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Commodities Briefing - Category | Price Watch more

Oil rebound? These banks think so

Posted on 21 July 2015 by VRS  |  Email |Print

Oil prices have faced something of a perfect storm over recent week, with the Greece crisis, high Saudi production and an Iran nuclear deal all weighing on the commodity. But despite its recent losing streak – which has seen Brent prices fall close to 10 percent over the past 30 days – a number of banks think oil prices are about to pick up.
Brent was trading around $56 per barrel on Monday morning, while West Texas Intermediate (WTI) was around $50. Although this is well off lows of around $45 and $42 hit earlier this year, it is still around 50 percent lower than in June last year………………………………………..Full Article: Source

Iran deal to keep crude oil prices in $55-58/bbl range

Posted on 21 July 2015 by VRS  |  Email |Print

Oil markets across the world are expected to remain oversupplied through 2015, following the nuclear deal with Iran. With Iran returning to the world’s oil market in some time, Brent crude is expected to settle at $55-58 a barrel. Such a development would continue to support India’s macroeconomic fundamentals, as risks of imported inflation would abate substantially.
Volatile oil prices would have prevented any further rate cuts by the central bank but with Iran signing the deal, the risk abates substantially. Oil analysts believe crude oil prices will come down further in forward markets by $5-10 a barrel, once Iran’s oil hits world markets. Iran is ready to ship 30 million barrels………………………………………..Full Article: Source

Oil drops near $50; analyst warns of ‘vicious selloff’

Posted on 21 July 2015 by VRS  |  Email |Print

Concerns that a global glut of supplies will continue to grow prompted another drop in oil futures on Monday to their lowest settlement since early April. The move lower led one analyst to warn that the market may soon experience a “vicious selloff.”
Still, U.S. prices managed to hold above $50 a barrel in the wake of a weekly decline in the number of active U.S. rigs drilling for oil. West Texas Intermediate August crude fell 74 cents, or 1.5% to settle at $50.15 a barrel on the New York Mercantile Exchange. That was the lowest settlement for a most-active contract since April 2. The August contract expires Tuesday………………………………………..Full Article: Source

Gold Price: This is how events in China and Greece have contributed to plummeting prices

Posted on 21 July 2015 by VRS  |  Email |Print

What’s happened to the price of gold? Gold is now the cheapest it’s been for more than five years. You can buy an ounce of gold for $1,088 (£697) – a drop of 4 per cent. This is the first time gold has traded below $1100 since March 2010. Some analysts are predicting that the price of gold will fall below $1000 an ounce by the end of the year.
Why? Gold is getting cheaper because people are choosing to invest in assets that might increase in value – like currency. Janet Yellen, the chair of the US Federal Reserve, said that interest rates might rise by the end of the year. This gives people confidence that the US economy is going to continue to improve – and that the dollar is going to strengthen with it………………………………………..Full Article: Source

Why is the gold price falling and where is it going next?

Posted on 21 July 2015 by VRS  |  Email |Print

The gold price has been falling since 2011 and this trend will be difficult to reverse. The US Federal Reserve plans to raise interest rates this year on the back of an improving American economy, and that is taking the shine off gold. Why? Because gold is a store of wealth for investors, but generates no returns from regular interest payments or dividend income.
Investors have been happy to park their money in gold over the past six years while returns from other ’safe haven’ assets have remained low and the economic backdrop has remained volatile. But, with borrowing costs set to rise, commodities, such as gold, are losing favour with investors, as higher returns can start to be generated elsewhere………………………………………..Full Article: Source

Why the gold price is tumbling

Posted on 21 July 2015 by VRS  |  Email |Print

The bear market in gold took a rather dramatic turn for the worse yesterday when the price gapped down to its lowest level in five years due a big sell order in Shanghai. Since peaking at above $US1800 an ounce in September 2011 it has been downhill all the way; the strategy of hedging exposure to fiat currencies and financial assets by buying gold bullion in one form or another after the financial crisis has turned out to be a very bad idea.
The non-appearance of inflation and the non-collapse of the US dollar have produced a bear market in all commodities, with the Bloomberg Commodity Index yesterday touching its lowest level since 2002. But gold, as always, has been a special case………………………………………..Full Article: Source

How China affects commodity prices

Posted on 20 July 2015 by VRS  |  Email |Print

Over the last 20 years, China has emerged as a major player in the commodities market. Whether it’s a global commodity super-cycle or a worldwide rout, it is often explained in terms of the ‘China factor’. Most commodity commentators devote a lot of attention to China because it is not just a large importer of many materials, it is also a prodigious producer of some.
So can we quantify the China effect on different commodity markets? Consider Chinese demand first. The consumption boom across many metals in the past two decades was driven largely by China. A World Bank report shows that China consumed about half the 91 million tonnes of metals produced globally in 2012. This was up from a mere 4 per cent in 1990. In the same period, metal consumption at the OECD countries, for instance, remained unchanged………………………………………..Full Article: Source

Shell forecasts oil price recovery to $90 by 2020

Posted on 17 July 2015 by VRS  |  Email |Print

The Anglo-Dutch energy giant is betting on crude rising to $90 a barrel by 2020, a key assumption in its move to buy rival BG Group for $70bn to help transform it into a leading player in the costly deep water oil production and liquefied natural gas markets. “We are not banking on an oil price recovery overnight. It will take several years but we do believe fundamentals will return,” said Andy Brown, upstream international director at Shell, who oversees oil and gas production outside North America.
“Until such time, we, like other companies, will have to make sure we stay robust,” he added, referring to deep spending cuts taken by oil companies in recent months in the face of a near-halving of oil prices since June last year. A rise in global supplies, mainly due to a sharp increase in output from US shale, has weighed on oil prices………………………………………..Full Article: Source

Gold Prices Headed to $2,000? Gruesome Supply and Solid Demand Say So

Posted on 17 July 2015 by VRS  |  Email |Print

It can’t be stressed enough; gold prices are setting up to provide big gains to investors. Just pay attention to supply and demand; you will notice how the precious metal’s market is improving fundamentally. We have been tracking what’s happening in the major gold-producing regions closely. To say the least; conditions are getting outright worse. Producers aren’t producing the yellow metal.
Consider this; between 2013 and 2014, gold production from U.S. mines declined roughly eight percent. U.S. mines produced 212,000 kg of gold in 2014 compared to 230,000 kg in 2014. This year, it looks like the mine production from the U.S. will be much lower than the 2014 figures. For instance, in the first three months of 2015, U.S. mines have produced 47,700 kg of the yellow metal. ……………………………………….Full Article: Source

Gold falls as precious metals hit by stronger dollar

Posted on 17 July 2015 by VRS  |  Email |Print

Gold has fallen to an eight-month low as precious metals struggle in the face of a strengthening US dollar. As bullion declined to $1,142.9 a troy ounce on Thursday, platinum — used in jewellery and catalysts in diesel cars — hit a six-year low, while palladium touched levels last seen in late 2012.
Analysts say the weakness for gold is being driven by expectations of a US central bank interest rate increase, bolstering the dollar, while weak physical demand in China, the world’s largest consumer, has also hurt sentiment. Traditionally a haven investment, gold has also failed to react to uncertainty in Greece or the slump in China’s stock markets in the past month………………………………………..Full Article: Source

Commodities: Off the Boil

Posted on 16 July 2015 by VRS  |  Email |Print

The recent commodity price ‘rally’ as some have described it has come to a halt. Further significant price gains in the near-term are unlikely. However, H2 2015 may provide some support for fundamentals. Nevertheless, returns will remain meagre and warning signs emanating from the macro environment (Grexit etc.) allude to the short-term nature of commodity investment flows.
Net inflows to commodities of almost $7bn in Q1 2015, followed by a month (April) when commodities outperformed most other asset classes (registering double-digit returns as oil prices rose 20%) gave promise to markets. But no sooner had the commodity bulls returned than the spectre of continued sluggish growth and amply supply came back to dent sentiment. Lets face it, the majority of commodities remain in good supply and so the run-up in prices Q1 proved short-lived………………………………………..Full Article: Source

Falling Oil Prices Stress Commodity Bearishness

Posted on 16 July 2015 by VRS  |  Email |Print

For almost 3 months now, oil prices have moved in a very narrow range. However, this month prices fell 15% in a matter of days, breaking that range and stressing the bearish sentiment among commodity investors. Some analysts point out that the decline was caused by a jump in rigs drilling for oil in the US.
Another factor to watch is the historic Iranian nuclear agreement with the US and five other world powers. This deal might have risen the bearish sentiment as Iranian oil output is expected to increase. Oil from Iran will take time to return, and will not have a market impact before next year, but given that the global petroleum market has an oversupply of about 2.5 million barrels per day, the mere prospect of new oil doesn’t help market sentiment………………………………………..Full Article: Source

Positive impact of lower oil price will be delayed due to counter-shocks, says IMF

Posted on 16 July 2015 by VRS  |  Email |Print

Oil exporting countries should continue to devise mechanisms to make up for the lost revenue such as increasing value added tax or corporate tax in their economies or to cut down on infrastructure spending which is high in many oil producing countries.
“I think the outlook for the global economy because of lower oil prices is certainly positive,” said Aasim Husain, Deputy Director of the Middle East and Central Asia department at the International Monetary Fund (IMF). Mr. Husain was responding to questions on an IMF staff paper, “Global Implications of Lower Oil Prices.”……………………………………….Full Article: Source

What Iran’s nuclear deal means for the oil price

Posted on 16 July 2015 by VRS  |  Email |Print

Oil prices have recovered after initially plunging over the deal reached with Iran’s nuclear program, as analysts ponder the details and the roadblocks that remain in its implementation. Brent crude oil fell from $US58.70 a barrel to $US56.50, as the world pondered a torrent of Iranian oil flooding the market. But by Wednesday, prices were back up at $US58.70.
“The devil is in the detail,” said ANZ senior commodities strategist Daniel Hynes. “Initially the market sold off on it – I think it was down 2 per cent on the original announcement – but prices have recovered somewhat after the details emerged………………………………………..Full Article: Source

Gold price falls to within sight of 5-year low

Posted on 16 July 2015 by VRS  |  Email |Print

On Wednesday, gold dropped to the lowest level since November last year after the US Federal Reserve said the world’s largest economy favours a rate rise this year. Futures contracts in New York with August delivery dates were priced as low as $1,141.90 an ounce down more than $10 from yesterday’s close following comments by Fed chair Janet Yellen in testimony to US politicians.
That was the lowest since November 7 when gold briefly dipped to $1,135 an ounce before recovering to end that day at $1,173 an ounce. For a sustained period below $1,150 an ounce you have to go back to April 2010………………………………………..Full Article: Source

Palladium Price Forecasts Keep Falling

Posted on 16 July 2015 by VRS  |  Email |Print

While palladium performed much better than its sister metal platinum last year, the white metal hasn’t been immune to a fall in the broader precious metals complex so far in 2015.
The palladium price has lost 10.75 percent in the past month and has fallen 18 percent, or $148, since the start of the year; it is now at about $656 per ounce. Platinum has lost 13 percent year-to-date, and is currently sitting dangerously close to $1,000 per ounce at about $1,032………………………………………..Full Article: Source

Global Implications of Lower Oil Prices

Posted on 15 July 2015 by VRS  |  Email |Print

While the dramatic drop in oil prices in the past year will mean significant losses in revenue for some exporting countries, consumers should be paying less for fuel—and have more money to spend. A new paper published by IMF staff suggests that higher spending will ultimately be good for global growth.
The decline in oil prices is certainly benefiting consumers, but not as much as we might have thought. Even though crude oil prices fell by about half between June of last year and by the end of the year, retail fuel prices on average globally have fallen by half as much, so by about a quarter, says Aasim Husain, co-author and deputy director in the IMF’s Middle East and Central Asia Department……………………………………….Full Article: Source

Iran nuclear deal: This is what it means for oil

Posted on 15 July 2015 by VRS  |  Email |Print

Oil prices reversed themselves and moved higher despite a historic nuclear deal that traders feared could flood the market with Iranian crude. Under the landmark agreement, economic sanctions on Iran would be lifted in exchange for restrictions on its nuclear program. As a result, Iran will now be able to rejoin the world economic stage and export its goods – including oil.
Brent crude fell as much as 2 percent to hit $56.67 a barrel early on Tuesday in response, but later changed directions to $58.42, a gain of about 1 percent. West Texas Intermediate was up more than 1 percent at $52.86. Natural gas was down 1.2 percent. Analysts said the swing in oil was due to the realization that Iran’s crude won’t be back on the market any time soon………………………………………..Full Article: Source

2 Factors that Could Send Gold Prices Higher

Posted on 15 July 2015 by VRS  |  Email |Print

Over the last few years, gold prices have been in the doldrums. With stock markets soaring to all-time highs, who wants to buy something that has no return? Well, things are about to change. Or should I say; are already changing in front of our eyes. For the following two reasons, gold prices are about to soar.
Reason #1: China - The recent crash in China’s stock market has helped many investors realize the risk in stock investing. From June 12th to July 8th, the Shanghai Composite Index plunged a staggering 32.1%. In recent weeks, more than 1,000 stocks dropped by more than the 10% limit posed by regulators. At the peak of the crash, more than half of all publicly-listed companies in China filed for trading suspension to save themselves from further tumbles………………………………………..Full Article: Source

ICE to scrap LBMA gold price seller’s premium

Posted on 15 July 2015 by VRS  |  Email |Print

ICE Benchmark Administration, which runs daily gold price-setting auctions used by mining companies to central banks, will remove a seller’s premium from next year. Following a market consultation, IBA will on Jan. 1 remove the 15 cents-an-ounce premium that’s added to the settled rate in the twice-daily LBMA Gold Price, it said in a statement Tuesday. It also said that if fewer than three direct participants are available to start an auction, it would publish a benchmark price without conducting the procedure.
IBA in March started administering the electronic auction that replaced the century-old London gold fixing, a ritual that had been taking place by phone. There are now 10 companies allowed to be direct auction participants, including Bank of China Ltd., which joined last month………………………………………..Full Article: Source

Silver prices set to hit US$21 an ounce

Posted on 15 July 2015 by VRS  |  Email |Print

Capital Economics has forecast that the price of silver will rise to US$21 an ounce by the end of 2016. In a note out last week, Julian Jessop chief global economist at the macro-economic, consultancy wrote that “silver does look under-valued”.
He explained that while silver closely tracks the price of gold it is like a ‘high beta’ version of gold, tending to climb further when the prices of both are rising and drop further when then are falling. The reason for this being that the silver market is smaller and less liquid………………………………………..Full Article: Source

Low prices to boost some China commodities imports

Posted on 14 July 2015 by VRS  |  Email |Print

Prices near multi-year lows could support some Chinese commodity imports in coming months, giving a boost to crude oil, iron ore and soybean shipments, but weak domestic demand is expected to keep other commodities in check. China’s crude oil imports surged 27 percent in June on a year earlier to the second highest level on record.
Soybeans imports had a similar jump as buyers took advantage of cheap and plentiful overseas supplies. “Given the very low commodity prices, I think there will be some restocking demand and that will support the import of commodities,” said Helen Lau, analyst at Argonaut Securities in Hong Kong………………………………………..Full Article: Source

Silver Price Remains in Long-term Downtrend

Posted on 14 July 2015 by VRS  |  Email |Print

It’s a strange situation - the long-term charts for silver continue to look awful, but there has been a quite dramatic improvement in its COTs, which now look positive, with readings that in the past have consistently lead to rallies. However, this doesn’t mean that any rally that develops soon will succeed in breaking silver out of its long downtrend.
Silver’s 8-year chart shows the as yet unrelenting downtrend from its 2011 highs involving a classic “staircase” decline. On this chart it looks set to drop again, but perhaps after another rally first towards the upper boundary of the downtrend channel………………………………………..Full Article: Source

Oil price has further to fall, says IEA

Posted on 13 July 2015 by VRS  |  Email |Print

Oil prices are set to come under further pressure from easing global demand and an expanding glut of crude while a rebalancing of the markets may last well into next year, the International Energy Agency has said. The IEA said it expected global demand growth to slow next year to 1.2m per day (bpd) from 1.4m this year - far less than needed to balance stubbornly growing non-OPEC and OPEC supply.
“The bottom of the market may still be ahead,” the IEA said in its monthly report. “The rebalancing that began when oil markets set off on an initial 60pc price drop a year ago has yet to run its course. Recent developments suggest that the process will extend well into 2016………………………………………..Full Article: Source

Oil prices fall as Iran nuclear deal seems likely

Posted on 13 July 2015 by VRS  |  Email |Print

Oil prices opened up lower on Monday as Iran and six world powers were close to nailing down a nuclear deal, while Greece and its creditors failed to find a bailout agreement over the weekend. The potential of Iran soon adding to global oil oversupply and the demand side weakening over China and Europe led several analysts to say that crude would fall further.
Iran and six world powers were on the brink of finding a nuclear deal that would bring sanctions relief in exchange for curbs on Tehran’s nuclear program. In Europe, the Greek debt crisis continued as political leaders argued late into the night at an emergency summit, so far without result………………………………………..Full Article: Source

Oil glut: Greece, Iran, China drive down energy prices

Posted on 13 July 2015 by VRS  |  Email |Print

Fear and fundamentals are driving down oil prices. The fear arises from the unknown risks of the Greek and Iranian negotiations, and the panic in China’s stockmarkets. These fears have acted as triggers, bringing much greater clarity to the fundamentals of an oversupplied oil market.
Oil has lately become a very volatile commodity. Early this year, it fell below $US50 a barrel. By mid-May, it had rebounded to $US67 a barrel, which was thought to be a “new normal” on which plans could be based. But in the last few weeks, prices fell almost 20 per cent — though they’ve bounced back a little in the past few days………………………………………..Full Article: Source

Global Concerns Have Market Volatility Up, Commodity Prices Down

Posted on 10 July 2015 by VRS  |  Email |Print

Whether real or orchestrated, this certainly has given some cause for concern to US equity markets. While there are obvious legitimate concerns economically, they don’t seem to warrant this type of movement up and down movement in US markets, making one look toward the algorithms and a lack of mid level trader liquidity as a culprit in the massive swings that we are starting to see.
It seems like a good time to make certain risks are quantified through long options or stop loss tools as these markets are not only unforgiving but also multi directional in the same session………………………………………..Full Article: Source

IMF sees average oil price of $59 per barrel in 2015

Posted on 10 July 2015 by VRS  |  Email |Print

A report from the IMF (International Monetary Fund) has found oil prices have rebounded more than expected, after falling by more than half a year ago. The findings were revealed in the latest World Economic Outlook which said the rise in the price of oil reflected higher demand and expectations that oil production growth in the US would slow faster than previously forecast.
It predicted the average price of oil to be $59 per barrel over the year. But the IMF warned despite the rise in oil prices, inflation in advanced economies remained broadly stable and well below inflation objectives………………………………………..Full Article: Source

Oil prices have fallen again, and a ‘negative feedback loop’ will push them even lower

Posted on 10 July 2015 by VRS  |  Email |Print

This week’s tumble in oil prices might not be the end of it. “While significant uncertainty remains around what long-term price levels will ultimately generate a new set of equilibria to create stability in both the macroeconomic and micro commodity markets, we do have confidence that they are likely lower than current long dated price levels,” Goldman Sachs’ Jeff Currie said.
Currie added that with credit remaining easily accessible for oil drillers and prices stabilized, producers are still pumping oil into an already oversupplied market. And so to Currie, the more than 50% decline we saw in oil prices last year still hasn’t balanced the market………………………………………..Full Article: Source

Warning: Hedge Funds See Gold Price Collapse in 2015

Posted on 10 July 2015 by VRS  |  Email |Print

Despite an underwhelming U.S. jobs report and turmoil in Greece, institutional investors are more bearish on gold prices now than at any point in history. With China’s stock market in freefall and Europe on the brink of chaos, many analysts predicted that investors would seek the relative safety of precious metals. Those predictions have been wrong so far.
A recent report from the Commodity Futures Trading Commission (CFTC) shows that some of the world’s largest hedge funds are unloading their bullish positions on gold futures. The value of futures contracts fluctuate based on where investors think the asset’s price is headed. If they are optimistic, investors amass “long” positions; if they are pessimistic, they take “short” positions………………………………………..Full Article: Source

Iron ore prices: the worst is yet to come

Posted on 10 July 2015 by VRS  |  Email |Print

While analysts say waning demand for steel in China and surging supply is set to push the iron ore price lower, Australia’s biggest iron ore miners are looking at the future with rose tinted glasses.
Rio Tinto’s CEO, Andrew Harding, told The Australian Financial Review on Thursday that volatility will recede and the iron ore price “is moving around its long-term average after coming off an unprecedented high that was never sustainable”. He maintains that the “long-term picture for iron ore remains sound”, and the commodity will “continue to be a wealth generation machine for Australia” BHP Billiton’s head also forecasts declining volatility………………………………………..Full Article: Source

Why is the iron ore price dropping?

Posted on 10 July 2015 by VRS  |  Email |Print

Iron ore hit its lowest price this decade on Wednesday night as oversupply concerns wracked a market already wary from financial crises in Greece and China as well as US plans to begin raising interest rates.
The iron ore benchmark price has haemorrhaged since the middle of June. On Wednesday night alone it lost 10 per cent, bringing the total lost in the last month to more than a third of its June price. “Commonwealth Bank economist Scott Rundell described this week’s decline as iron ore taking “the entire rusty cutlery set to the neck last night, including the cake server firmly in the jugular”………………………………………..Full Article: Source

Oil under $60 beyond 2016 suggests market rethinking shale

Posted on 09 July 2015 by VRS  |  Email |Print

The almost 10 percent nosedive in headline oil prices this week has many hallmarks of a shocking but short-lived slump, triggered by a confluence of external events and exacerbated by safety-seeking investors and momentum-chasing traders.
By Tuesday afternoon, the crowded race to the exit was winding down, with prices recovering from three-month lows as traders reassessed the factors they blamed for the worst slide in four months: Greece’s debt woes; China’s stock market meltdown; talks with Iran over its nuclear program; a stronger dollar; a rise in the number of U.S. oil rigs; a breach of key technical triggers………………………………………..Full Article: Source

Goldman: $50 oil crushes hopes for U.S. drilling recovery this year

Posted on 09 July 2015 by VRS  |  Email |Print

Goldman Sachs says lower oil prices will probably disappoint the U.S. petroleum industry’s hope of a drilling recovery in the second half of the year. The U.S. oil price’s recent fall to around $52 a barrel will rule out the possibility that oil companies will send 100 to 150 drilling rigs to U.S. oil fields this year – a bullish market expectation born out of two months of stable $60 oil, which ended late last week. Goldman Sachs analysts wrote they project only 20 to 50 rigs will return to work by the end of the year.
That $8-a-barrel difference could have big implications for the oil field job market: Each rig employs scores of workers, directly and indirectly. The nation’s land rig count has fallen 61 percent from its peak last October, and predictably, the oil field service industry’s workforce has shrunk dramatically since the beginning of the year, with the four biggest firms cutting a combined 49,500 jobs in the first half of the year………………………………………..Full Article: Source

Investors seek refuge in gold after price drop to nearly 4-month low

Posted on 09 July 2015 by VRS  |  Email |Print

Gold futures settled higher Wednesday, scoring a partial rebound after a drop to a nearly four-month low a day earlier as investors sought refuge in the metal. Investment interest in gold got a boost as the U.S. dollar weakened, a combination of unrelated events prompted a selloff in the main U.S. stock indexes and uncertainty continued to surround Greece, Iran and China.
Silver and copper also gained after concerns over China’s growth fueled hefty declines Tuesday for industrial metals. Gold for August delivery on Comex rose $10.90, or 1%, to settle at $1,163.50 an ounce. The metal shed $20 an ounce on Tuesday, as investors showed disappointment that gold failed to catch a haven bid against the backdrop of Greece’s fiscal turmoil………………………………………..Full Article: Source

Oil is grounded in a sub-$60 bear market

Posted on 08 July 2015 by VRS  |  Email |Print

The oil price is grounded in a sub-$60 bear market. On July 6, Brent crude fell over 6 percent on the back of worries about Greece and the prospect of an Iran nuclear deal. The latter has a much bigger, if delayed, impact. Oil steadied on July 7 to just above $57 a barrel, but plenty of other factors are likely to keep a lid on prices.
On one level, the steep drop looks overdone. True, the outcome of the Greek referendum has shortened the odds on its exit from the euro zone. But equity and bond markets greeted the news with relative calm on the assumption that the European Central Bank will respond to any signs of contagion by cranking up bond purchases………………………………………..Full Article: Source

Cramer: $30 oil could be around the corner

Posted on 08 July 2015 by VRS  |  Email |Print

While most investors are freaking out about Greece, Jim Cramer thinks it would be more prudent to take a closer look at the price of oil, which has much more of a direct impact to U.S. companies. The price of oil has been hit hard lately, dropping to about $50 during the day on Tuesday from $59 a week ago.
Cramer is still in shock, because when oil was hovering around $60 he was convinced that the independent oil companies might provide some real leadership in the market. But after the latest session of crude being put through the meat grinder, Cramer’s opinion has been thrown out the window………………………………………..Full Article: Source

Yes, China Can Push Gold Price To $64,000

Posted on 08 July 2015 by VRS  |  Email |Print

A new projection from Bloomberg has suggested that should China take on a gold standard then the metal would explode and go over more than $60,000 per ounce and would back the yuan currency. The report said that should China take it on it would need an exchange rate of around $64,000 an ounce, which would be 50 times the price of the bullion it is now.
Along with this in order to be able to make the exchange rate of a single ounce of the gold for each $64,000 the country would require around 10,000 metric tons of gold. This means that’s about 9 times the official holdings of the nation and 6% of all gold that has been mined around the world………………………………………..Full Article: Source

Commodities prices fall as Grexit fears build

Posted on 07 July 2015 by VRS  |  Email |Print

As stock markets decline and Greek bond yields soar, commodities markets are also mourning the result of Sunday’s referendum where Greece voted against accepting the terms of an austerity-focused bailout.
The price of Brent crude, the global oil benchmark, has slipped down 1 per cent to $59.7 a barrel. Copper traded on the London Metal Exchange has fallen 2.7 per cent to $5596 per tonne, as the red metal, which is viewed by many investors as a proxy for economic growth, takes the brunt of fears over the stability of the eurozone………………………………………..Full Article: Source

In the maelstrom of oil price news, has bias triggered trading mistakes? Petrodollars

Posted on 07 July 2015 by VRS  |  Email |Print

How often did one read this year that the oil market is in terrible shape – weak, lackluster, oversupplied, bearish, limp? That there were sharp losses last year as prices collapsed, spiraled down, crashed? Most of the words used to describe oil getting cheaper had a negative connotation.
To any casual observer or consumer of oil, however, the market could be seen in wonderful shape with pump prices more accessible than before. A commodity that is being produced in a far greater quantity than can be consumed has seen its price go down. So is there a bias in oil journalism focusing more on the potential gains or losses to producers or those “long” oil? A significant place to look is the trend of long-only investors pouring into oil futures contracts in various forms, which began in the mid-2000s………………………………………..Full Article: Source

Oil Prices Tumble Nearly 8%

Posted on 07 July 2015 by VRS  |  Email |Print

Oil prices on Monday skidded to their biggest single-day declines in more than three months, as gyrations in Chinese stocks and the prospect of more crude from the U.S. and Iran revived worries about the global supply glut.
China’s stock markets have plunged in recent weeks, which sparked worries among investors about oil demand in the world’s second-largest consumer. Iranian officials also have signaled they want to export even more crude than traders had expected if diplomats can hammer out a final deal on Iran’s nuclear program in the coming days………………………………………..Full Article: Source

Gold Price Forecast: This Could Send Gold to $5,000

Posted on 07 July 2015 by VRS  |  Email |Print

Over the next few months, you could make triple-digit gains in one of the world’s most hated commodities: gold. No, you won’t get rich quick. But as I’m about to show you, some of the world’s smartest investors have been quietly accumulating precious metals. And before the move is over, we could see prices more than double. Let me explain.
These are hard times for resource investors. The past three years have seen big declines in gold price, with the metal trading more than a third below its peak of $1,900 an ounce. A number of investment banks have slashed their gold price forecast for the rest of the year………………………………………..Full Article: Source

Gold Price Gravitating Lower Towards $1000

Posted on 07 July 2015 by VRS  |  Email |Print

Gold has not even been able to muster a rally on the Greek crisis, which is a bad sign, especially as the dollar looks like it is preparing to break out upside from a large consolidation pattern. On its 8-year chart we can see that gold is still in the large downsloping consolidation pattern that has been going on for 2 years now. Goldbugs like to think that this trading range is a pattern is a base pattern, and while it may be, this is viewed as wishful thinking.
Instead it looks like the B-wave of a large A-B-C correction from gold’s highs in 2011. If it is, then the C-wave, which is suspected to be imminent, will take gold down at least to the strong support in the $1000 area, and probably lower towards the lower boundary of its large downtrend channel shown - if it gets there we are looking at $850 - $870………………………………………..Full Article: Source

Gold price: Hedge funds have NEVER been this bearish

Posted on 07 July 2015 by VRS  |  Email |Print

Gold is down nearly 10% from its 2015 highs and the pervading negative sentiment – despite all the factors working in the precious metal’s favour – is nowhere more evident than in the positioning of speculators on the futures market. Last week large gold futures investors such as hedge funds, referred to as “managed money”, slashed overall bullish positions by a whopping 55%.
Bets that prices will rise only amounted to 21,480 lots or 2.15 million ounces in the week to June 30 according to the Commodity Futures Trading Commission’s weekly Commitment of Traders data. That’s more than 14 million ounces below levels hit in January this year when gold reached its 2015 peak. The net long positioning is also the lowest since October 2006 when gold was worth less than $600 an ounce………………………………………..Full Article: Source

Global Financial Turmoil, Gold Price Doesn’t Move

Posted on 06 July 2015 by VRS  |  Email |Print

It’s remarkable the Greek tragedy has had no influence on the gold price in recent weeks. We’ve heard repeatedly Europe and Greece could not reach a deal for an extended bailout, are financial markets suffering from Euroscrisis fatigue? Team Dijsselbloem-Juncker states they stretched all they could and offered the Greek government a reasonable deal that would require more reforms the Hellenic Republic, but team Varoufakis-Tsiparas will not agree with the proposed reforms.
On Thursday June 25 another final meeting ended with no success, while Greece had a payment of €1.6 billion to the IMF coming up on June 30, negotiations were pushed to Saturday June 27. Dangerous territory, a bank holiday usually kicks of in the weekend when financial markets are closed………………………………………..Full Article: Source

Oil Price Forecast: Shale 2.0 Will Keep Supply Abundant

Posted on 03 July 2015 by VRS  |  Email |Print

When we first started getting substantial oil from fracking and horizontal drilling, the news about costs indicated that oil production would decline at a fast rate when prices were low, pushing prices back up. New data, however, argue for rising productivity of shale oil development—meaning plenty of petroleum to keep prices low.
Price cycles vary widely across industries based on how much of total cost is up-front expense versus on-going expense, as I explained in the best book about economics for business. When costs are mostly front-loaded (oil, airlines, ocean shipping) and capital assets last a long time, then price cycles are volatile………………………………………..Full Article: Source

China clamours to set global gold prices

Posted on 03 July 2015 by VRS  |  Email |Print

A bored security guard walks around the entrance hall of an unremarkable 11-storey building in downtown Shanghai, desperate to kill time. The receptionist, a young Chinese woman, is flopped across her desk, half-asleep. It’s a mid-June afternoon at the Shanghai Gold Exchange (SGE), China’s one-and-only trading platform for the yellow metal, but the place is not exactly bustling with activity.
“We are quite recent, nothing like the century-old exchanges of London and New York. All trading transactions here are handled electronically. That’s why it’s quiet,” said Yang Ming, one of the first employees at the SGE. The SGE’s Main Board, where Chinese domestic investors buy and sell gold, occupies four floors of the building………………………………………..Full Article: Source

Palladium prices bounce from oversold levels

Posted on 03 July 2015 by VRS  |  Email |Print

Precious metals had a volatile day – at the day’s lows they were down 0.9 percent on average, with silver off 1.7 percent at one stage, while they ended the day mixed with palladium up 0.9 percent, while gold, silver and platinum prices closed down 0.5 percent, with gold at $1,173.50.
Many of the base metals spiked lower on Tuesday; at the day’s lows prices were down an average of 3.9 percent, skewed by an 8.5 percent drop in nickel and a 6.9 percent drop in tin. The sell-offs turned into spikes with the complex closing down an average of 0.6 percent, with nickel closing the day up 1.8 percent, while tin closed off 3.3 percent………………………………………..Full Article: Source

U.S. crude prices tumble most since April on surprise stock build

Posted on 02 July 2015 by VRS  |  Email |Print

U.S. crude prices fell 4 percent on Wednesday, posting their biggest daily drop since April after oil stockpiles in the United States rose for the first time in more than two months. The selloff was a jolt to crude traders and investors who have seen U.S. prices in fairly tight trading ranges over the past 10 weeks versus sharper moves down in European oil.
But many were not counting yet on a sustained break lower, pointing to the summer demand for oil in the United States, which seasonally supports prices through August. “I don’t think the transition to another price freefall will happen as quickly this time,” said Scott Shelton, a commodities specialist, who also trades energy, for broker ICAP in Durham, North Carolina. “I see a slower grind lower and I don’t think this the tipping point.”……………………………………….Full Article: Source

Oil Prices Hit Two-Month Low on U.S. Inventory Data

Posted on 02 July 2015 by VRS  |  Email |Print

The U.S. oil glut is growing again, spurred by a sharp ramp up in production and threatening to put renewed pressure on crude prices. U.S. crude-oil stockpiles rose last week for the first time in nine weeks, according to a Wednesday report from the Energy Information Administration.
That unexpected increase comes on the heels of data released Tuesday showing that the nation’s oil producers ramped up output in April to the fastest pace since 1971. The news sent oil prices skidding to their lowest level in two months on Wednesday………………………………………..Full Article: Source

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