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Commodity prices fall 2.4% in September: RBA

Posted on 02 October 2014 by VRS  |  Email |Print

A weakening market for iron ore helped to push export commodity prices down by 2.4 per cent in September to a level 37 per cent below their peak just over three years ago. Australia’s biggest export was the main culprit for the latest monthly fall, measured in foreign currency terms, the RBA said in commentary on its data released on Wednesday.
However prices for base metals and rural commodities also fell. Measured in terms of the Australian dollar, which edged back in September, commodity prices were down by 1.4 per cent in the month………………………………………..Full Article: Source

Oil Prices Hit Fresh Lows on Saudi Price Cut

Posted on 02 October 2014 by VRS  |  Email |Print

Oil prices tumbled to more-than-one-year lows Wednesday on news that Saudi Arabia lowered the official selling prices for its crude oil. The price cuts suggest the Kingdom may not reduce output in the coming months to keep prices high.
Ample global oil supplies have weighed on prices in recent months, sending Brent, the global benchmark, to below $100 a barrel for the first time in 16 months Sept. 9. Brent futures haven’t traded above that level since. Some investors have bet that the Organization of the Petroleum Exporting Countries, especially Saudi Arabia, will cut production to keep prices above $100 a barrel………………………………………..Full Article: Source

Oil price plunge to $60 per barrel unlikely — Russia’s Finance Ministry

Posted on 02 October 2014 by VRS  |  Email |Print

A world oil price plunge to $60 per barrel is an unlikely scenario, Russian Finance Minister Anton Siluanov said on Wednesday. “We believe this is unlikely,” the finance minister said, adding the budget of Saudi Arabia, a major oil exporter, was balanced at the oil price of $80-85 per barrel.
Russia’s draft budget for 2015, which envisages a deficit of 0.6% of GDP, is based on an oil price of $96 per barrel. The Russian finance minister said the ministry has not examined a stress scenario of an oil plunge to $60 per barrel………………………………………..Full Article: Source

OPEC clout on price movement weakens

Posted on 02 October 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries (OPEC) is steadily losing control of the oil market with the rise of two new industry leaders, Russia and the US. And neither of the member countries has an interest in perpetuating oil-price fixing which is the primary motivation behind OPEC.
Under this scenario, some industry analysts and traders were seeing a bleak future for the organization, anticipating an eventual demise of the 54-year old oil body. Russia needs to produce as much oil and gas as possible to try and balance its budget which is dangerously dependent on petroleum while the broadly diversified US economy is enjoying the benefits of rising domestic production and falling prices………………………………………..Full Article: Source

US$660 gold?

Posted on 02 October 2014 by VRS  |  Email |Print

A client of respected market research firm Ned Davis Research asked the question: If gold follows its 1980s market path, what kind of gold price would we be looking at? The answer: $660. From the January 1980 peak to the February 1985 trough, gold lost 65.8%, according to a note posted today by John LaFarge, commodity specialist for Ned Davis. So far this cycle, gold is down -35.7% from its August 2011 $1888/oz. peak. If it follows the path of the 1980s bear market, it lands at $660 an ounce.
Gold’s biggest foe back then is the same as it is now: The soaring value of the U.S. dollar. Gold fares best when paper money is losing its value. But the dollar has surged against the euro and the yen, in large part because U.S. interest rates, low as they are, are higher than those of other major countries. And gold, after all, pays no interest or dividends………………………………………..Full Article: Source

Gold Prices Rise as Some Cash in on Recent Downturn

Posted on 02 October 2014 by VRS  |  Email |Print

Gold prices turned higher Wednesday as investors locked in gains on bearish bets following the metal’s recent steep downturn, while platinum futures fell to the lowest level in almost five years.
Gold for December delivery, the most actively traded contract, settled up $3.90, or 0.3%, at $1,215.50 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices fell to $1,205 an ounce earlier in the session………………………………………..Full Article: Source

Gold Prices: 3 Ways to Play the Bullion Retreat

Posted on 02 October 2014 by VRS  |  Email |Print

Gold prices have been in secular decline ever since the summer of 2011, peaking at $1,921.50 per ounce then to just above $1,200 today. The first 10 years of the 2000s — often referred to as the “lost decade” for stocks — saw bullion prices soar as investors fled to safety in times of war and recession. A print-happy Federal Reserve and rock-bottom interest rates put the cherry on top.
However, a slowly improving economy and sluggish inflation have brought prices closer to earth, and with the Fed now signaling that the days of easy money are likely winding down in 2015, goldbugs look to be in even more trouble………………………………………..Full Article: Source

How prices of crude oil are dragging rates of agricultural commodities

Posted on 01 October 2014 by VRS  |  Email |Print

At $96.98 a barrel currently, Brent crude prices have dropped some 12 per cent over the last 12 months. Prices of US crude, on the other hand, have fallen nearly eight per cent. But falling crude prices seem to have inflicted more severe damage on prices of agricultural commodities, particularly corn, wheat, rice and soyabean. Prices of these commodities, barring rice, have dropped by around 30 per cent in the last one year.
Trade developments: There is a connection between fall in prices of crude oil and agricultural commodities. Let us look into these developments: At over $100 a barrel, crude oil leads to search for alternative energy sources. This is what happened in the last few years. Costlier crude led to people looking for alternatives such as ethanol (mainly produced from corn or sugar) and bio-diesel (from rapeseed oil and palm oil)………………………………………..Full Article: Source

OPEC oil output hits highest since 2012 on Libya, Saudi

Posted on 01 October 2014 by VRS  |  Email |Print

OPEC’s oil supply jumped to its highest in almost two years in September, a Reuters survey found, due to further recovery in Libya and higher output from Saudi Arabia and other Gulf producers in the face of sub-$100 per barrel oil prices.
The lack of any cutbacks underlines the relaxed view of OPEC’s core Gulf members to oil’s slide from $115 in June to $97 on Tuesday - a level they can tolerate, but which puts budgets in producers such as Iran and non-member Russia under pressure………………………………………..Full Article: Source

Silver Hits Lowest Price Since March 2010

Posted on 01 October 2014 by VRS  |  Email |Print

Silver traded at $17.07 per ounce on Tuesday, its lowest level since March 2010, according to Reuters. The metal is on its way to the biggest quarterly loss it has seen since the middle of 2013, the source reported.
The same factors responsible for dragging gold prices down are also impacting silver. This includes a stronger dollar, expectations that the U.S. Federal Reserve will raise interest rates soon and positive U.S. economic data. The U.S. dollar has seen 11 weeks of gains as investors expect that the Fed will raise interest rates soon, before Japan and the euro zone do the same………………………………………..Full Article: Source

Platinum Slides to 5-Year Low as Demand Wanes After Strike Ends

Posted on 01 October 2014 by VRS  |  Email |Print

Platinum sank to the lowest level since 2009 as a surge in the dollar curbed investor interest, extending the first quarterly loss this year spurred by the resumption of output in South Africa after a strike. Gold held losses near a nine-month low.
The metal for immediate delivery fell as much as 1.2 percent to $1,285.50 an ounce, the lowest price since Oct. 5, 2009, extending a retreat from a 10-month high of $1,519.68 in July. It traded at $1,287 by 8:34 a.m. in Singapore, according to Bloomberg generic pricing. Gold was at $1,207.58 after dropping yesterday to $1,204.57, the lowest since Jan. 2………………………………………..Full Article: Source

Palladium price fizzles as Russia tensions ease

Posted on 01 October 2014 by VRS  |  Email |Print

Palladium prices are more or less back to square one. Earlier this year fears of sanctions or retaliatory measures in the Russia-Ukraine crisis drove palladium from the $700-$750/oz range, where it had comfortably sat for some time, to just over $900/oz in early September. Russia is the world’s top palladium and it was widely theorized broader sanctions - which have yet to materialize - might cut that supply and drive palladium prices higher.
But with fears of a wider conflict diminished as negotiations unfold in Eastern Ukraine amidst a tenuous ceasefire, palladium prices have come crashing down through most of September. In recent days the spot palladium price dropped well below $800/oz; at presstime the spot palladium price was creeping just over $765/oz, or more or less where it traded before fighting in Eastern Ukraine began………………………………………..Full Article: Source

Do Falling Commodity Prices Spell Doom?

Posted on 30 September 2014 by VRS  |  Email |Print

A week after the Federal Reserve announced its plan to keep interest rates low, it inadvertently bolstered the appeal of the dollar over raw materials as a store of value.As a result, while U.S. equities are on the rise, global commodity prices have hit a five-year low. But is the commodities slump simply an issue for the natural resources industries, or is it cause for concern for the larger economy?
This week’s Chart of the Week shows that the Bloomberg Commodity Index, Brent crude and iron ore are all in a slump. The Bloomberg Commodity Index, an index of 22 raw materials, dropped 5.6% this year. Brent crude dropped 12% – hitting a two-year low last week. The iron ore at the Chinese Qingdao port dropped 41% this year – hitting a five-year low last……………………………………….Full Article: Source

Oil Prices Fall, and the Global Economy Wins

Posted on 30 September 2014 by VRS  |  Email |Print

Oil is in the midst of one of its steepest selloffs since the financial crisis, with prices falling 16 percent since mid-June. This has the Saudis contemplating even deeper cuts in oil production to keep prices from declining any further. The world’s biggest crude exporter told OPEC recently that in August it reduced output by more than 400,000 barrels a day.
It’s not yet clear how well that’s working. The Saudi cuts were offset in part by more oil from Iran, Iraq, and Nigeria—not to mention the continued record increase in U.S. oil production thanks to the shale boom………………………………………..Full Article: Source

Gold price: The world’s wealthy are snapping up bullion

Posted on 30 September 2014 by VRS  |  Email |Print

Gold may be lingering at nine-month lows but demand for the precious metal is growing among the super rich. The world’s wealthy are buying record numbers of gold bars, similar to the ones held in reserve banks across the globe and featured in the 1969 British caper film, The Italian Job.
But don’t expect a convoy of Mini Coopers hauling their precious cargo through sewer drains. This is no heist. According to BullionByPost, sales of the 12.5 kilogram bars – worth about $US537,000 each based on current gold prices - have soared 243 per cent this year, The Telegraph in London reports………………………………………..Full Article: Source

Golden opportunity

Posted on 30 September 2014 by VRS  |  Email |Print

The recent slide in global crude oil and gold prices offers India a reprieve on the current account deficit (CAD), presenting an opportune time for policymakers to ease up on the numerous gold import restrictions. The circumstances which contributed to the unprecedented surge in gold imports in 2011/2012 and resulted in a runaway CAD, have since dramatically changed.
This may be the right time to do away with the 80:20 rule imposed last year, requiring gold importers to compulsorily export a fifth of each consignment. Apart from limiting raw material supplies to the jewellery trade, the rule has created needless hassles for banks tasked with enforcing it………………………………………..Full Article: Source

Gold prices may revert to long-term trends

Posted on 30 September 2014 by VRS  |  Email |Print

In times of uncertainty, investors typically flock to gold. But the commodity has fallen out of favour among them, in spite of recent economic turmoil. According to figures from the World Gold Council, between April and June 2014, total global gold demand was 964 tonnes, down 16 per cent on the same period a year earlier. It attributes this drop to consumers and investors pulling back and consolidating their activities.
Jewellery remains the largest component of gold demand but global jewellery demand was down 30 per cent year on year in the second quarter of 2014, to 510 tonnes. The World Gold Council does, however, point to a recovery in western markets, with jewellery demand up in the US by 15 per cent to 26 tonnes in the quarter and the UK by 21 per cent to 4 tonnes, citing the increasing popularity of yellow gold………………………………………..Full Article: Source

Gold prices may revert to long-term trends

Posted on 30 September 2014 by VRS  |  Email |Print

In times of uncertainty, investors typically flock to gold. But the commodity has fallen out of favour among them, in spite of recent economic turmoil. According to figures from the World Gold Council, between April and June 2014, total global gold demand was 964 tonnes, down 16 per cent on the same period a year earlier. It attributes this drop to consumers and investors pulling back and consolidating their activities.
Jewellery remains the largest component of gold demand but global jewellery demand was down 30 per cent year on year in the second quarter of 2014, to 510 tonnes………………………………………..Full Article: Source

Nickel Prices Enter Bear Market Amid Record Inventories

Posted on 30 September 2014 by VRS  |  Email |Print

Nickel entered a bear market as stockpiles reached a record, signaling ample global supplies even as Indonesia bans its exports of the mined metal.
The shipment restrictions in Indonesia, the world’s largest producer of the unrefined ore, drove prices as much as 56 percent higher in 2014 to a two-year high in May. The metal has since fallen more than 20 percent as banks including Credit Suisse Group AG said supplies weren’t as tight as expected………………………………………..Full Article: Source

The worrying slide in oil prices and demand

Posted on 29 September 2014 by VRS  |  Email |Print

While the price slide has slowed and some crude oils witnessed a rise due to a sudden and unexpected stock drawdown in the US, analysts still see the price direction as headed downward. The price of Brent oil rose to $97 (Dh356) a barrel on September 25 while the Opec basket of crude oils declined slightly to $94.25 a barrel. The US Energy Information Administration (EIA) now expects oil prices to stay below $100 a barrel until the end of the decade.
The signals that Opec may reduce its production ceiling by 0.5 million barrels a day (mbd) at the next ministerial meeting in November may not be enough to stabilise the market, especially if further declines are seen from now up to the date of the C meeting. If Opec is serious about price maintenance at some level — and thereby arrest further price erosion — it would be a good idea to start now to seek co-operation from other producers………………………………………..Full Article: Source

Why Peak-Oil Predictions Haven’t Come True

Posted on 29 September 2014 by VRS  |  Email |Print

Have we beaten “peak oil”? For decades, it has been a doomsday scenario looming large in the popular imagination: The world’s oil production tops out and then starts an inexorable decline—sending costs soaring and forcing nations to lay down strict rationing programs and battle for shrinking reserves.
U.S. oil production did peak in the 1970s and sank for decades after, exactly as the theory predicted. But then it did something the theory didn’t predict: It started rising again in 2009, and hasn’t stopped, thanks to a leap forward in oil-field technology………………………………………..Full Article: Source

China spurns gold, adding to price woes

Posted on 29 September 2014 by VRS  |  Email |Print

The slump in the gold price that has occurred in recent months shows no signs of letting up, and the latest import data from China will not give any joy to gold bugs. As gold closed at $1,219.40 in New York on Friday, a report out the same day by Commerzbank stated that Chinese gold imports will “fall well short” of last year. Hong Kong’s Census and Statistics Department shows China imported only 27.5 net metric tons in August.
“This puts net imports only slightly above the previous month’s low level, which constituted the lowest figure since June 2011,” Commerzbank said. The bank notes that net gold imports from Hong Kong are down by a third from the corresponding period last year, to 497 tons. August was the sixth straight month that Chinese gold imports have fallen………………………………………..Full Article: Source

Falling commodity prices flash warning on widening global divergences

Posted on 26 September 2014 by VRS  |  Email |Print

Global gloom-mongers have something new to worry about – falling commodity prices. The closely watched Bloomberg Commodity index, which tracks 20 commodity prices, has dropped this week to a fresh four-year low.
Tumbling prices for metals, oil and agricultural products fit with a narrative of a slowing China and of growth spluttering in advanced economies, despite exceptional levels of central bank support. It is hard, however, to find anyone in equity, bond or currency markets getting seriously concerned – yet. If anything, the opposite is the case………………………………………..Full Article: Source

Overheard: Falling Prices Hit OPEC

Posted on 26 September 2014 by VRS  |  Email |Print

Oil cartel struggles to cope with falling prices—the heart bleeds, surely. Sympathizing aside, OPEC’s fiscal health is a big factor in arresting the slide in oil prices, down 15% in three months. In a report published Wednesday, Citigroup estimated oil prices at which various major exporters balance their books. These range from $44 a barrel for Kuwait up to $184 for Libya.
Some big producers are squarely in deficit territory. Iran’s price is $130, for example, while Venezuela’s is $161. Brent’s average so far this year—the key metric rather than the current price—is $107………………………………………..Full Article: Source

Oil prices plunging despite ISIS

Posted on 26 September 2014 by VRS  |  Email |Print

Oil prices have fallen sharply over the past few months — even though the terrorist organization ISIS has taken control of some refineries in Syria and Iraq. Prices haven’t shot up since the United States and its allies have started to conduct airstrikes against ISIS oil targets in Syria either.
It may seem strange that prices haven’t skyrocketed. Typically, tension in the Middle East has caused serious concerns about oil supply being taken off the market. But experts say there are several reasons why the ISIS situation has not pushed energy prices up … and that the trend should continue………………………………………..Full Article: Source

Price-fixing of gold, oil to become a crime in U.K.

Posted on 26 September 2014 by VRS  |  Email |Print

The U.K government plans to make fixing the price of gold and six other benchmarks a criminal offense, the Treasury department said Thursday, as it announced a consultation into extending laws regulating LIBOR.
By the end of 2014, those rules will be put in place for: London Gold Fixing, the LMBA Silver Price, ICE Brent futures contract, Sterling Overnight Index Average (SONIA), Repurchase Overnight Index Average (RONIA), WM/Reuters 4 p.m. London Fix (for foreign exchange), and ISDAFix, which covers interest-rate swap transactions. ……………………………………….Full Article: Source

Gold price tipping point threatens mining operations

Posted on 26 September 2014 by VRS  |  Email |Print

The price of gold, down more than a third in three years, is approaching the tipping point where the mining industry would see a spike in the number of producers reducing output or even shutting down operations.
Several mines globally have already suspended output in the past 18 months, but not as many as industry watchers expected as producers focused on slashing costs and reworking mine plans to extract more profitable, higher-grade ounces………………………………………..Full Article: Source

Gold Rebounds From Eight-Month Low As Dollar Eases

Posted on 26 September 2014 by VRS  |  Email |Print

Gold prices moved higher, rebounding from eight-month lows hit earlier Thursday, as the dollar pared its gains. Gold for December delivery, the most active contract, was recently up $2.60, or 0.2%, at $1,222.10 a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold fell to $1,206.60 an ounce as the ICE Dollar Index rose to its highest level in four years. But a reversal in the dollar sparked a rush by bearish investors to close out their bets on lower gold prices, propelling gold higher in late morning trade………………………………………..Full Article: Source

Best Cure For High Commodity Prices

Posted on 25 September 2014 by VRS  |  Email |Print

During the previous decade, there was lots of buzz about the commodity super-cycle. In my opinion, super-cycles should last at least 20 years. If so, then the latest one in commodities wasn’t so super. I reckon it lasted about 10 years, kicked off by China’s joining the World Trade Organization in December 2001 and starting to peter out when China’s industrial production growth peaked at a record 20.7% on a y/y basis during February 2010.
It was down to 6.9% last month. The proponents of the super-cycle assumed that rapidly growing demand for commodities in China would outstrip supplies for a very long time, pushing prices higher. They did rise for a while. But as they say in the commodity pits, the best cure for high commodity prices is high commodity prices………………………………………..Full Article: Source

Geopolitics and the oil price: Why the disconnect?

Posted on 25 September 2014 by VRS  |  Email |Print

Geopolitical tensions between Russia and the West and troubles in Middle East have dominated headlines all summer, but investors so far have managed to shrug off fears, with the market reaction remaining fairly contained.
The Organisation of Petroleum Exporting Countries (OPEC) basket of 12 crude oils slid to $94.31 on Tuesday, the lowest level since July 2012 even as the U.S. confirmed 14 air strikes against ISIS, with large explosions confirmed in eastern Syria………………………………………..Full Article: Source

Oil price slips to two-year low

Posted on 25 September 2014 by VRS  |  Email |Print

Oil fell below $96 a barrel on Wednesday to its lowest in over two years as rising supply from Africa and Iraq offset mounting tensions in the Middle East and stronger-than-expected growth expectations in China. Weak European economic data and a rise in oil exports from Iraq, Libya and Nigeria have eroded the oil price, which is down around 14 percent this quarter, the biggest quarterly drop since the second quarter of 2012.
Brent crude for November delivery fell $1.07 to $95.78 a barrel by 1500 GMT after hitting $95.72, its lowest since July 2012. It was down more than 6.5 percent for the month so far, the biggest monthly drop since April 2013………………………………………..Full Article: Source

Capital Economics Sees $1,400 Platinum At Year-End, $1,500 By End-2015

Posted on 25 September 2014 by VRS  |  Email |Print

Capital Economics has lowered its end-of-year platinum forecast to $1,400 an ounce but listed an upbeat outlook for the medium term, calling for $1,500 platinum by the end of 2015. “Disappointing growth in demand at a time of high stocks is weighing on the price of platinum,” the firm said in a report Wednesday.
“We expect lower prices to encourage some buying, notably of jewelry, but a sustained recovery is only likely when stocks are depleted, possibly some time next year.” October platinum futures settled at $1,319.40 an ounce on the New York Mercantile Exchange Wednesday………………………………………..Full Article: Source

Reasons Gold Neared $2,000 Still In Place - Frank Giustra

Posted on 25 September 2014 by VRS  |  Email |Print

There is a reason to hold gold but patience is a virtue, said Frank Giustra, renowned resource investor and co-founder of the Clinton Giustra Enterprise Partnership. “All the reasons why gold went to $2,000 in the first place are still there, and in spades,” he said during an interview with Kitco News’ Daniela Cambone at the Clinton Global Initiative annual meeting on Tuesday.
Gold is currently stuck in a ‘no one cares phase’ but his views on the metal remain unchanged he said on the sidelines of the annual meeting in New York………………………………………..Full Article: Source

Agricultural commodity prices are crashing too

Posted on 24 September 2014 by VRS  |  Email |Print

The mining commodity price squeeze was making headlines again on Tuesday as iron ore fell to a five-year low and BHP Billiton announced that 700 Bowen Basin coalmining workers would go, but the miners are not alone in feeling the pressure.
The price of wheat, Australia’s sixth biggest export, has fallen by about 31 per cent since May, and is at a four-year low. The price of corn, a key industrial food and drink-making raw material, has fallen by 28 per cent since mid August, and is also at four-year lows. The price of sugar has fallen by 25 per cent since mid-year, and soybean prices have fallen by 39 per cent………………………………………..Full Article: Source

Iran Sees Oil Prices Falling to $90 a Barrel By Late March

Posted on 24 September 2014 by VRS  |  Email |Print

Oil prices will likely fall to $90 a barrel by the end of the winter, Iran’s head of oil sales was quoted as saying Tuesday, countering views by other producers that expect prices to rebound. The remarks come after members of the Organization of the Petroleum Exporting Countries said in recent days they expect oil prices to rebound after it fell below $100 a barrel earlier this month.
But in remarks carried by Iran’s oil ministry website Shana, Mohsen Ghamsari, the director at the National Iranian Oil Company in charge of international oil sales, said that “if the oil market only looks at supply and demand, the oil price will further decline in the global market.”……………………………………….Full Article: Source

Why the fall in the oil price won’t last

Posted on 24 September 2014 by VRS  |  Email |Print

The impact of tensions in the Middle East and Eastern Europe on future oil production and OPEC’s ability to step in and manage the market are two major reasons why the oil price is nearing its floor, according to Lombard Odier’s Pascal Menges.
Geo-political risk has been one of the most used phrases in financial markets over recent months as ongoing tensions between Russia and Ukraine and the escalating conflict in Iraq have been seen by many as reasons to take a cautious stance in their portfolios. However, despite those potentially catastrophic macroeconomic headwinds, out-and-out safe havens such as gold bullion and crude oil have failed to spike………………………………………..Full Article: Source

OPEC Yet to Decide on Supply Cuts as Crude Prices Extend Retreat

Posted on 24 September 2014 by VRS  |  Email |Print

OPEC has yet to decide to cut its production target, the United Arab Emirates’ energy minister said, as crude prices extend a slide since June amid a boom in U.S. shale oil and signs of slower demand growth in China.
All 12 members of the group must agree before any decrease in its official limit of 30 million barrels a day, the U.A.E.’s Suhail Al Mazrouei said today, a week after OPEC’s secretary-general said it may lower the ceiling in 2015………………………………………..Full Article: Source

Rigged Gold Price Distorts Perception of Economic Reality

Posted on 24 September 2014 by VRS  |  Email |Print

The Federal Reserve and its bullion bank agents (JP Morgan, Scotia, and HSBC) have been using naked short-selling to drive down the price of gold since September 2011. The latest containment effort began in mid-July of this year, after gold had moved higher in price from the beginning of June and was threatening to take out key technical levels, which would have triggered a flood of buying from hedge funds.
The Fed and its agents rig the gold price in the New York Comex futures (paper gold) market. The bullion banks have the ability to print an unlimited supply of gold contracts which are sold in large volumes at times when Comex activity is light………………………………………..Full Article: Source

Gold prices: Who has the Midas touch?

Posted on 24 September 2014 by VRS  |  Email |Print

The glint of gold has caught the eye of Business Middle East. It was a golden week for buyers of bullion as prices continued to drop. Prices slid to their lowest level in nearly nine months, as the dollar rose to its highest in four years against a basket of major currencies. Why gold fell: There were several influences at play, but the biggest was higher borrowing cost expectations from the Federal Reserve.
After the latest meeting of the Fed’s policy committee, Chair Janet Yellen said interest rates in the US will remain near zero for a “considerable time,” but she also projected a faster rate of increases when they do occur………………………………………..Full Article: Source

Silver to $14/oz, but discounting QE end - analysts

Posted on 24 September 2014 by VRS  |  Email |Print

Silver prices are headed significantly lower in a stronger dollar market, some analyst now forecast. “Silver prices have returned to the levels seen before the financial crisis that started in 2008, and before quantitative easing (QE) was introduced,” noted Scotiabank analysts in a recent report. “It might, therefore, well be into the process of discounting the prospects of an end of the QE. For now, however, that seems to be one of the reasons behind the price weakness.”
Scotiabank added that the weakness was also justified by weak fundamentals, which show a large supply surplus . “Now that investors are not buying much silver through exchange-traded fund (ETFs), less of the supply surplus is being absorbed. That means more of the surplus has weighed on prices,” it added………………………………………..Full Article: Source

Zinc price rises on growing global demand

Posted on 24 September 2014 by VRS  |  Email |Print

The price value of zinc exceeded the highest value point; which was in the year 2009, in the first better half of this year. The main reason behind this unexpected rise in the metal is stated to be the increase of global demand over the global production. The squeeze further tightens as the US Mint boosts its production to 7.5 billion pennies this year, which is a 14 percent increase and will require more than 18,000 metric tons of zinc for the production.
Zinc has grown to become an essential element in our day to day life, and is being used in manufacturing most of the commodities starting from coins to sunscreen, where as in the US economy, the price of this metal is climbing up………………………………………..Full Article: Source

Australia cuts 2015 iron ore price forecast to $92.40/tonne

Posted on 24 September 2014 by VRS  |  Email |Print

Australia revised down on Wednesday its forecast iron ore price for 2015 to $92.40 a tonne from $94.60 a tonne previously, citing mounting competition among producers as supply rises.
“Over the next five years, iron ore prices are projected to average between $90 and $95 a tonne,” Australian forecaster the Bureau of Resource and Energy Economics (BREE) said in its latest quarterly update. “Further increases in supply indicate increasing price competition will be needed to push more high-cost supply out of the market over the next two years,” BREE said………………………………………..Full Article: Source

Metal prices weaken on global macro factors

Posted on 24 September 2014 by VRS  |  Email |Print

September is proving to be a rough month for the metals sector. In the first half of the month, prices of steel and base metals have fallen further on poor demand and weaker raw material costs. The strengthening dollar has made matters worse for base metals and internationally prices of aluminium are expected to correct further.
With demand from China cooling off and raw material prices coming down on over-supply, prices of steel and other base metals are expected to remain under pressure. Prices of Export HRC (FOB Black Sea) have drifted down to $540 a tonne, while Chinese HRC sheets declined to $498 a tonne. ……………………………………….Full Article: Source

Great American Group Analysts See Prices Rise for Many Base Metals

Posted on 24 September 2014 by VRS  |  Email |Print

Analysts with GA Advisory and Valuation Services, LLC, a division of Great American Group, Inc. report that pricing has increased for a number of non-ferrous metals in recent months amid tight physical supplies, despite lackluster demand in certain segments. In particular, pricing for aluminum, zinc, and lead climbed higher than expected.
“Stockpiles are dwindling and supply deficits are expected for these metals,” noted Michael Petruski, Executive Vice President of Great American Group’s Advisory and Valuation Services division. “Zinc prices have jumped nearly 25% over the year, as zinc production is slated to fall short of demand for the first time in seven years.” (Press Release)

Canadian miners struggle amid oversupply, price collapse

Posted on 24 September 2014 by VRS  |  Email |Print

The world is flooded with metals. Years of expensive expansions have left the market awash with iron ore, metallurgical coal and copper. For more than a decade, China’s growing economy fuelled the bull market in commodities. Mining companies spent billions on acquisitions and new projects around the world, adding waves of new supply to keep the country’s steel mills and factories humming.
Then China’s economic growth slowed and the good times stopped. Now the mining industry around the globe is suffering amid a price collapse for some key metals. Iron ore has lost more than half its value since the boom days, trading at $80 (U.S.) a tonne from a high of $190 in 2011………………………………………..Full Article: Source

High Oil Prices Are No Defense Against Risk Of Stranded Assets

Posted on 23 September 2014 by VRS  |  Email |Print

There has been much concern in the financial community recently about the risk of “stranded assets” in the oil industry, particularly if governments introduce strict carbon regulations to fight climate change and therefore reduce demand for oil, which would reduce the price.
At the same time, developing new oil wells is becoming more and more expensive. Most of the easy oil has already been discovered and much of it is under the control of national oil companies in countries ranging from Russia to Iran to Venezuela………………………………………..Full Article: Source

Why Oil Prices Are Dropping Despite Mideast Unrest

Posted on 23 September 2014 by VRS  |  Email |Print

Canada’s oilpatch is basking in an extended sweet spot of sorts. Commodity prices aren’t spiking in a way that’s sure to sink the global economy, nor are they plumbing depths that would force small producers out of business and big players to start tightening their belts and cutting jobs.
The global oil market, however, is changing and nowhere are the signs more evident than the reaction to what’s happening in the Middle East. In the past, military conflicts in the Middle East and the attendant threat of supply disruptions would send oil prices soaring. Today, oil prices are falling even as the region is seemingly unraveling………………………………………..Full Article: Source

Moody’s cuts price assumptions for natural gas, oil through 2015

Posted on 23 September 2014 by VRS  |  Email |Print

Moody’s Investors Service last week reduced its assumptions for average spot prices for North American natural gas after a mild summer cut demand for gas-powered electricity. Moody’s also cut its assumption for the spot prices for the two benchmark barrels of crude, European Brent and West Texas Intermediate (WTI). Oil prices dropped this past summer due in part to slower economic growth in some of the world’s major economies, a strengthened U.S. dollar, and growing non-OPEC supply, Moody’s said.
The rating agency lowered its price assumption for North American benchmark Henry Hub natural gas to $3.75 per million British thermal units (MMBtu) through 2015, a 50-cent decrease from its earlier assumption of $4.25/MMBtu set in June. However, its assumptions for 2016 and beyond are unchanged at $4/MMBtu………………………………………..Full Article: Source

Silver hammered to 4-year low as gold and base metals retreat

Posted on 23 September 2014 by VRS  |  Email |Print

Silver prices slid to their lowest in four years on Monday, with the prospect of rising U.S. interest rates undermining precious metals and industrial commodities dented by worries over Chinese demand.
Caught on both counts with dual roles as an industrial metal, widely used in electronics, and as an investment vehicle, silver tumbled more than 3 percent in just 40 minutes in early Asian trade to hit its lowest since mid-2010 at $17.30 an ounce………………………………………..Full Article: Source

Nickel Prices Decline to Five-Month Low on China Outlook

Posted on 23 September 2014 by VRS  |  Email |Print

Nickel tumbled to a five-month low on concern that demand will ebb in China, the world’s biggest user of industrial metals. Economic growth in China, Asia’s largest economy, faces downward pressure, Finance Minister Lou Jiwei said.
He affirmed that there won’t be major policy changes in response to individual economic indicators, damping prospects for a stimulus boost. Nickel has dropped as much as 22 percent from a 27-month high in mid-May………………………………………..Full Article: Source

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