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Commodities Briefing - Category | Price Watch more

With a few exceptions, the prices of industrial commodities have taken another hit”

Posted on 25 July 2016 by VRS  |  Email |Print

Research firm Capital Economics blamed the US dollar strength for taking the wind out of the sails of mining commodities last week. “With a few exceptions, the prices of industrial commodities have taken another hit … pressured by profit taking and renewed strength in the US dollar,” the firm said in a weekly note.
Separately, the European Central Bank’s decision to keep interest rates on hold last Thursday hurt gold and silver. Though the ECB suggested asset purchases and potentially a rate cut could come at the September meeting………………………………………..Full Article: Source

Why lithium will see another price spike this fall

Posted on 25 July 2016 by VRS  |  Email |Print

So far, lithium has been the hottest metal of 2016, beating out gold, with exponential demand expected over the coming years. Although the price trajectory of the metal has been subdued in recent months, the fundamentals behind the long-term trajectory suggest strong potential for long-term growth.
Price doubling from 2014/2015 was first seen in China and is now being felt worldwide, with lithium hydroxide prices from $16-20 and carbonate prices from $12-14 thousand USD per ton. There is no doubt as to the push that Tesla has given the current automotive transition to electric vehicles (EVs)………………………………………..Full Article: Source

Is Gold Set To Hit $1,500 Per Ounce?

Posted on 22 July 2016 by VRS  |  Email |Print

Following several years of significant price weakness, gold appears to be well-and-truly back! The yellow metal’s 12-year bull run came to a spectacular end in 2013, prompting many market experts to warn of a painful collapse in the years ahead.
Gold had shed a third of its value during the course of 2013, but that was just the beginning — indeed, bullion prices came within a whisker of moving back into triple digits just last December, and represented a far cry from the record highs above $1,900 struck back in 2011………………………………………..Full Article: Source

Gold to hit $1,500 in 2016 $5,000 in 2020: Analysts

Posted on 22 July 2016 by VRS  |  Email |Print

Gold has been the biggest outperformer among all asset classes this year. Amid dismal global growth outlook, bullish sentiment for the gold remains intact with precious metal experts predicting that the yellow metal would rise 10 per cent short-term as they expect it to close in on 1,500 per troy ounce by end of this year, and eventually hitting 5,000 by 2020.
Gold, which has been the biggest outperformer among all asset classes this year, up 26 per cent, is now headed for 1,500 per ounce while silver will overshoot to 30 per ounce with the global economic growth now expected to be slower at three per cent in 2016, versus 3.4 per cent at beginning of year, the global research team at Bank of America Merrill Lynch said………………………………………..Full Article: Source

July Lead Price Forecast: On the Up and Up

Posted on 22 July 2016 by VRS  |  Email |Print

To begin July, lead prices moved up nearly a quarter of 1% in futures trades as participants increased their positions due, in part, to a pick-up in spot market demand and a boost in base metals overseas. Meanwhile, according to a report from the Business Standard, lead for August delivery at the Multi-Commodity Exchange also grew by nearly .25%.
Our own Raul de Frutos reported just this week that lead prices have hit a one-year high despite neutral fundamentals. It’s been a year of fluctuation for lead, but three-month London Metal Exchange data has prices at $1,900 per metric ton………………………………………..Full Article: Source

Nickel Extends Advance to 11-Month High on Philippines Concern

Posted on 22 July 2016 by VRS  |  Email |Print

Nickel extended gains to a 11-month high on concern the Philippines crackdown on mines is disrupting supplies from the world’s top supplier of nickel ore. A gauge of mining stocks climbed for the first time in a week.
The new government in the Philippines has pledged to shut mines that fall short of environmental and welfare standards. Environment Secretary Gina Lopez said on Wednesday that the state plans to suspend shipments from an idled mine owned by the nation’s top refiner, Nickel Asia Corp., while the checkup is conducted………………………………………..Full Article: Source

Nickel and zinc prices hit multi-month highs

Posted on 22 July 2016 by VRS  |  Email |Print

Stronger demand in China emerges as the industrial metals face potential supply shortages. Prices for nickel and zinc rallied to multi-month highs on Thursday as investors bet on further supply disruptions for the industrial metals.
The price for zinc, which is used to galvanise steel, rose to its highest level in 14 months at $2,272.5 a tonne on the London Metal Exchange, while nickel touched an eight-month high of $10,745 a tonne. Nickel is used to make stainless steel………………………………………..Full Article: Source

Oil prices set to peak sooner than expected on supply shortage, Barclays says

Posted on 21 July 2016 by VRS  |  Email |Print

Barclays is the latest bank to raise its forecast for medium-term oil prices, saying it now expects them to peak sooner than expected as a supply shortage develops.
The bank said Tuesday it now sees oil prices averaging $85 a barrel by 2019, slightly higher than its prior view and one year ahead of its last assessment in October. Barclays previously saw Brent at $83 a barrel in 2019 and $85 a barrel in 2020. It now expects the oil price to peak in 2019 before declining to $78 in 2021………………………………………..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

Silver to Hit $50

Posted on 21 July 2016 by VRS  |  Email |Print

The last major bull market for silver (prior to 2009–2011) was in the 1970s. In the decade of disco, the price of silver climbed from $1.25 to $43. The signs are clear… silver prices have been steadily climbing again. We’re headed toward another “golden” age for silver.
Another bullish sign for silver prices is the gold-to-silver ratio. When Rome ruled the world, the g/s ratio was set at 12 to one. One piece of gold was equal to 12 pieces of silver. In 1792 the g/s ratio in the United States was fixed by law at 15 to one. Today the g/s ratio is at 67.96. That means gold is expensive and silver is cheap in comparison………………………………………..Full Article: Source

Deltec’s Lele says commodity prices will be decimated

Posted on 20 July 2016 by VRS  |  Email |Print

Commodities are heading into another bear market and will be “decimated” by an environment of tightening United States dollar liquidity, similar to the sell-off at the start of 2016, that will drag emerging markets and high-yield credit down too.
Atul Lele, chief investment officer at Deltec, remains convinced that the US Federal Reserve can raise interest rates once this year and again in 2017. Futures indicate that right now traders are not counting on a Fed hike until 2018 and Mr Lele agrees the market “is not at all prepared” for a return to slower US dollar liquidity growth, which will come as the Fed puts more distance between itself and the era of zero per cent interest rates………………………………………..Full Article: Source

Oil prices won’t suffer a 2015-style price collapse, says Citi’s Morse

Posted on 20 July 2016 by VRS  |  Email |Print

Oil prices are following a familiar — and potentially troubling — trend that took hold last year, but investors shouldn’t fear a 2015-style, second-half price collapse, Citigroup’s global head of commodities research said Tuesday.
Commodities were the top performing asset class in the first half of 2016, roughly tracing last year’s rally through June. And just like last year, crude oil futures are plateauing at the half point. That pause was followed by a plunge to 12-year lows last winter, but Citi’s Ed Morse said things will be different this year………………………………………..Full Article: Source

Why Oil Prices Might Not Rebound Until 2019

Posted on 20 July 2016 by VRS  |  Email |Print

It’s a safe bet that investors are getting increasingly tired of all the conflicting forecasts about oil and gas prices. Some argue that oil is heading back to $20 thanks to the continuing excess supply. Others claim that the excess is overestimated and crude is well on its way to reach $80 or more by the end of the year.
The likely truth, as usual, is somewhere in the middle, at least for the time being. But according to energy consultants Douglas-Westwood, prices will remain where they are now until about 2019, when offshore oil production will finally peak………………………………………..Full Article: Source

Silver is the best performing commodity of 2016

Posted on 20 July 2016 by VRS  |  Email |Print

Silver has surged over 40% since the beginning of 2016, making it the number performing commodity of 2016. But is the surge of the precious metal just the beginning of things to come? Historically the price of silver tends to track the price of gold as both are seen as monetary metals.
Silver is often more volatile, however, experiencing larger up and downswings with market movements. Essentially, silver could be explained as gold on steroids………………………………………..Full Article: Source

Oil Prices Shrug Off Attempted Coup in Turkey

Posted on 19 July 2016 by VRS  |  Email |Print

Despite an attempted military coup in Turkey oil prices were steady on Monday, supported by favorable growth data reported by the U.S. and China. But a looming glut of oil products could put pressure on the market, The Wall Street Journal reports.
The global benchmark, Brent, was trading up 0.1% at $47.66 a barrel. Its U.S. counterpart, West Texas Intermediate, was trading down 0.02% at $45.94 a barrel. The instability over the weekend in Turkey fueled fears that the flow of oil through Turkish waters, an important route for shipping and trading, could be hindered………………………………………..Full Article: Source

Who Really Won The Oil Price War?

Posted on 19 July 2016 by VRS  |  Email |Print

The rise in oil prices over the past six months has come as a blessing for the battered U.S. shale producers. Oil prices have risen more than 50 percent since January, giving a glimmer of hope to the U.S. oil industry that the worst of the oil crisis might finally be behind them.
Moreover, it forced the shale producers to adapt by reducing production costs and increasing efficiency. According to data publicized by Reuters, the decline rates of oil wells in the most productive fields in the U.S. – the Permian and Bakken Basins – were almost halved over the past several years………………………………………..Full Article: Source

ABN, RBC up their gold price calls

Posted on 19 July 2016 by VRS  |  Email |Print

Bears of the precious metal are getting very rare as global uncertainties combine to lift forecasts. Just under a year ago Dutch bank ABN AMRO was even more bearish of gold than Goldman Sachs. Back then Goldman was expecting a price of $1,000 per ounce, but ABN was looking for $800 by the end of this year.
Today the metal is firmly above $1,300 – almost 70% higher than ABN’s old target price. Admittedly, the bank fairly quickly reversed its course just a few months after it made that fateful forecast. But its new target price of $1,200 was all-but immediately hit in the tumultuous early weeks of 2016………………………………………..Full Article: Source

Gold Price Forecast: Long-Term Pattern Targets $2,700

Posted on 19 July 2016 by VRS  |  Email |Print

Gold has been hot recently. Even now during the summer months, which is typically the slowest time of year for the shiny yellow. Yet, even with the $110 intraday surge on June 24th after the affirmative Brexit vote, gold still has some work to do to convince the remaining bears that a change in the down trend from 2011-2015 is officially upon us.
In this article, we present the critical technical crossroads that gold finds itself in…and what the ramifications of a breakout from this level will signal for long-term investors………………………………………..Full Article: Source

Silver Prices Rose Over 40% in 2016: Will the Bull Market Continue?

Posted on 19 July 2016 by VRS  |  Email |Print

Silver prices have already appreciated over 40% in 2016, with the metal climbing on renewed safe haven demand. There is the argument that there is always the need for investors to have some safe haven investments in their portfolio, and silver is an attractive addition due to its affordability when compared to the other typical safe haven assets, which include gold and platinum.
So far in 2016, there have been many reasons to purchases safe haven investments, and combined with the fact that the Fed has delayed its interest rate hikes, silver prices have accelerated since June………………………………………..Full Article: Source

Why Lithium Will See Another Price Spike This Fall

Posted on 19 July 2016 by VRS  |  Email |Print

So far, lithium has been the hottest metal of 2016, beating out gold, with exponential demand expected over the coming years. Although the price trajectory of the metal has been subdued in recent months, the fundamentals behind the long-term trajectory suggest strong potential for long-term growth.
Price doubling from 2014/2015 was first seen in China and is now being felt worldwide, with lithium hydroxide prices from $16-20 and carbonate prices from $12-14 thousand USD per ton………………………………………..Full Article: Source

Oil Must Go to $40 and Stay There to Buy Russia Reforms at Last

Posted on 18 July 2016 by VRS  |  Email |Print

At an oil price of $40 or below, Russian President Vladimir Putin introduced a flat income tax, built a sovereign wealth fund and delivered speeches to the Bundestag in German. When it was over $100, he fought two wars with neighbors and splashed over $40 billion on a Winter Olympics.
Brent crude at $40 is the key threshold for Russia, so low that institutional reforms become unavoidable but high enough to prevent a financial meltdown, according to a Bloomberg survey of economists. While more than a decade of booming revenue brought a $2.1 trillion energy windfall — and with it prosperity the like of which Russia has never seen — the economy hasn’t grown faster than 5 percent in eight years and has spent the last two in recession………………………………………..Full Article: Source

Gold to hit $3,000 to $5,000 an ounce - analysts

Posted on 18 July 2016 by VRS  |  Email |Print

The bullion proved to be a lucrative asset class when it rallied substantially last month, reaching its highest level since the global recession in 2008, after the controversial Brexit vote. Although signs became apparent over the last few days that the rally started to ease, the yellow metal again moved higher on Friday when reports of a Turkish coup attempt broke out.
With all the turmoil in the world, gold is seen to continue doing well this year and over the next few years. By the end of 2016, the precious metal could reach $1,500 and by 2020, signs point to the metal hitting a new record high in excess of $3,000 per ounce………………………………………..Full Article: Source

Analyst Boosts Price Target for Gold by 75%

Posted on 18 July 2016 by VRS  |  Email |Print

Less than one year ago, Dutch bank ABN AMRO has put itself on the map by being more bearish on gold than Goldman Sachs. Whereas the latter was expecting to see a gold price of $1000/oz, the head analyst responsible for precious metals at ABN AMRO said she was expecting a gold price of $800 per ounce by the end of this year.
Gold is trading firmly above the $1300/oz, and almost 70% higher than ABN’s target price. But of course, just like any other ‘analyst’, the bank quickly reversed its course just a few months later when the market started to turn around………………………………………..Full Article: Source

Oil rebounds as investors join global market rally

Posted on 15 July 2016 by VRS  |  Email |Print

Oil prices rebounded Thursday in tandem with a rally on global equity markets as risk appetites grew and a weaker dollar helped to boost demand. Snapping back from two-month lows Wednesday on disappointing US inventories, prices advanced as investors joined the bullish mood on markets expecting more stimulus in major economies.
US benchmark West Texas Intermediate for delivery in August rose 93 US cents to US$45.68 a barrel on the New York Mercantile Exchange. In London, Brent North Sea crude for September delivery, the global benchmark, finished at US$47.37 a barrel, up US$1.11 from Wednesday’s settlement………………………………………..Full Article: Source

Why is the gold price rising? Five forces driving the precious metal

Posted on 15 July 2016 by VRS  |  Email |Print

Hoarding gold is a centuries-old reaction to times of crisis, and the aftermath of the EU referendum vote is no different. The yellow metal has soared in value since Britain voted to leave the European Union as investors shoot towards traditional “safe haven” assets. Prices have reached a three-year high as Brexit worries intensify.
An ounce of gold is now worth $1,327 (£1,003), up from $1,257 on June 23. However, the spike follows a sustained rally in the gold price throughout the year. The metal is now worth a quarter more an ounce than it was at the end of 2015………………………………………..Full Article: Source

Silver Prices Could Triple

Posted on 15 July 2016 by VRS  |  Email |Print

Respected metals and mining analyst John Embry wasn’t shy about his prediction for silver prices on Thursday, noting the precious metal could triple, quadruple, or even more in the coming months and years.
Said Embry in an interview with KWN: “…Silver is now performing more positively, despite the best efforts of the usual suspects to suppress the price. And this is confirmed by the Open Interest being near all-time record levels, which just shows how hard they are working to keep the price at low levels………………………………………..Full Article: Source

Rare earth metals pay the price of previous excess: Andy Home

Posted on 15 July 2016 by VRS  |  Email |Print

For every action there is a reaction and never more so than when it comes to industrial commodity supply chains. Japanese automotive giant Honda and its technology partner Daido Steel have just announced a materials breakthrough in the electric motors used in hybrid vehicles.
Starting with the next generation of “FREED” minivan due to go on sale later this year, Honda will be using a motor that doesn’t need heavy rare earth metals. Specifically, it will be the world’s first hybrid engine, one combining a gasoline and electric motor, to dispense with terbium and dysprosium………………………………………..Full Article: Source

Japan’s aluminium association head sees metal price at $1,500-$1,700/T

Posted on 15 July 2016 by VRS  |  Email |Print

Aluminium prices are likely to hover between $1,500 and $1,700 per tonne for the later half of this year as oversupply will cap further gains, Akio Hamaji, the new chairman of the Japan Aluminium Association said on Thursday.
“With uncertainty over the European economy after Brexit, it is unlikely to see a strong pickup in global economy,” Hamaji told a small group of reporters. “So I don’t expect sharp gains in the metal prices,” he said, adding aluminium supply is expected to exceed demand in the global market this year which will weigh on the market………………………………………..Full Article: Source

Bare necessities no more

Posted on 14 July 2016 by VRS  |  Email |Print

Commodity prices have begun to rise since the turn of the year, but will they go higher? Commodity prices have lost some of their shine in recent years, with falling prices reflecting a broader economic malaise and a shaky outlook for Chinese growth and demand.
Since its peak in February 2008, the Bloomberg Commodity Index, which measures a broad basket of commodities, has fallen 62 per cent. However, there are signs that this bear market is beginning to burn out, with prices rallying 14 per cent so far this year………………………………………..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

How High Can Gold Prices Go? Experts Weigh In

Posted on 14 July 2016 by VRS  |  Email |Print

Gold prices have been locked into a year-long bullish pattern, despite hitting multi-year lows in January. The question on everyone’s mind is: how much further can they rise? Let’s take a look at several expert predictions.
Some gold watchers are bearish on the metal, others are bullish. Still others are ultra bullish, while some are insanely bullish. With gold currently sitting around $1,342 per ounce, here’s a rundown of some recent predictions: Goldman Sachs analyst Andrew Quail – $1,250/oz – Goldman has been bearish on gold for quite some time, despite its recent run-up………………………………………..Full Article: Source

Gold to hit $1,500 in 2016; $5,000 in 2020: Analysts

Posted on 14 July 2016 by VRS  |  Email |Print

Amid dismal global growth outlook, bullish sentiment for the gold remains intact with precious metal experts predicting that the yellow metal would rise 10 per cent short-term as they expect it to close in on $1,500 per troy ounce by end of this year, and eventually hitting $5,000 by 2020.
Gold, which has been the biggest outperformer among all asset classes this year, up 26 per cent, is now headed for $1,500 per ounce while silver will overshoot to $30 per ounce with the global economic growth now expected to be slower at three per cent in 2016, versus 3.4 per cent at beginning of year, the global research team at Bank of America Merrill Lynch said………………………………………..Full Article: Source

Silver prices surge nearly 50%, but beware of the devil’s metal

Posted on 14 July 2016 by VRS  |  Email |Print

Silver prices have leapt nearly 50 percent so far this year, reversing three years of losses, but history shows investors hoping to hop aboard the bandwagon should be wary. A surge in gold and upbeat prices of industrial metals, along with prospects for yet more monetary stimulus from leading central banks, have prompted some heart-stopping moves.
“I’ve lost hair this year,” one silver trader said after the market shot up by almost a third in one month alone. “And about 20 pounds.” On the face of it, silver has a lot of appeal. It tends to track gold prices, but its low liquidity usually leads it to outperform the move in gold by around 1.5 times………………………………………..Full Article: Source

China Aims to Be Metals Price Setter, Not Just Largest Consumer

Posted on 14 July 2016 by VRS  |  Email |Print

China, this year, is becoming more than just the world’s largest metals consumer, it’s also taking a larger role in setting metals prices. While oil prices have crept up this summer, another selloff could be caused when refined products in storage finally come to market.
The prices of metals from aluminum to zinc have long swayed to the beat of the world’s largest manufacturing nation, Reuters’ Andy Home writes. But this is the year that China has emerged from the limelight to take center-stage in the trading of those metals………………………………………..Full Article: Source

Global research houses revise commodity price outlook upward

Posted on 13 July 2016 by VRS  |  Email |Print

Global investment banks have started revising upward their price outlook for base metals, coal & oil, and precious metals. They see demand starting to outweigh supplies that were cut over the past few quarters.
Crude oil and precious metals have already seen a sharp up-move from low levels. Crude oil was quoted around $25-26 per barrel, gold below $1,100 six months ago. Recovery in metals was slower and they are facing resistance at higher levels, except zinc which is up about 20 per cent………………………………………..Full Article: Source

Oil price could drop below $40 as bullish bets slashed

Posted on 13 July 2016 by VRS  |  Email |Print

After falling to another two-month low overnight, the oil price was recovering a little during London trading this morning. International benchmark Brent crude was around 1.7 per cent higher to $47 a barrel. In New York on Monday, it fell below $46 at one point, its lowest since early May.
This was below the nadir reached last Thursday, in a week that saw an eight per cent overall decline, the worst in six months. Brent had previously been hovering around $50 a barrel………………………………………..Full Article: Source

EIA ups oil price forecasts for this year and next

Posted on 13 July 2016 by VRS  |  Email |Print

The U.S. Energy Information Administration on Tuesday raised its 2016 and 2017 forecasts for West Texas Intermediate and Brent crude prices. In its monthly energy outlook report, the government agency forecast an average price of $43.57 a barrel for WTI this year, up from a previous estimate of $42.83.
Brent crude is seen averaging $43.73 this year, up from the $43.03 June forecast. For 2017, the EIA sees an average of $52.15 for both WTI and Brent. The EIA left its U.S. oil production estimates for 2016 and 2017 at 8.6 million barrels a day and 8.19 million barrels a day, respectively. August WTI crude traded at $46.59 a barrel, up $1.83, or 4.1%………………………………………..Full Article: Source

Watch gold prices to profit from silver

Posted on 13 July 2016 by VRS  |  Email |Print

Gold prices are up 25 percent in 2016 while the surge in silver has seen prices rally 46 percent this year. Early in 2016, the silver price behavior stopped leading the gold price behavior. Silver reverted to its previous behavior of following the gold behavior but it has remained a very profitable trade.
Silver has an upside target of $26.00. That’s 30 percent higher from the current price near $20.00. Gold has an upside target near $1580, which gives a 16 percent gain from the current price near $1360………………………………………..Full Article: Source

TDS: $1,500 Gold Possible If Fed Downgrades Rate Forecast

Posted on 13 July 2016 by VRS  |  Email |Print

TD Securities sees $1,400 gold and says $1,500 may even be possible if the Federal Reserve further cools market expectations for interest rates. The metal has benefited from the “disarray” caused by the U.K. after its vote to leave the European Union, as well as global disinflation and low interest rates.
“Given that there are likely to be significant flows into gold and other precious metals seeking protection from the current turmoil, the record amount of net-long exposure should not impede the yellow metal from trending toward $1,400/oz,” TDS says. “If we see the Fed downgrade its rate forecast in the not-too-distant future, a move toward $1,500/oz is also very possible, particularly if the negative yield narrative grows even louder.”……………………………………….Full Article: Source

Why investors should expect the gold price to continue to rise

Posted on 13 July 2016 by VRS  |  Email |Print

Despite the move towards more ‘risk-on’ assets in recent days, investors should continue to expect the gold price to rise, according to Nitesh Shah, commodity strategist at ETF Securities.
Positive economic data from the US, coupled with the view that the Bank of England will boost stock markets, and maybe economic growth with an interest rate cut and perhaps more quantitative easing, has pushed many investors back into equities, with the US S&P 500 hitting an all time high, and the UK FTSE 100 advancing significantly from the lows achieved immediately after the EU referendum result………………………………………..Full Article: Source

Mounting copper stocks could weigh on price

Posted on 13 July 2016 by VRS  |  Email |Print

Warehouses licensed by the London Metal Exchange show 18% jump in metal storage this week. Copper has been flowing into warehouses in Asia, fuelling speculation about demand in China, the world’s biggest consumer of industrial metals, and the outlook for prices.
Copper sitting in warehouses licensed by the London Metal Exchange has jumped by 18 per cent this week to the highest level since February, totalling 234,750 tonnes, up from 140,000 tonnes in April………………………………………..Full Article: Source

Commodity rally will continue into second half of the year: Citi

Posted on 12 July 2016 by VRS  |  Email |Print

Commodity prices will buck the trend of the past two years and continue their rally into the second half of 2016, says Citigroup. The new report from Citi says that fund flows should continue to move into commodity-focused assets this year, including physically-backed exchange traded funds and long-only investment funds.
“This is in stark contrast to the last two years, during which time commodities sold off during 2H leading the asset group to be the worst performing as compared with equities and debt securities,” said analysts led by Edward Morse in a note to clients………………………………………..Full Article: Source

Hedge funds push oil prices lower: Kemp

Posted on 12 July 2016 by VRS  |  Email |Print

Continued hedge fund liquidation of former bullish bets on oil and the establishment of new short positions have kept crude prices on the defensive over the last month. Hedge funds and other money managers cut their bullish bets on crude oil by another 22 million barrels over the seven days ending on July 5.
Hedge funds have cut their net long position in crude futures and options by almost a quarter, from 633 million barrels to 485 million, over the last four weeks……………………………………….Full Article: Source

When Will the Oil Price Return to $100?

Posted on 12 July 2016 by VRS  |  Email |Print

Instead of a return to high long-term prices, the industry needs to find the oil price that can keep a lid on US shale activity, which analysts think will be $60 per barrel. The most pressing question on the minds of energy investors: How long will it take for the industry to work through the current period of oversupply and rebalance itself?
The answer: Not anytime soon. Current supply imbalances are such that oil production as of today is effectively running two years ahead of demand. Thanks to ongoing productivity improvements, cost reductions, and slowing decline rates, US shale’s cost-competitive growth potential is much greater than the market currently realizes………………………………………..Full Article: Source

Gold price rally helps producers climb world’s top 25 mining companies list

Posted on 12 July 2016 by VRS  |  Email |Print

Gold has consolidated its post-Brexit gains this month and continues to be the best-performing commodity so far this year, filling the pockets of most producers of the precious metal, a new study shows.
According to SNL Metals & Mining, gold-focused companies have climbed the most in the ranking of the world’s top 25 mining companies by market capitalization from April to June this year, helped by rising gold prices, declining mining costs and, most recently, global economic uncertainty as a result of the UK’s decision to leave the European Union in June………………………………………..Full Article: Source

Booms and busts in oil prices

Posted on 11 July 2016 by VRS  |  Email |Print

Better regulation in commodity markets could have mitigated oil-price bubbles and their fallout. Oil prices have been excessively volatile since the mid-2000s, ranging from $147 in 2007 to $30 in 2015, with sharp swings in between. Apart from the fallout of the global financial cycle (GFC), this volatility is a major reason for continued slow global growth.
Volatility leads to gainers and losers who create spillovers for each other, dampening growth. For example, India’s actual gains from the 2014 oil price crash were less than expected, since the slowdown in global export growth moderated gains. Commodity exporting nations are in dire straits………………………………………..Full Article: Source

Why an oil price crash remains unlikely

Posted on 11 July 2016 by VRS  |  Email |Print

There has been a lot of optimism returning to the energy markets of late as oil prices have climbed to the $50 a barrel region. Ironically, while a few years ago $50 a barrel would have been seen as an unthinkably low oil price, today it is regarded as much needed relief from prices that ran in the $25 a barrel region earlier this year.
Yet with the climb in prices, analysts are now starting to forecast prices per barrel of as much as $80 in the next year. That view is not the mainstream though. Instead most analysts are looking for oil prices to remain in the $50 range over the next year, and that has some investors forgetting about the possibility of a renewed downside in oil which could create more losses. ……………………………………….Full Article: Source

Gold outshines all commodities in 2016

Posted on 11 July 2016 by VRS  |  Email |Print

A more than 20 per cent growth in global gold demand during the first quarter of 2016 made the precious metal the best-performing commodity so far this year, the Dubai Chamber of Commerce and Industry said in its latest analysis. Global gold demand jumped by 21 per cent to 1,289.8 tonnes in the March quarter of this year, according to the World Gold Council.
Gold prices, along with other precious metals, such as silver, had been on a declining trend between 2011 and 2015 due to recurring worries about the global economic recovery, strong dollar, cheap energy cost and the consequent low levels of inflation………………………………………..Full Article: Source

Why This Aussie Firm Says Gold to ‘Certainly’ Hit $1,500, Maybe Even $1,900

Posted on 11 July 2016 by VRS  |  Email |Print

Another bullish call on gold. Surprise, surprise. But, this Sydney-based firm sees the potential of a $200-500 rally in gold because of what’s happening in Asia. “You have to look at the long term in gold…more people are coming into the market looking for gold and there’s not much there, so gold’s has got the potential to rally quite strongly,” Barry Dawes of Paradigm Securities said.
“I think we’re certainly going to see $1,400 quite soon and I think we’ll certainly see $1,500 by year end and maybe even that $1,900.” Positive sentiment towards the yellow metal has been prevalent with Bank of America Merrill Lynch being the latest among a slew of banks to up their gold price forecast for this year………………………………………..Full Article: Source

Metal prices lift on demand hopes

Posted on 11 July 2016 by VRS  |  Email |Print

Copper and other industrial metals have gained after better-than-expected US jobs data bolstered hopes for economic growth and metals demand. Copper recovered from the lowest levels in nearly two weeks and other metals extended gains after data showed US nonfarm payrolls marked up their largest increase since last October.
The data, however, was not conclusive enough to cause the Federal Reserve to abandon its cautious stance about raising interest rates………………………………………..Full Article: Source

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