold forecasts for 2015 - Scotiabank mining panel

Posted on 12 December 2014 by VRS  |  Email |Print

The most direct question to Scotiabank’s gold panel came from the audience at the end of a wide-ranging discussion of the gold market at the bank’s recently held mining conference: where would the price of gold go by the end of 2015?
Most of the panel cringed at the request, but nonetheless made their wagers (or almost so). Andy Montano, ScotiaMocatta director, went first. “If I give you a forecast, I guarantee you one thing it will be wrong,” he said. Still, he added, “I would say right where we are now.” Next up was Marcus Grubb, the World Gold Council’s (WGC) managing director of investment and strategy………………………………………..Full Article: Source

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