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Roubini: Combination of Factors Weighing on Commodities (Video)

Posted on 31 July 2015 by VRS  |  Email |Print

Roubini Global Economics Chairman Nouriel Roubini talks about the factors affecting commodity prices and the reduced pricing power of OPEC. He speaks on “Bloomberg Surveillance.”……………………………………….Full Article: Source

Is it Time to Buy Commodities?

Posted on 31 July 2015 by VRS  |  Email |Print

A quick glance at recent headlines would lead a reasonable person to assume that this year’s big losers are Greek and Chinese stocks . Yet, despite all the furor in the news , the Athens Stock Exchange is down less than 5 percent year-to-date, while the Shanghai Composite remains up more than 10 percent, according to Bloomberg data.
The real damage has been in the commodity complex. Through late July, year-to-date crude oil prices were down around 10 percent, platinum prices were off nearly 20 percent and coffee prices were down almost 30 percent, Bloomberg data shows. Based on the Bloomberg Commodity Index of 22 commodities, the overall complex is now trading at a 13-year low. Several factors account for the sell-off………………………………………..Full Article: Source

The Real Reason Gold Prices Are Falling

Posted on 31 July 2015 by VRS  |  Email |Print

Gold is in the news for all the wrong reasons at the moment. The price of the metal tumbled this month, maintaining its downward trend for the year. In fact, bullion had its worst month in over two years in July. At US$1,092, an ounce of gold is now worth what it was back in 2010.
Its future prospects, if analysts are to be believed, are worse still. A recent Bloomberg survey suggested that prices could drop to US$984 an ounce by January. That would represent a 10% decline from its present price point. A separate Bloomberg survey highlighted that over half of respondents believe gold is heading for its third consecutive annual loss in 2015………………………………………..Full Article: Source

Here’s Why Silver Prices are About to Soar

Posted on 31 July 2015 by VRS  |  Email |Print

If you’re looking to get rich in precious metals, this might be the most important message you’ll ever read. Because today, I’m going to show you why silvers prices could soon soar through the roof. If you want to get in on this opportunity, then you have to act fast.
Let me explain. If you take a look at what has been going on in the silver futures market, you’ll see that the grey metal is being oversold. At the beginning of this year, open interest in silver futures was around 150,000 contracts. Open interest refers to the number of futures contracts that are not closed or delivered. By July 28th, open interest in silver futures increased to around 190,000. That was a 26.7% increase in a less than seven months!……………………………………….Full Article: Source

Forget whether $100 silver is possible, how about $1000?

Posted on 31 July 2015 by VRS  |  Email |Print

I don’t know of many charts out there that a bullish investor since 2011 would look at with more disgust than the silver chart. It has been an exceptionally painful experience for those bullishly inclined since 2011. In fact, silver has dropped 70% from its 2011 heights to its recent lows, and it is still not done. But this story certainly has a “silver lining” for those who are willing to be a bit more patient.
On Aug. 30, 2011, I wrote my first public column about silver, which called for a market top in silver with a shorting target of 42.90, and that it must remain below 44.30 for the downside to ensue. Within the same column, I provided a downside target of 26.80 in the futures………………………………………..Full Article: Source

Gold price not being driven by fundamentals

Posted on 30 July 2015 by VRS  |  Email |Print

Since around mid-June, gold prices have come under substantial selling pressure. One of the main drivers behind this fall has been the on-going debate about interest rates. While the general narrative supposes that higher interest rates will have a negative impact on gold, I have often stated that this assumption is not correct.
The historical record shows that gold tends to rise with nominal interest rate rises – as was seen from 2004 to 2008 and in the 1970s – and the Fed is unlikely to raise rates in any meaningful way while deflationary forces persist. According to the WGC, although higher interest rates would make the dollar more attractive to investors looking for higher-yielding assets, the current narrative that this scenario would be bearish for gold is incorrect………………………………………..Full Article: Source

Warren Buffett once said that Gold is a way of going long on fear. Do you agree?

Posted on 30 July 2015 by VRS  |  Email |Print

The world market was awash with a swarm of gold bugs after the financial crisis of 2008. Gold bugs are advocates of investments in Gold as a safe haven and a guard against financial Armageddon, hyperinflation, currency collapses and geopolitical troubles.
A few years ago, gold bugs argued the precious metal was a can’t-miss investment given the ultra-loose monetary policies around the world and the prospect of higher inflation. However, you can’t find many gold bugs as the metal prices have taken a big tumble. The cumulative returns since 2010 for gold HAS almost BEEN nil compared to a return of 70 per cent by Dow Jones Industrial Average and 57 per cent by BSE S&P Sensex………………………………………..Full Article: Source

Goldman says Chinese metals in for a ‘hard landing’

Posted on 30 July 2015 by VRS  |  Email |Print

China’s statistics pose multiple difficulties for analysts, especially since they were called “man-made” by the current premier, Li Keqiang, in a US diplomatic cable. The country grew at 7 per cent in the second quarter of this year according to Beijing, but commodity prices, especially metals, have fallen to some of their lowest price levels in six years.
That is leading analysts to take a new stab at working out just how large the slowdown in commodity demand really is in the world’s biggest consumer. Working out China’s demand is not easy, however. In many cases, data are obfuscated by imports from Hong Kong, a Chinese territory, and the practice of importing metal as collateral to obtain bank loans………………………………………..Full Article: Source

How bad is July proving for commodities?

Posted on 29 July 2015 by VRS  |  Email |Print

Concerns about a slowdown in China, renewed strength in the US dollar and persistent supply concerns have combined to make it an ugly July for commodities. But just how bad has it been? The S&P GSCI total return index, which tracks the price of 24 commodities, has fallen through the bottom it reached during the the financial crisis and is at its lowest level since February 2002, writes Mamta Badkar.
Its 13.6 per cent decline this month makes July the seventh worst month on record for the index which dates back to 1970, according to data from S&P Dow Jones Indices. All of the 24 commodities in the index are down for the month, with the exception of lean hogs. Losses for the commodities in the index have only been so widespread once before - in September 2008………………………………………..Full Article: Source

Why China, commodities won’t sway Fed: Ex-Fed prez

Posted on 29 July 2015 by VRS  |  Email |Print

As the Fed headed into its two-day meeting, former Richmond Fed President Al Broaddus said Tuesday it’s a “very close call” on whether policymakers will decide to increase interest rates for the first time in nine years in September or December.
“I think the expectation right now probably has to be December,” he told CNBC’s “Squawk Box”—though he personally would like to see a September hike. “I think they’d like to get on with it. And they should get on with it.” The motivation behind his urgency has nothing to do with worries about a “big bulge” in inflation around the corner, said Broaddus. “I’d just like to see us get it off the table. … It’s a distraction.”……………………………………….Full Article: Source

10 Reasons to Love the Oil Price Drop

Posted on 29 July 2015 by VRS  |  Email |Print

Don’t let tumbling oil prices darken your outlook on stocks or the economy. Yes, U.S. crude prices have dropped into an official bear market, down around 20% since the beginning of June, which will undoubtedly hurt the oil industry and companies like Exxon Mobil (XOM) and BP (BP).
But there are a number of benefits from the decline. Here are 10 of them: Stocks Tend to Rally After Oil Price Drops. When the price of oil goes down, stocks tend to surge. That’s the conclusion of a study published in The Journal of Financial Economics in 2008 by professors Gerben Driesprong, Ben Jacobsen, and Benjamin Maat. They found that when oil prices moved down one standard deviation (that’s a price movement of about 11%) then stocks would rally by 1% the next month………………………………………..Full Article: Source

As Commodities Tumble, Don’t Count Out Gold

Posted on 28 July 2015 by VRS  |  Email |Print

The commodity collapse is undeniable. Just look to 2015 year-to-date returns: Oil has shed 16%, Nickel is down 25%, wheat has lost 15%, and sugar has plunged 28%. Yet the plunge in commodity prices doesn’t seem to be occurring in unison with the pace of global economic activity.
Precious metals seem the most oversold as judged by CFTC managed money speculative positions – perhaps the reasoning for Monday’s $9 bounce in COMEX August futures, which have gold at $1094.50, or $22.20 higher than Friday’s contract low price of $1072.30………………………………………..Full Article: Source

Global Growth Worries Pummel Commodities

Posted on 27 July 2015 by VRS  |  Email |Print

Investors are bailing on commodities amid mounting worries about the pace of global growth. New data showing China’s factory activity hit a 15-month low and a leaked Federal Reserve memo betraying concerns about how fast the U.S. is growing added to concerns Friday and accelerated the selloff of commodities—from oil to gold to copper.
Money managers reduced bets on higher oil prices to their lowest level in 2½ years, while ramping up bets on lower copper prices to their most bearish in two years, according to weekly data from the Commodity Futures Trading Commission. Money managers also turned net-bearish on gold futures and options this past week for the first time ever in data going back to 2006………………………………………..Full Article: Source

The negative feedback loop broadens the commodities sell-­off

Posted on 27 July 2015 by VRS  |  Email |Print

Goldman Sachs have been arguing since 2013 that commodities are caught in a “negative feedback loop between excess production capacity, US dollar appreciation and weaker EM economic growth”. They recently termed these three key themes the 3D’s of macro – deflation (excess production capacity and rising productivity), divergence (stronger US dollar and weaker EM currencies) and deleveraging (significant EM credit and macro imbalances).
“They are not only at the center of all of our views but have been a decade in the making and hence will likely take years to play out. Further, they are mutually self­-reinforcing. Lower commodity prices reinforce the US recovery and dollar appreciation; while weaker commodity currencies keep downward pressure on commodity cost curves (mainly through lower wage and energy costs),” say Goldman………………………………………..Full Article: Source

Here’s why gold is doomed

Posted on 27 July 2015 by VRS  |  Email |Print

A little less than four years ago, the world looked like it was about to end and gold hit an all-time high of $1,895 an ounce. The United States had manufactured a debt crisis, and Europe hadn’t been able to manufacture a solution to its actual debt crisis, so panicky investors sought safety in the same place they had for 5,000 years: a shiny rock.
The only problem, as you might have noticed, is that the world did not, in fact, end. It’s still here, so gold prices aren’t. The yellow metal has fallen 42 per cent from its peak and 8 per cent in just the last month, despite the fact that the Federal Reserve has printed more than $1.5 trillion in this time. That, after all, is what gold aficionados said would make its price go to the moon, if not infinity and beyond. So what’s happened? Well, exactly what economists said would happen………………………………………..Full Article: Source

Gold price meltdown points to its waning lustre

Posted on 27 July 2015 by VRS  |  Email |Print

Historically, gold buying has been fuelled in a scenario when the U.S. dollar has been weakening. This is how gold came to be bestowed a ‘safe haven’ status. The sharp decline in gold price early last week and the subsequent tepid buying of the metal in international markets point to gold’s clear falling out of favor among investors at least for now.
Gold fell below the $1,100 per ounce level and sought its lowest point since April 2010 while in India, it slid below Rs 25,000 per 10 gram levels, falling to its 5-year lows. An improving U.S. economy, a consequently stronger dollar, an expected rise in interest rates by the U.S. Federal Reserve and an expected slowing of demand for gold from China have been attributed as key factors for the bearish streak last week………………………………………..Full Article: Source

2017 could prove to be gold’s ‘magic’ year

Posted on 24 July 2015 by VRS  |  Email |Print

Gold might have lost 40 percent of its price over the last four years, capping a stellar 10-year bull run, but analysts are already predicting a possible bottom for the precious metal. Hovering around a five-year low on Thursday at $1,102 an ounce, gold has been hit by low inflation, a stronger dollar and fears over Chinese demand.
The precious metal has recently seen its longest losing streak in nearly two decades and a rout on Monday led to its deepest losses in nearly two years. Many analysts like Sandy Jadeja, chief market strategist at Signal Pro, see more short-term bad news for bullion. But, he told CNBC this week that 2017 would be where he starts “stepping in” to add more to his portfolio………………………………………..Full Article: Source

Gold: The Unusual Commodity

Posted on 24 July 2015 by VRS  |  Email |Print

Gold has had a challenging week. Its price has been very volatile due to the nature that it is driven by investor sentiment and economic confidence. Gold it is a peculiar commodity, in so far that it is very light considering its value and doesn’t spoil. Unlike corn or coffee it cannot be consumed, therefore it doesn’t have a kind of fundamental demand.
Yes, it is true that it can be demanded to be transformed into jewellery, but they are also a store of value. Therefore investors tend to seek shelter in gold, when times appear destitute………………………………………..Full Article: Source

Gold Price Headed to $450.00? $2,000 is More Likely

Posted on 24 July 2015 by VRS  |  Email |Print

A friend recently said to me, “No matter how you look at it, the gold price is going down to $450.00.” He argued that there’s simply no reason for the yellow metal to trade at $1,100 now.
He also added, “All the problems everyone was worried about are slowly diminishing and the precious metal is simply reacting to it.” Here’s a little background: he’s a trader. He looks for opportunities on a short-term basis and rarely bothers holding any position for longer than one month………………………………………..Full Article: Source

Is gold’s 50% bull market fall the launchpad for $8,800 an ounce?

Posted on 23 July 2015 by VRS  |  Email |Print

Will the author of ‘Hot Commodities’ and the man who spotted the boom in the sector before anybody else, Jim Rogers now start buying gold? He said earlier this year that he would when the bull market showed a 50 per cent retracement. That is to say the gold price had fallen to halfway between the $287 an ounce it was in 2000 to the $1,923 it reached in 2011.
Rogers astutely noted that he did not know a commodity market that had not corrected in this way before powering very much higher, and that has now happened. Perhaps he has already been out bargain hunting. After all that’s how this ex-hedge fund manager made another fortune in the 2000s, ahead of everybody else. He parked his money in commodities and went off for a three-year holiday with his then girlfriend and now wife………………………………………..Full Article: Source

Gold tumbles on global commodities rout, falling prices ahead of Fed’s rate hike prospects

Posted on 22 July 2015 by VRS  |  Email |Print

The rout in commodities deepened with prices heading for the lowest close since 2002 as the prospect of higher US interest rates sent gold tumbling. Raw materials are losing favour with investors as the dollar gains amid signals from Federal Reserve Chair Janet Yellen that the central bank may raise rates this year on the back of an improving US economy. Higher borrowing costs curb the attractiveness of commodities such as gold, which doesn’t pay interest or give returns like assets including bonds and equities.
The Bloomberg Commodity Index dropped as much as 1.1 per cent, falling for a fifth day in the longest stretch of declines since March.Gold futures sank to the weakest in more than five years while industrial metals, grains, Brent crude and US natural gas also slid as a measure of the dollar climbed to the highest since April 13………………………………………..Full Article: Source

How Low Can Gold And Silver Go?

Posted on 22 July 2015 by VRS  |  Email |Print

On Sunday afternoon, I published a viral piece called “Did A Major Gold And Silver Breakdown Just Begin?” in which I explained that gold and silver may be on the verge of an imminent sell-off if key technical levels were broken. I showed that wedge patterns had formed in gold and silver for the past two years, and these patterns may indicate the resumption of the 2011 to 2013 bear market when broken.
Amazingly, when gold and silver opened for trading on Sunday night, they experienced stunning flash crashes that caused them to slice clearly below the $1,130 and $15 technical levels I showed in the piece………………………………………..Full Article: Source

China’s Commodities Crash Will Not Make Australia The Next Greece

Posted on 21 July 2015 by VRS  |  Email |Print

It’s entirely possible that the Chinese economy is in the middle of a massive crash: there’s well informed people asserting just that. It’s also entirely possible that Australia won’t have a happy time of it if that is indeed so: the country has waxed very fat off the commodities boom as China has developed at breakneck speed.
However, there’s then those saying that this will mean that the Australian economy will then suffer the catastrophe that has befallen Greece: and this just ain’t so. That is to misdiagnose what has happened to Greece: it’s not that its terms of trade changed, but that it wasn’t allowed to use the simplest and best method of altering an economy to deal with changes in the terms of trade………………………………………..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

The biggest secret in the gold market for the past six years is revealed

Posted on 21 July 2015 by VRS  |  Email |Print

One big mystery in the gold market has kept anyone interested in the precious metal guessing for the past six years: how much gold does China hold? Well, now we know. At the end of last week, China revealed the scale of its current gold holdings. And judging by the market reaction, it was a massive anti-climax… China’s hanging on to a lot less gold than anyone thought.
In 2009, China held 1,054 tonnes of gold. Now China is holding 1,658 tonnes of gold. That’s a jump of nearly 60% on 2009. By sheer size of stash, this makes China the fifth-biggest holder of gold in the world, overtaking Russia. (France, Italy, Germany and the US hold more, with the US holding the most)………………………………………..Full Article: Source

Did A Major Gold And Silver Breakdown Just Begin?

Posted on 20 July 2015 by VRS  |  Email |Print

In late-June, I wrote a piece called “Why You Should Watch This Giant Chart Pattern In Gold And Silver.” In this piece, I showed that gold and silver have been building a two year-old wedge pattern – a chart pattern that often leads to sharp moves in the direction of the breakout.
Since then, precious metals have fallen sharply due to the calming of Greece-related fears, the stronger U.S. dollar, and lower oil prices. The latest gold and silver breakdown brings the metals dangerously close to breaking down from the wedge patterns, so I will analyze them further in this piece………………………………………..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

Not a great scenario for gold bugs

Posted on 17 July 2015 by VRS  |  Email |Print

The dollar is rallying again and US borrowing costs — as measured by benchmark bond yields — are nudging to the top of their recent range. As we’ve mentioned before, that’s not a great scenario for gold. Because the main quote for the yellow metal is in dollars, the bullion price tends to fall as its cost is adjusted when the buck strengthens.
Gold is also seen by some as a competitor to the greenback, so the idea that the market wants dollars can mean investors see less need to shift out of fiat currency and into bullion. Higher interest rates increase the “opportunity cost” of holding the non-yielding metal………………………………………..Full Article: Source

Gold is on the cusp of a ‘major breakdown’: Technician

Posted on 17 July 2015 by VRS  |  Email |Print

Gold bugs simply can’t catch a break. After starting 2015 with a bang, bullion made a new year-to-date low this week as Fed Chair Janet Yellen reiterated plans to raise interest rates later this year. The precious metal is now more than 12 percent from its January high, and according to one technical analyst, it could be on the “cusp of a major breakdown.”
“I think we need to be prepared for what the biggest casualty of a rate hike could be, and that’s gold,” Todd Gordon said Thursday on CNBC’s “Trading Nation.” By Gordon’s chart work, gold has broken through a key trendline that’s been in place since 2001………………………………………..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

Look, Don’t Freak Out About Iranian Oil Flooding the Market

Posted on 16 July 2015 by VRS  |  Email |Print

Iranian oil will soon hit the global market, thanks to sanctions being lifted as part of the historic deal reached yesterday to regulate the country’s nuclear program. Some are suggesting that this will flood global markets with oil at a time when prices are already incredibly low (thanks, in part, to high production from the US and Saudi Arabia).
So, should you go out and buy a gas-guzzler and scrap your plans to save up for an electric car?Uh, no. To the extent that an increase in Iranian oil production will have an effect on the global price of gas, it will be slight and delayed.“Most of what is assumed can be delivered [from Iran] has already been priced into the market,” says Sarah Ladislaw, director of the Energy and National Security Program at the Center for Strategic & International Studies………………………………………..Full Article: Source

Gold Price Forecast: Here’s Why Gold Prices Could Be Going a Lot Higher

Posted on 16 July 2015 by VRS  |  Email |Print

Some people are saying that the yellow metal is losing its shine. They have a point, as gold prices have plunged quite dramatically during the past few years. However, we shouldn’t be too fixated on the current gold prices. They are a result of emotional trading, extreme speculation, and possible manipulation. Looking ahead, the fundamentals of gold will eventually be priced in.
Let’s look at inflation first. The money printing by the Federal Reserve was at unprecedented levels. Since the Great Recession started in 2008, the Fed has increased money supply by 67%, or more than $5.0 trillion! Intuition suggests that when more money is chasing the same basket of goods, each good is going to command a higher price. But why don’t we see it happening?……………………………………….Full Article: Source

Silver Pretty, Silver Ugly

Posted on 15 July 2015 by VRS  |  Email |Print

The big picture in simple terms: US national debt is huge, ugly, unpayable, and accelerating higher. Silver Eagles are pretty and are priced low. Silver prices will increase erratically, driven higher by a devalued dollar, along with increasing debt.
Silver is currently at the low end of the silver to national debt ratio. Silver is currently at an 81 month cycle low………………………………………..Full Article: Source

Barclays Is Negative About Commodities in Q3.

Posted on 14 July 2015 by VRS  |  Email |Print

Barclays see the greatest upside potential in the commodity area for Copper. In a research report revealed today, 12 July 2015, Barclays has shared its negative outlook for commodities in Q3. On April 20, Barclays announced plans to to exit most of its commodities activities which is in line with the negative expectations revealed.
Commodities revenue at the 10 largest banks fell 18 percent last year amid reduced volatility, Coalition, a London-based analytics company, said in February. At the same time, regulators are concerned that lenders might control prices if they both own and trade raw materials, or suffer losses that would endanger the financial system. Deutsche Bank AG and Bank of America Corp. are exiting some commodities activities, while JPMorgan and Morgan Stanley are selling units………………………………………..Full Article: Source

Gold price manipulation: Who really calls the tune?

Posted on 14 July 2015 by VRS  |  Email |Print

Perhaps the question should be are precious metals prices manipulated – or indeed are all commodity prices manipulated? The answer to these questions, almost certainly, is a resounding yes. Virtually anything traded on an exchange of any kind is open to manipulation by those with deep enough pockets, or those prepared to take the risk of being bankrupted if massive trades on margins go wrong.
But gold is something of a special case as the principal accused manipulators of last resort are the gold establishment – central banks and governments supported by the bullion banks………………………………………..Full Article: Source

Is The Commitment Of Traders Report For Gold Really That Bullish?

Posted on 13 July 2015 by VRS  |  Email |Print

Much has been made of a ‘record short position’ in precious metals held by the speculator trader category, but it may not be as bullish for price as many expect. I continue to believe that we have made a major high at $1232 in May, and can expect to see new lows in gold over the next few months. In the near term we should expect a brief short covering rally before the decline resumes.
Well I’m not quite sure whether to call last week’s forecast a win or a loss. We got a spike higher on the back of the Greek referendum as predicted, but the pop was muted (about 0.5%) and extremely short lived given that it sold off immediately and proceeded to make new local lows………………………………………..Full Article: Source

OPEC’s silence is deafening

Posted on 10 July 2015 by VRS  |  Email |Print

Well I see that the rest of the world is trying to hold its ground this morning, but it’s still America that has to lead. After the EIA stats, you’d think that OPEC would finally get the picture. It’s as clear as Justin Bieber’s boat picture and the longer they hold out on a production cut, the longer they look a lot like the highlight of that pic.
In the United States we’re continuing to support the OPEC oil portfolio by adjusting week to week who falls in favor and gets to the United States. Last week the Saudis (+286K b/d), Iraq (+102K) and finally Nigeria (27K) found their way into the refineries and pockets of U.S. consumers………………………………………..Full Article: Source

Gold ETFs Fail The Volatility Test

Posted on 10 July 2015 by VRS  |  Email |Print

In my experience as an investment advisor, gold bullion and other precious metals are often very polarizing asset classes to own. You either love gold because you’re worried about inflation, currency manipulation and market volatility, or you hate it because you have no idea when it actually works to hedge those themes.
Anyone who has been watching the price of the SPDR Gold Shares ETF (GLD) over the past four years has seen the deflationary pressures this yellow metal has succumbed to. GLD peaked near $185 back in 2011 and is currently trading near its lowest levels of this bull market at $110. That represents a total decline from peak to present day of 40%………………………………………..Full Article: Source

How much worse can the commodity bear market get?

Posted on 09 July 2015 by VRS  |  Email |Print

While the world worries about China, Europe worries about Greece and the UK worries about Osborne’s budget, today here at Money Morning we turn our heads to something more useful – industrial metals. Although at the moment, judging by their price, there aren’t so many who want to use them.
We’re talking copper, zinc, and iron… The commodity bear market is now in its fifth year. Yet it seems like only yesterday that we were in a commodity supercycle. Years of under-investment, a failure to make significant new discoveries, and insatiable Asian demand for raw materials meant that the price of any metal would just ‘go up’. Precious metal, industrial metal, rare earth metal – the market was indiscriminate………………………………………..Full Article: Source

Let commodities lead the way

Posted on 09 July 2015 by VRS  |  Email |Print

There are two ways to diversify an economy: by responding to markets or by bureaucratic mandate. Smart governments will look to how the market is contributing to diversification in Canadian industry.
Canada’s C-suite leaders, unfortunately, favour the bureaucratic mandate route, seeking more investment in the clusters of Toronto and Waterloo to drive more technology jobs. As recent history with BlackBerry (formerly RIM) has shown us, and before that Nortel, our country’s high-tech track record, so favoured by the diversify-by-decree set, is spotty at best………………………………………..Full Article: Source

What happened to gold’s safe-haven status?

Posted on 09 July 2015 by VRS  |  Email |Print

Conspicuous by its absence in the commodity market turmoil of the last week has been the reaction in the gold price, say analysts who believe the metal has currently lost its safe-haven status. “One of the interesting developments despite the Greece crisis and China uncertainty has been the failure of any rally in gold prices. In fact, gold prices yesterday (July 7) flirted with their year lows,” said Goldman Sachs in a morning note to clients.
“This is an indication that even in a risk-off environment investors are not seeing gold as a safe-haven and rather prefer parking their money in US and German bonds and the US dollar,” the bank said………………………………………..Full Article: Source

Markets hedge gold bet on US Fed

Posted on 08 July 2015 by VRS  |  Email |Print

In 2011, when Europe was spiralling into crisis, gold soared, helped by the perception of US dollar “money printing” by the US Federal Reserve. Last weekend, Greek voters cleaved a serious schism in the eurozone facade, threatening the stability of the world’s second-biggest economic block. But instead of roaring higher, gold barely whimpered as it slipped to near five-year lows.
“The lack of influence that the euro crisis is having on gold is particularly noteworthy as the yellow metal continued its recent price decline, underlining again how gold’s main role in financial markets at present is as a proxy for the timing and likelihood of a Fed rate hike,” Barclays commodity strategists said………………………………………..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

Is Gold going to Crash?

Posted on 07 July 2015 by VRS  |  Email |Print

The price of gold – in terms of U.S. dollars – has certainly struggled since 2011. The price is currently under $1,200. Just when it shows signs of a promising run above $1,200, it falls back down. Mining stocks have been even worse. They have been beaten down quite a bit over the last several years. It seems that almost nobody wants to touch them at this point.
A recent article at Forbes discusses the weakness in gold and why it should crash another 40% or more, which would send the metal down to $700 per ounce. The author lists five reasons on why the gold price should fall further from its 2011 highs………………………………………..Full Article: Source

A not very golden crisis

Posted on 07 July 2015 by VRS  |  Email |Print

Here’s a puzzle. Neither the Chinese stock slide or the Greek ‘no’ vote are having much of an effect on the gold price — odd given that the goldbug narrative that gold always performs well in a crisis: In fact, looking at the 10-day performance, the trend is distinctly to the down side: What gives?
Barclays’ Suki Cooper has an interesting view (our emphasis): The failure of gold to appreciate given global macroeconomic uncertainty may seem puzzling initially but is explainable. Over the past few weeks, as the Greek crisis reached a climax, gold prices failed to appreciate in any meaningful way, continuing their downward trend since crossing $1,300/oz in late January………………………………………..Full Article: Source

Opportunity In Commodities In Response To Greek Referendum

Posted on 06 July 2015 by VRS  |  Email |Print

With the Greeks voting on Sunday on whether to accept creditor proposals and another bailout, the commodity markets are likely to fall either way. When the 2010 bailout was approved, commodities fell and gold rose. The same could happen this time if the Greeks vote Yes on accepting another bailout. If they vote No, Grexit becomes more likely, making the commodity decline more protracted.
A resolution to the situation in Greece - or lack thereof - has long been at the forefront of financial media reporting. So much so, that we are now seeing markets turning somewhat dissolute towards the outcome of the situation, and we have ended up with two distinct groups - one that stands firmly behind the idea that Greece is an individual unit and - as a result - the rest of the global economy is relatively insulated from any potential exit from the Eurozone………………………………………..Full Article: Source

‘New normal’ in Australia commodities – low prices and strong volumes

Posted on 03 July 2015 by VRS  |  Email |Print

The big picture is that Australia is receiving less money for its commodity exports, with the value dropping 11 per cent to A$174 billion (US$133.8 billion) in the 2014-15 fiscal year. “New normal” is a term coined about China’s transition to slower but hopefully more sustainable economic growth, but it can be equally applied to many commodity markets.
This reality was well illustrated by the Australian government’s latest set of forecasts for the country’s commodity exports, which highlighted we are now in an era of low prices but strong volumes. Australia’s official forecasts carry weight because the country is the world’s largest exporter of iron ore and metallurgical coal, and will become number one in liquefied natural gas (LNG) within the next few years………………………………………..Full Article: Source

Is Silver a Good Investment Today?

Posted on 03 July 2015 by VRS  |  Email |Print

With silver prices flat for the year, is silver a good investment to make right now? Silver has not performed nearly as well as its high-flying days of 2009-2011, when it quadrupled in price. But that doesn’t mean the metal doesn’t have value to your portfolio. Let’s delve into some relevant aspects of the silver market to determine whether now is a good time to invest in silver.
You can see the price bottoming around $15.25 in November, then after a spike to $19.25, dropping back to around $15.50 in March. We can also distinguish a rising trend channel that seems to be establishing itself (green lines). As for the 50-day moving average, it looks like it has stabilized, bouncing around the $16.50 level. Consider, though, that the 200-day moving average is still trending downward………………………………………..Full Article: Source

Greece default: Why isn’t gold budging?

Posted on 02 July 2015 by VRS  |  Email |Print

Gold’s stubborn non-reaction to Greece’s default on its crucial 1.5 billion euro repayment ($1.7 billion) to the International Monetary Fund (IMF) couldn’t be more disappointing to bullion bugs. The yellow metal reversed slight gains to trade around 0.3 percent lower at $1,169 on Wednesday, despite heightened uncertainty around the fate of the heavily-indebted nation.
So, why isn’t the yellow metal catching a safe-haven bid? Here’s what commodities analysts are chalking it up to, in their own words: First off, investors expect the Greek crisis will be contained. Victor Thianpiruiyam, commodity strategist at ANZ: “The market seems a little more confident with the situation now. There seem to be reassurances from euro zone officials that the contagion risk from Greece will be relatively small if any at all………………………………………..Full Article: Source

UBS Asks, ‘Is Gold Ignoring Greece?’

Posted on 02 July 2015 by VRS  |  Email |Print

UBS strategist Edel Tully wondered why gold seemed to be so disconnected from the Greek crisis. He noted that “developments in Greece don’t seem to be impacting gold in any meaningful way,” at least relative to “how the market has reacted in the past.”
Typically, gold receives a boost from financial uncertainty, as wary savers seek to transfer their wealth to a more secure commodity. But Tully said that this effect has been dampened in recent years. He attributed this trend to “headline fatigue” resulting from heavy coverage of the Greek drama. He said, “the threshold for bad news is higher and it will probably take a lot more to trigger a significant wave of gold safe haven buying.”……………………………………….Full Article: Source

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