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Commodities Briefing - Category | Commentaries more

Commodities are going lower—here’s my play: Trader

Posted on 02 April 2015 by VRS  |  Email |Print

A strong dollar sent global commodity prices plunging in the past year. And one currency trader is setting himself up to profit from further declines. “We expect the uptrend in the U.S. dollar to continue,” said TradingAnalysis.com founder Todd Gordon on Wednesday’s “Trading Nation.” The dollar has already surged more than 22 percent in the last 52 weeks.
So, in order to play for further upside in the greenback, and downside in commodities, Gordon looked to the land Down Under: Australia. Specifically Gordon targeted, the FXA, the Australian dollar ETF, which is down more than 17 percent in the past 12 months………………………………………..Full Article: Source

Time for commodities to outperform equities: Jodie Gunzberg

Posted on 01 April 2015 by VRS  |  Email |Print

21 of 24 commodities lost in FY15 with the flagship indices, S&P GSCI and Dow Jones Commodity Index (DJCI), losing 39.5 per cent and 25.9 per cent, respectively. In the past quarter, six commodities are positive: silver, cotton, gasoil, unleaded gasoline, gold, and feeder cattle. In the past month, one-third of commodities are in backwardation, measuring shortages that could be supportive for silver, copper, live cattle, feeder cattle, Kansas wheat, unleaded gasoline, heating oil and gasoil.
This highlights the positive impact of falling oil prices on the petroleum commodities that use crude oil as an input. Each commodity has its own supply and demand model so is impacted by different factors from weather to geopolitical risk. Rising interest rates, Chinese demand from stockpiling, and the possibility of rising oil prices may support commodities this year………………………………………..Full Article: Source

Silver’s outperformance versus gold to stay: Capital Economics

Posted on 31 March 2015 by VRS  |  Email |Print

According to senior analysts at Capital Economics, Silver has risen 8% in dollar terms year-to-date in 2015. During the same period, gold has appreciated only by 1%. This outperformance by silver is expected to continue in 2015 and 2016, noted Julian Jessop, Head of Commodities Research at the London-based economic research consultancy.
Gold had witnessed continuous upward journey for seven days in a row. However, the geopolitical tensions surrounding Saudi attack on Yemen, worries over Greece debt situation and the shaky US dollar had resulted in sharp rise in gold prices. However, the prices of the yellow metals settled under the $1,200 per Oz on account of strong profit booking. Overall, gold prices ended higher during the week……………………………………….Full Article: Source

Commodities: Come Together

Posted on 26 March 2015 by VRS  |  Email |Print

Cartels have been making a comeback—if in word rather than deed. On Wednesday, Australia’s competition regulator said it had called on Andrew Forrest, chairman of Fortescue Metals, to explain comments he made at a dinner reportedly saying iron-ore miners should cap production to support sagging prices. Fortescue says Mr. Forrest was merely highlighting the damage being done to shareholders, Australia, and consumers by the iron-ore industry’s “last-man-standing fight for market share.”
Consumers, at least, rarely suffer from low prices. Regardless, Mr. Forrest’s words reflect the desperation of a company and industry that, as usual in commodity cycles, invested enormously to boost supply in good times only to suffer as demand failed to match expectations. Fortescue last week pulled a $2.5 billion bond offering, the single biggest withdrawn deal since the financial crisis, according to S&P Capital IQ LCD………………………………………..Full Article: Source

SocGen’s ultra bearish gold and silver outlook

Posted on 26 March 2015 by VRS  |  Email |Print

Analysts at the French Bank Societe Generale (SocGen) in their latest research report have forecast that the gold price, having given away all its early year gains, was headed sharply lower, as it saw the dollar continue its gain in strength. They thus expected the bear market in gold to continue further and saw the price as falling to average only $925 an ounce between 2016 and 2019.
The timing of this report was perhaps unfortunate in that the forecast for a virtually immediate downturn in gold, together with dollar strength, predated the events of the past few days, which has seen the reverse occur. Gold bulls will be fervently hoping that the bank’s analysts are equally incorrect in their forecast of gold’s longer-term prospects………………………………………..Full Article: Source

Is This the Bottom for Commodities?

Posted on 25 March 2015 by VRS  |  Email |Print

All the overnight action was in the currency markets. The Fed’s decision to delay interest rates rises is having a major impact on the flow of global capital. The Aussie dollar had a massive session, finishing at 78.95 US cents.
As I explained last week, traders got caught out by the Fed’s ultra-mega dovishness. They had positioned for the start of US interest rate ‘normalisation’…then the Fed wavered. As a result, the US dollar is now in correction mode as these bets are unwound. The Aussie dollar, commodity currencies and commodities more generally are all beneficiaries of this current unwind. The question is, how long will it run?……………………………………….Full Article: Source

Is gold finally ready to rebound?

Posted on 19 March 2015 by VRS  |  Email |Print

Analyst Jim Bianco argues that gold may have already reached its bottom. There are few more polarizing topics in the world of investing than gold. The shiny metal, which for centuries was the basis of the global monetary system, is beloved particularly by investors whose political beliefs tilt libertarian.
These are the sort of people who are convinced of the incompetence of political leaders and central banks that now run a monetary system based on floating exchange rates rather than the value of hard metals. Gold enthusiasts had their moment in the sun during the 2000s, when the combination of rising deficits and a sharply falling dollar helped give the precious metal its best stretch since the inflation-racked 1970s and 1980s………………………………………..Full Article: Source

A simple test to see if gold is at a bottom

Posted on 18 March 2015 by VRS  |  Email |Print

What is the range you expect for gold in 2015? The 200-day moving average right now is $1,244/oz. If gold can break above that, I think it would gather strength and surprise people on the upside. Seeing as how so many people are betting the other direction, I think you’d have a lot of short covering. So $1,400/oz or $1,500/oz wouldn’t surprise me.
The magic number on silver is $18/oz. The 200-day average on the iShares Silver Trust (SLV), an exchange-traded fund, is roughly $17.29/oz. If silver closes above $18/oz, that will be a strong signal that it has changed its colors. For both gold and silver, the moving average keeps coming down, so it gets easier to surpass it………………………………………..Full Article: Source

Will Gold Follow Oil and Fall Back Under $1,000?

Posted on 18 March 2015 by VRS  |  Email |Print

The drop in the price of oil has been monumental, and the oil and gas sector is starting to prepare for some much leaner times ahead. The question to ask is what really lies ahead in the larger picture, outside of oil. With the dollar rallying and with economic numbers slowing, what are the odds that gold takes a dive like oil did? Also, how correlated should the two assets be today versus in the past?
Knowing an answer here may require a crystal ball. Still, investors and speculators should start to consider whether gold could or would take on the same sort of sentiment as oil………………………………………..Full Article: Source

One key reason why oil prices may have further to fall

Posted on 17 March 2015 by VRS  |  Email |Print

Crude prices may be in a holding pattern for the time being, but the conditions under which they appear to have stabilized are anything but reassuring. Despite a saturated world market, North American production, whether it’s bitumen from Alberta’s oil sands or light oil from North Dakota or Texas, continues to increase. So why haven’t prices, in the face of all this supply, continued to fall?
The answer is storage or, more precisely, the record amount of oil that’s being poured into U.S. storage tanks and salt caverns, despite inventory levels that are already at all-time highs. Putting oil into storage is attractive to oil companies right now for two reasons. First, it effectively takes excess oil out of an already glutted market, which alleviates downward pressure on spot prices………………………………………..Full Article: Source

Don’t rush to buy gold; yellow metal likely to weaken in coming months

Posted on 17 March 2015 by VRS  |  Email |Print

The yellow metal is on a slide. After hitting a high of $1,297 a troy ounce on 21 January 2015, international gold prices have fallen by 10% to $1,164 per troy ounce now. The price fall in the domestic gold market has been to the tune of 7% over the same period. So should you buy now or wait for Akshaya Tritiya, which is seen as an auspicious day to buy gold in India?
According to most experts we spoke to, you should wait. The bear market in gold has resumed and prices will not move up anytime soon. “With no fundamental factors supporting prices, international gold may fall more to breach the recent record low price of $1,143,” says Praveen Singh, Senior Commodities Analyst, Sharekhan………………………………………..Full Article: Source

Sugar - A Sweet Commodity; A Sour Market

Posted on 17 March 2015 by VRS  |  Email |Print

Historically, sugar is one of the most volatile commodities that trades on futures exchanges. However, volatility in the sweet commodity has fallen to historically low levels and has remained there since 2013. Sugar has been in a bear market since it made highs of more than 36 cents per pound in 2011.
Last week the sugar price continued to weaken. There are many reasons for a falling sugar price including a strong U.S. dollar, a global surplus of sugar and a bear market in raw material prices that started in 2011. However, now sugar has fallen to a critical level and the prospects do not appear to be too sweet………………………………………..Full Article: Source

Commodities Decline Near ‘Exhaustion’ as Hackett Says Buy Rice

Posted on 16 March 2015 by VRS  |  Email |Print

The commodities fall is near “exhaustion” with wheat, rice and coffee set to rebound, according to Shawn Hackett, president of Hackett Financial Advisors in Florida. The Bloomberg Commodity Index of 22 raw materials closed on Friday at the lowest level since August 2002, capping an almost 30 percent decline in the past year.
Wheat dropped 25 percent in the past 12 months and rice fell 30 percent. Arabica coffee slipped 37 percent as Brazil’s weak real currency encouraged exports, adding to supplies. “For speculators wheat and rice are the two markets that are the ones to buy given that both have the lowest supplies relative to global demand,” Hackett said in an e-mailed report on Saturday………………………………………..Full Article: Source

All That Glitters Is Not Gold Anymore

Posted on 16 March 2015 by VRS  |  Email |Print

The old saying that ‘All that glitters, is not gold’ is becoming a reality in the global economy. Gold rates nosedived again Friday, March 13 after losing out on the gains made during the early morning trading. This is the tenth consecutive day of trading when gold has recorded huge losses. It is also its longest loss making run in the past four decades. At the same time, the U.S. dollar has been appreciating.
Friday, spot gold prices climbed at the beginning of trading. However, it went spiralling down by 0.1 percent and closed at $1,152.26 per ounce of gold by the end of day. This is equivalent to the stretch of losses gold stocks recorded in the month of August 1973. Gold prices back then recorded a fall for ten consecutive days. The price of the U.S. gold for the month of April 2015 remained untouched and it was valued at $1,151.30 per ounce………………………………………..Full Article: Source

Gold And Silver - When Will Precious Metals Rally? Not In 2015

Posted on 16 March 2015 by VRS  |  Email |Print

If one addresses what is going on between China and the IMF, while keeping an eye on the Federal Reserve’s fiat debt instrument, incorrectly called the “dollar,” then the likelihood of a significant rally in gold and silver may not develop this year. Those believing the fiat “dollar” is on its currency deathbed and about to implode to its true intrinsic worth, zero, are not paying enough attention to realize that the elite’s are still in control while in the process of merely switching horses: to China from the US.
Call them any number of names but the elites are not stupid, and they are not about to change horses mid-stream, as it were. There are a few developments in the works that need to come to fruition before any significant “reset” in Precious Metals valuation upwards may occur………………………………………..Full Article: Source

Top forecaster tips gold slump to $US1100 this year

Posted on 13 March 2015 by VRS  |  Email |Print

Forget Mario Draghi and the Chinese aunties. The only thing that matters for gold is the Federal Reserve and that spells trouble for prices, according to the most-accurate bullion forecaster over the past two years.
With the Fed indicating it will raise US interest rates for the first time since 2006 as the world’s biggest economy recovers, bullion will post its third straight annual drop, said Artur Passos, who produces the metals outlook at Itau Unibanco Holding, Latin America’s biggest bank by market value. Passos, part of a research group led by former central banker Ilan Goldfajn, was the most-accurate among 20 forecasters, data compiled by Bloomberg Rankings show………………………………………..Full Article: Source

The Case Against Commodities

Posted on 12 March 2015 by VRS  |  Email |Print

Commodity prices can go up, and they can go down. But while volatility is an expected part of investing, the volatility associated with commodities in particular makes this asset class a poor investment for most investors. That’s true whether they’re held in physical form (gold coins) or through vehicles like exchange traded funds (ETFs).
Commodities are fundamentally different from investments like stocks and bonds. Stocks and bonds are financial assets, representing ownership or debt of businesses, respectively, whereas commodities are typically raw materials, such as oil, gold, copper, and corn………………………………………..Full Article: Source

Apple Watch wont save the gold price

Posted on 12 March 2015 by VRS  |  Email |Print

If we believe the hype, everything from fitness, time pieces, messaging and payments are about to be disrupted by the launch of the Apple Watch. One area many would have deemed safe from the device is the old fashioned gold business.
Yet gold bugs are alight with hopes that Apple will transform the gold business as well. Soon after Apple announced a launch date for the ultra exclusive Apple Watch Edition – the gold one – the internet flourished with speculation gold demand would rise as a result………………………………………..Full Article: Source

How to read the changing signals from China’s metals trade: Andy Home

Posted on 12 March 2015 by VRS  |  Email |Print

China will be the key determinant of industrial metal prices this year. Nothing new there then. The country has played the starring role in the sector for many years, thanks to its stellar contribution to global demand growth for everything from aluminium to zinc.
What has changed over the last couple of years, though, is the country’s own surging output of refined metals following years of production capacity growth. In the aluminium market, for instance, what China imports from the rest of the world is far less significant for prices than what it exports………………………………………..Full Article: Source

Silver marks record imports in 2014

Posted on 11 March 2015 by VRS  |  Email |Print

Silver usually keeps its sheen even when gold prices drop. However, in the past two years, silver prices have fallen sharply compared with the yellow metal. Traders have used this as an opportunity to stock up silver. In 2014, silver imports reached a record high of 6,842 tonnes, an 18 per cent increase over the previous year, according to GFMS Thomson Reuters data.
In value, however, the import bill fell, owing to the decline in silver prices. Silver imports in 2014 were worth $3.46 billion compared with $3.64 billion in the previous year. Silver prices fell 24 per cent in 2013 and another 15 per cent in 2014 in Mumbai………………………………………..Full Article: Source

Commodities Bulls Are Their Own Worst Enemy

Posted on 09 March 2015 by VRS  |  Email |Print

What is the biggest obstacle to a commodities rally? Saudi Arabia’s oil policy? China’s lower growth forecast? Try Wall Street. The big problem facing oil, natural gas, iron ore, coal and the like is that years of high prices prompted drillers and diggers to boost supply just in time for demand growth to cool off.
But drillers and diggers don’t like to stop what they do best just because prices have dropped. Better to let the other guy do that to rebalance the market. Keeping going, though, requires access to capital—and that is where Wall Street is the great enabler………………………………………..Full Article: Source

All eyes on India’s gold savings plan

Posted on 09 March 2015 by VRS  |  Email |Print

India’s gold market was quiet last week after experiencing a bout of volatility on the announcement of new gold schemes in the Union Budget. Market experts outside India believe that if the new scheme clicks with savers, it could erode demand for physical gold, given that India is among the top two markets for bullion in the world.
With Indian households estimated to own about 20,000 tonnes of gold, even if 5 per cent of it were to be unlocked by the new gold deposit scheme, it would reduce the country’s imports by 1,000 tonnes. For 2014, the country had imported 769 tonnes of gold. Gold prices closed at $1,167/ounce, down 3.8 per cent for the week due to a stronger dollar. The US dollar index moved up to 97.6 from 95.29 in the previous week. This week, the US economic calendar is light with just jobless claims and retail sales numbers due on Thursday………………………………………..Full Article: Source

Gold Goes Back to Boring With Volatility at 4-Month Low

Posted on 06 March 2015 by VRS  |  Email |Print

Gold is once again leaving investors bored. The metal’s 30-day historical volatility dropped to the lowest since early November on Thursday, according to data compiled by Bloomberg. Even Mario Draghi’s plan for more bond buying that sent the euro to an 11-year low against the dollar wasn’t enough to spur some movement for gold, with futures trading little changed for most of the day in New York.
Prices are up 1 percent in 2015, paring gains of as much as 10 percent through mid-January. Gold fell 1.5 percent in 2014, and in the past year the metal is the least-volatile of the 22 components tracked by the Bloomberg Commodity Index. The U.S. Labor Department will release jobs data on March 6 that may show more improvement for the economy, allowing the Federal Reserve to raise interest rates sooner………………………………………..Full Article: Source

Timid silver does not mean bad economic news

Posted on 05 March 2015 by VRS  |  Email |Print

Gold’s relationship with silver and the stock market seems to have changed. The mint ratio is the gold price divided by the silver price. Assuming supply stays reasonably stable, the mint in recent times has tended to rise when equities fall.
When the S&P 500 hit its post-dotcom bubble low in 2003, the mint breached 80. Just before Wall Street’s credit crunch trough in early 2009, the mint brushed 90. The inverse correlation is explained by investors lowering the price of silver relative to gold as the tougher economic times hurting stocks are seen reducing demand for the grey metal. Gold has hardly any industrial uses………………………………………..Full Article: Source

Gold & Silver Investing Strong, Sellers Vanish

Posted on 04 March 2015 by VRS  |  Email |Print

Gold investing sentiment jumped in February, writes Adrian Ash at BullionVault, surging from a half-decade low to the strongest level since Spring 2013. That’s according to our new Gold Investor Index today. It tracks the number of buyers vs. sellers on BullionVault, the low-cost gold and silver market online. Used by 55,000 people worldwide, it saw $1.2 billion of metal (£740m, €920m) exchanged in 2014.
And last month, BullionVault’s Gold Investor Index jumped from 50.5 to read 54.5 as the number of people starting or adding to their gold holdings rose, but the number of sellers sank by two-thirds. A reading of 50.0 would signal a perfect balance of net buyers and net sellers across the month. The Gold Investor Index peaked at 71.7 in September 2011……………………………………….Full Article: Source

China, Commodities Bust To Force RBA’s Hand

Posted on 03 March 2015 by VRS  |  Email |Print

It would be fair to say when China sneezes, Australia catches a cold. The Reserve Bank of Australia knows this all too well and is why it is likely to pull the trigger on another 25 basis point cut in interest rates to stave off pneumonia.
The pullback in China’s growth to its slowest pace since 1990 was worrying enough for the People’s Bank of China to cut interest rates for a second time in three months on Saturday, and some economists are arguing that RBA Governor Glenn Stevens will follow suit with a second successive rate cut when he convenes the monthly meeting of the central bank’s board in Melbourne on Tuesday………………………………………..Full Article: Source

Will 2015 Be Gold’s Year?

Posted on 03 March 2015 by VRS  |  Email |Print

A volatile beginning to 2015 is helping gold to regain some of its mojo. The U.S. stock market got off to a shaky start in January, and instability in currency markets initially lifted the price of gold bullion. The SPDR Gold Shares (GLD) is already up around 7% year-to-date. Likewise, ETFs that leverage exposure to gold and related assets like the ProShares Ultra Gold ETF (UGL) and the Direxion Daily Gold Miners Bull 3x Shares (NUGT) have soared 14.6% and 72% respectively.
A swift decline in the euro and the recent move by the Swiss National Bank to end the cap on the franc are reminders that currency values can change dramatically. Will Denmark be forced off its krone peg to the euro as well? Amid recent currency ups and downs, gold looms as an alternative………………………………………..Full Article: Source

Copper: A Rebound - Don’t Get Too Bullish

Posted on 03 March 2015 by VRS  |  Email |Print

I have been writing a lot about copper lately because I think it is one of the most important commodity prices to monitor. Copper is a building block staple - growing economies require copper to build infrastructure. When it comes to economic growth, copper is a barometer. Doctor copper is a misnomer - copper is really the patient.
It does not provide a diagnosis of global economic condition; rather it reacts to the strength or weakness of the landscape. Therefore, copper is a symptom and symptoms occur not in the doctor but in the patient. Since copper traded to all-time highs of $4.6495 per pound in February 2011, the price of the red metal has made lower highs and lower lows. In January 2015, it broke below the $2.72 level, which was the June 2010 lows and key support………………………………………..Full Article: Source

Explaining the global oil-price drop

Posted on 02 March 2015 by VRS  |  Email |Print

The Middle East is burning. Jets fighter from Saudi Arabia, Jordan, the United Arab Emirates (UAE) and Egypt have attacked numerous Islamic State (IS) movement targets in Syria, Iraq and Libya, mainly in response to the sadistic killing of a captured Jordanian pilot, Moaz al-Kasasbeh.
In this hostile conflict, begun in June 2014, oil prices have dropped significantly, from the highest level of more than US$100/barrel in 2010 to approximately $50 this year. Yet Saudi Arabia, the biggest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) did not do anything to cut oil supply, to stabilize prices………………………………………..Full Article: Source

What To Make Of Gold Prices In 2015

Posted on 27 February 2015 by VRS  |  Email |Print

For much of the past decade, gold has been viewed as one of the most stable and predictable investments in existence. The price of gold was rising slowly but steadily, and crises in world politics and financial markets continually proved that the precious metal had value as a protective hedge.
And yet, in mid-2012, this popular outlook began to change as gold prices became more volatile than most modern investors are used to seeing. Take a look at the 10-year gold pricing chart at online precious metal market BullionVault.com, and you’ll see the trend as clear as day. While gold today remains at a significantly inflated per ounce price than what we saw a decade ago, the steady rise that investors got used to between 2005 and 2012 is no more………………………………………..Full Article: Source

Is there a Logical Oil Price?

Posted on 25 February 2015 by VRS  |  Email |Print

If you have been following the price of oil over the last few months, the chances are you are a little confused. On the one hand, you have the likes of A. Gary Shilling who, in this Bloomberg article, loudly trumpets the prospect of oil at $10/Barrel, and on the other, there is T. Boone Pickens, who, at the end of last year was predicting a return to $100 within 12-18 months.
Pickens prediction has moderated somewhat as WTI and Brent crude have continued to fall, but in January he was still saying that oil would return to $70 or $80/barrel in the near future. So, who is correct? ……………………………………….Full Article: Source

Comodities ‘super-cycle’ stalls without wheels

Posted on 23 February 2015 by VRS  |  Email |Print

We may have been deluding ourselves with regard to the recent commodity super-cycle — the apogee of which, by the way, has probably been over for as long as seven years. It may not been so super after all. Charts produced during the week by London-based Capital Economics reveals a pattern of commodity moves that should confound any view that these items have retained good value over the long term.
For one thing, the price surge that reached its most exciting level just before the GFC struck in 2008, was not the greatest in real terms. Adjusted for inflation, the highest peak for commodities was caused by World War I, followed by the oil shock of the 1970s (and sustained by the gold burst in 1980)………………………………………..Full Article: Source

Why Gold Is Looking Lustrous Once Again

Posted on 23 February 2015 by VRS  |  Email |Print

Since peaking above $1,900 an ounce in September 2011, gold prices have declined by nearly 40%, settling at around $1,200 an ounce on Friday. I became bearish on gold in January 2013 and discussed why this January 25, 2013 global macroeconomic commentary, citing: 1) the passing dangers of a euro zone breakup (after Spain, Portugal and Greece were bailed out by their richer peers), 2) the recovering U.S. economy, and 3) that gold was highly vulnerable to a major decline after a 12-year bull market.
I slapped a 12- to 18-month price target of $1,100-$1,300 an ounce—when gold traded at $1,660 an ounce. It now appears that the decline in gold prices is nearly over, and that there will be a great long-term buying opportunity in gold this year………………………………………..Full Article: Source

We like the fundamentals for gold

Posted on 23 February 2015 by VRS  |  Email |Print

Medium to long term, we like the fundamentals for gold. On the supply side, although mine production was up for the sixth consecutive year due to mines that were developed over the last decade, we do not believe there is a large enough pipeline of new projects to satisfy future demand.
This is due to a cost structure that is approaching (or even exceeding) the current spot price. On the demand side, we see continued strength in Asia and throughout the emerging markets, central banks and the investment sector as price goes up — hence a real “push/pull” phenomenon in the years ahead………………………………………..Full Article: Source

Commodity Super Cycle Reinforcing Strength: Currie (Video)

Posted on 20 February 2015 by VRS  |  Email |Print

Jeffrey Currie, global head of commodities research at Goldman Sachs, and William Rudin, chief executive officer & vice chairman at Rudin Management, discuss the cycle of commodity prices and the expanding cost of luxury Manhattan real estate. They speak on “Bloomberg Surveillance.”.………………………………………Full Article: Source

Gold – Forming a base as selling abates

Posted on 20 February 2015 by VRS  |  Email |Print

Gold remained under pressure in the final quarter of 2014 on dollar strength and growing demand for higher-yielding risk assets. Technical selling was also a feature after gold breached double bottom chart support around $1,180. The price weakness stimulated physical demand as gold entered its seasonal peak demand period.
Demand is expected to remain strong early this year while Chinese demand is boosted by New Year-related purchases. Further asset diversification among emerging market central banks has also been evident, absorbing continued liquidation from western institutional investors, also a trend we expect to continue in 2015………………………………………..Full Article: Source

The Streets of China Commodity City

Posted on 19 February 2015 by VRS  |  Email |Print

Yiwu International Trade City, also known as China Commodity City, claims to be the world’s largest wholesale market for small commodities. It is located in a vast warehouse in the province of Zhejiang, where tens of thousands of stalls sell everything from artificial flowers to inflatable pools.
In 2014, the photographer Richard John Seymour captured the “streets” of China Commodity City as part of a project with the design studio Unknown Fields Division. Seymour told me that, despite the disorienting aspects of the market, the familiarity of certain items on sale there—a kitchen sponge, a Christmas decoration—served as a reminder that he “had an intimate connection with this place on the other side of the globe.”……………………………………….Full Article: Source

The price of oil is not a reflection of demand and supply

Posted on 19 February 2015 by VRS  |  Email |Print

“People today are worried about the plunging price of oil, which however is not a reflection of demand and supply alone”, says Dr. R. Seetharaman, Group CEO, Doha Bank. In the last six months, we have seen oil prices come down by 50 per cent – this does not mean that supply has increased by 50 per cent, or that demand has reduced by 50 per cent.
Yes, there indeed is excess supply, but what really has changed is the currency. The Dollar Index, for instance, has moved from 79 to above 94, and has also contributed to fall in prices in the commodity market. When the Dollar is weak, people hedge their risks by buying commodity futures, and when the Dollar is strong they unwind their positions………………………………………..Full Article: Source

Australia’s tycoons suffer commodities hangover

Posted on 18 February 2015 by VRS  |  Email |Print

The commodities slump has dented economies, capital expenditure and profits. Now it is scything the wealth of some of Australia’s most colourful tycoons. Andrew “Twiggy” Forrest, the founder and chairman of Fortescue, has seen the value of his one-third shareholding in the iron ore miner fall to A$2.65bn, down from A$6.2bn a year earlier.
The latest Forbes rich list, which was published last month, ranks Mr Forrest as the 10th richest Australian, down from fifth last year. Gina Rinehart remains Australia’s richest, although her wealth fell to US$11.7bn, down US$6bn on the previous year………………………………………..Full Article: Source

Will commodities be able to sustain their rally?

Posted on 16 February 2015 by VRS  |  Email |Print

The WTI was $52.78/barrel and Brent was $61.52/barrel by the end of last week. It had surged recently due to fall in the number of oil drilling rigs in the US to its lowest since August 2011. The number of rigs drilling for oil in the US fell by 84 last week to 1,056, a clear sign of the pressure that tumbling crude prices have put on oil producers.
Oil prices have rebounded since late January, partly due to expectations the lower rig count will eventually shrink US production, curtailing the supply glut. Oil price also arose on account of eurozone growth of 0.3% in last quarter of 2014. The eurozone’s biggest economy, Germany, was a clear outperformer, growing by 0.7% in the quarter. The positive job data from US economy also contributed to surge in oil prices………………………………………..Full Article: Source

Silver - The Best Precious Metal Investment For 2015

Posted on 16 February 2015 by VRS  |  Email |Print

Silver, a tangible asset, which is recognized as a store of value, its price can be affected by inflation, values of paper currency and fluctuations in interest rates and deficits. Silver investors insist on staying exposed to the metal despite its price weakness in 2014. Total physical demand for silver stood at a record 1,081 million ounces (Moz) last year.
If gold is poised to hit the $1,400 to $1,500 range in 2015, the biggest question for investors is whether a silver rebound will follow. Other precious metals like Silver and Platinum have generally followed the gold price. Silver is currently trading near all time low levels and has toyed with a rebound for months………………………………………..Full Article: Source

Commodities are down-but hardly out

Posted on 13 February 2015 by VRS  |  Email |Print

Do commodities still have a place in the average investor’s portfolio? The 2007-09 recession caused everyone to re-evaluate their tolerance for risk, and nowhere was this felt more strongly than in the commodities arena, where anything from a coffee-eating pest to severe drought could cost an investor hundreds of thousands of dollars.
Several years of negative returns for most commodities haven’t endeared the asset class to investors: For the three years through January, the S&P GSCI Commodity Index posted a negative return of 40 per cent. That came after a 52 per cent decline between June 2008 and June 2011………………………………………..Full Article: Source

Why Oil Prices Will Rebound Before We Know It

Posted on 12 February 2015 by VRS  |  Email |Print

Oil industry analysts have been engaging in a burning debate: Have prices hit bottom or do they have further to fall? Energy company CEOs have been voicing their views on the question as they report their quarterly earnings results. The International Energy Agency weighed in as well in a somewhat bearish five-year forecast released Tuesday, saying that oil prices will eventually rebound from current levels but still stay below the $100 a barrel mark.
The group said global stockpiles would rise, putting prices under more pressure before spending cuts by oil producers kick in to ease the supply glut. Here’s a safe call: Get ready for plenty of thrills, chills and volatility along the way. Let’s take a look at five key lessons from energy company conference calls so far this earnings season, and at several stocks that will benefit from the next chapter that’s about to play out in the ongoing saga of oil price volatility………………………………………..Full Article: Source

Top oil analyst: The worst is yet to come

Posted on 12 February 2015 by VRS  |  Email |Print

Oil prices will get a heck of a lot worse before they get better, a top industry analyst said on Tuesday. Tom Kloza, chief oil analyst at Oil Price Information Service, predicted that oil prices would bottom during the second quarter of the year “simultaneously to one of the expirations of the WTI contracts.”
He warned that the price of West Texas Intermediate crude could be in the $30s at some point in the second quarter. “I think the cycle has a long way to run out,” Kloza said on CNBC’s “Fast Money,” adding that the spread between Brent and WTI could widen to about $10 or so………………………………………..Full Article: Source

OPEC prediction of $200 a-barrel-oil ignores market realities — or maybe not

Posted on 12 February 2015 by VRS  |  Email |Print

OPEC’s Secretary General Abdulla al-Badri announced that the oil price may have bottomed out and predicted “you will see more than $200 when it comes to future oil prices.” In the current reduced-oil-price environment, we see oil companies cut back on budgets, curtail exploration, and pull in rigs — in many places it costs more to get the oil out of the ground than the present sales price.
In today’s market for crude oil, a reduction in the number of drilling rigs in the United States does not mean overall production declines. It means less production in the future. Tim Snyder, an energy economist with Lubbock, Texas-based Pro Petroleum Inc., who analyzes trends to help his company and others make educated decisions and manage risk, told me: “We anticipate a decrease in ‘new’ production in the U.S. as exploration and production companies reallocate capital expenditures and reduce drilling exposure.”……………………………………….Full Article: Source

Silver and Gold Truth Versus Fiat Lies

Posted on 11 February 2015 by VRS  |  Email |Print

What do loss of confidence, loss of faith in financial systems, and pervasive lies have to do with gold and silver? The answer begins with: Gold is far more truthful money – central banks can’t print it or create it from “thin air.” Dollars, euros, yen and others are fiat currency units based on confidence and debt (not assets) and are supported by government mandates that these pieces of colored paper and computerized digits shall be accepted as money.
But confidence in debt based currencies promoted by insolvent governments is clearly waning. The Russians and Chinese understand – they are converting dollars, yuan, and rubles into gold. Europe, Japan and the U.S. are “printing” more euros, yen, and dollars hoping that “extend and pretend” will give the politicians more years in office, another war or two, and more profits for the military contractors and bankers………………………………………..Full Article: Source

Gold rebounds amid demand for haven assets

Posted on 10 February 2015 by VRS  |  Email |Print

Gold rebounded as Greek Prime Minister Alexis Tsipras reaffirmed his government’s rejection of the country’s bailout programme and concern increased that Ukraine’s conflict may worsen, spurring demand for haven assets.
Bullion for immediate delivery added as much as 0.4 percent to $1,239.31 an ounce and was at $1,238.34 at 2.11pm in Singapore, according to Bloomberg generic pricing. Prices fell to $1,228.48 on February 6, the lowest level since January 15, after data showed the US added more jobs than forecast in January, boosting expectations that the Federal Reserve will move toward the first interest-rate increase since 2006………………………………………..Full Article: Source

What price gold in an increasingly unreliable world?

Posted on 09 February 2015 by VRS  |  Email |Print

You may have noticed that whenever the gold price picks up steam, some in the international media spring into condemnation. The fact that a shiny metal should be favoured over paper money (though equally redundant in its purely physical aspect) sparks their concern.
The reason is that they specifically want savers to lose out relative to spenders, in the quest for economic momentum. The use of gold, then, is a snag in that stratagem. Gold is quiet right now, but its relative slumber may not last if the latest round of deflationary global numbers leads to further desperate official measures worldwide………………………………………..Full Article: Source

The impact of falling commodity prices on the global economy (Video)

Posted on 06 February 2015 by VRS  |  Email |Print

The falling commodity prices have had significant impact on the global economy both at a macro and microl level, in this respect there has been concern that the oil and gas industry has developed faster than legislation. KPMG has put out a report that calls for continued reforms in the oil and gas sector despite a slowdown in exploration project. Mark Essex the director for international advisory services at KPMG joins CNBC Africa for more.……………………………………….Full Article: Source

Oil heading for $30, currency war coming: Analysts

Posted on 06 February 2015 by VRS  |  Email |Print

So much for the rally. Oil will likely still head as low as $30, analyst John Kilduff told CNBC on Thursday. “I still believe we’re going to go to that $30 to $33 area, which is the low point from the financial crisis in 2008, 2009. What you saw over the past several days was technical in nature, a short squeeze. This volatility is a little crazy and I think that $30 target is a downside target is for technicians that are in this market,” the founding partner of Again Capital said.
U.S. crude tumbled 9 percent on Wednesday to settle at $48.45, erasing nearly all of its gains in the previous two sessions. The benchmark commodity—West Texas Intermediate—had soared 22 percent from a nearly six-year low of $43.58 last Thursday, ending the day at $53.05 on Tuesday………………………………………..Full Article: Source

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