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Zimbabwe: Introduce gold-backed currency, says U.S. investor

Posted on 05 April 2016 by VRS  |  Email |Print

American investors have advised Zimbabwe to take advantage of its mineral resources and introduce a gold-backed currency, which could help attract international capital. On 1 April, an investment consultant from the US advised monetary authorities in Harare to consider the gold reserve bank and gold currency path. The gold bank and currency could be linked to a gold debit card and finance it through economic citizenship.
Chairman of Casey Research, Doug Casey said the gold reserve bank could become an international gold bank attracting deposits worldwide. The bank, he said, would then convert the amounts deposited into gold using prevailing market rates………………………………………..Full Article: Source

Gold Lovers Bet Party Isn’t Over After Big First-Quarter Gain

Posted on 04 April 2016 by VRS  |  Email |Print

Even after a lackluster March, money managers are betting the best-performing commodity last quarter still has further to run. While gold futures have dipped from a 13-month high, hedge funds are the most bullish since January 2015.
The precious metal posted its biggest quarterly advance in three decades as turbulent financial markets and ebbing global economic growth boosted demand for it as a haven. Federal Reserve Chair Janet Yellen said last week that U.S. central bankers should “proceed cautiously” on plans to raise interest rates because of risks from the global economy. London-based research firm Metals Focus Ltd………………………………………..Full Article: Source

Splitting the Difference in Gold Analysis

Posted on 01 April 2016 by VRS  |  Email |Print

No one can agree on what just happened in gold, let alone what comes next in 2016, writes Adrian Ash at BullionVault. “Gold heads for best quarterly rally in 25 years,” says data and news provider Bloomberg. Not so, say competitors Thomson Reuters. “Gold poised for best quarter in nearly 30 years.”
What’s 5 years between arch-rivals? The two news-wires’ headline writers can’t agree on the key driver of gold’s sharp Q1 rebound either. Bloomberg says “safe haven demand”; Reuters says “dovish Fed” comments on future rate rises………………………………………..Full Article: Source

Is gold headed for a correction? Top consultancies offer up mixed price outlooks for 2016

Posted on 01 April 2016 by VRS  |  Email |Print

The world’s top two gold consultancies have offered up mixed outlooks for prices in 2016. Metals Focus and Thomson Reuters GFMS each launched their 2016 gold reports on Thursday. Both firms are cautious on gold in the short term, as they see prices pulling back in the second quarter after rising a whopping 16 per cent in the first quarter.
But Metals Focus thinks the second half of 2016 will be very strong, while GFMS is optimistic but more guarded. Metals Focus predicted gold will peak at US$1,350 an ounce in the fourth quarter, up from US$1,235 currently………………………………………..Full Article: Source

Why Commodities Are The Trade Of The Year

Posted on 29 March 2016 by VRS  |  Email |Print

We talked last week about the weakness in the Chinese economy, which has been compounded by the weak-yen policies in Japan (which threatens China’s king-of-exports throne). And we know, based on history, Chinese policymakers won’t sit back and let weak global demand and a currency war from Japan undo the path of their economy.
They’ve already reversed course on their currency policy of the past decade, as they’ve begun taking back some of the appreciation of the yuan of the past 10 years. And they’ve already responded with more rate cuts and bank stimulus. But with growth running at recession-like levels in China (even at 6%), expect them to do more, maybe a lot more………………………………………..Full Article: Source

Is the Dollar Gold Price controlled by JPM in Cooperation with the BIS?

Posted on 29 March 2016 by VRS  |  Email |Print

In this paper we conclude that JP Morgan [JPM] in cooperation with the Bank of International Settlements [BIS] controls the dollar gold price by using their very dominant position in gold derivatives in the US Banking System.
JPM held during 1999 – 2014 an average of 3.262 paper metric tons gold (derivatives) available for interventions on the development of the dollar gold price with the BIS as counterparty. Furthermore we conclude that the paper volume sets the dollar gold price and that there is almost no influence on the dollar gold price from the physical supply and demand………………………………………..Full Article: Source

Relying on commodities ‘untenable’

Posted on 24 March 2016 by VRS  |  Email |Print

Dow Chemicals boss Andrew Liveris has lauded Malcolm Turnbull’s innovation agenda and warned Australian politicians that they can no longer afford to stake the country’s future on the increasingly volatile commodities market.
Liveris gave a no-holds barred assessment of the challenges facing Australia. “The commodities cycle is unkind,” the Darwin-born chairman and chief executive of Dow said. “Relying too much on commodity exports has always been risky………………………………………..Full Article: Source

Has Oil Prices Bottomed Out?

Posted on 24 March 2016 by VRS  |  Email |Print

Oil prices have been on a downward spiral for roughly 20 months now because of an oversupplied market that is made even worse by a soft demand for oil globally. But exactly how low can oil prices go? If you’re a trader, it’s imperative that you know if prices are reaching their lowest point or have bottomed out, because in a competitive market like oil trading, recognizing trends before they actually occur can spell the difference between profits and losses.
If you wait for analysts or industry groups to crunch numbers and churn out reports that confirm that prices have reach their troughs, chances are, it will be too late and you would have missed your window of opportunity to buy low and sell high………………………………………..Full Article: Source

Why Goldman is wrong about gold

Posted on 23 March 2016 by VRS  |  Email |Print

Goldman Sachs has been predicting the demise of gold for the past few years. Last summer, the firm predicted gold would fall to $1,000 by the start of 2016. The firm reiterated that call in its latest commodities report (March 7), saying it thought gold would fall to that key level within 12 months.
The rationale is that gold is primarily a “safe haven” asset in times of economic and market turmoil and that the U.S. faced very little recession risk — so there is no reason for investors to seek the shelter of gold………………………………………..Full Article: Source

Why You Should Still Hold on to Gold - Market Expert

Posted on 22 March 2016 by VRS  |  Email |Print

Despite the pullback in gold prices, one market veteran says it is still not time to cash in your gold bets just yet. Gold prices fell below the key psychological level of $1,250 an ounce on Monday as the metal saw more profit taking pressure.
The move comes after recent gains pushed prices to a 13-month high less than two weeks ago. April Comex gold settled $10.01 lower on the day at $1,244.20 an ounce. Despite consolidation in the gold market, Boris Schlossberg, managing director of FX strategy for BK Asset Management, says he is still a ‘big gold bull’ this year………………………………………..Full Article: Source

US dollar, not China, drives commodity falls

Posted on 22 March 2016 by VRS  |  Email |Print

The collapse in global commodity prices last year was primarily driven by a surging US dollar, not an economic slowdown in China, a study by the Federal Reserve Bank of New York has concluded.
The surprise finding challenges the conventional view that China’s tempering demand for commodities such as oil, industrial metals and some agricultural products, drove the swoon in commodity prices. A regression analysis over the past 25 years by New York Fed economists shows that a 1 per cent increase in the US dollar index corresponds to a 0.9 per cent drop in the commodity price index………………………………………..Full Article: Source

China and the Future of Commodity Prices

Posted on 21 March 2016 by VRS  |  Email |Print

There is no doubt that China’s ongoing growth slowdown has had far-reaching effects on the global economy. But its role in the sharp fall in commodity prices that has occurred since 2014 – an outcome that has been devastating for commodity-exporting countries, including once-dynamic emerging economies – is more limited than the conventional wisdom suggests. In fact, China’s slowdown is only a part of the commodity-price story.
To be sure, there is a clear correlation between Chinese GDP growth and commodity prices. In the early 2000s, when Chinese growth accelerated, commodity prices rose sharply; since China’s slowdown began in 2011, energy prices have fallen by 70%, metals prices by 50%, and agricultural commodity prices by 35%………………………………………..Full Article: Source

Dilemma for gold investors after recent price rise

Posted on 21 March 2016 by VRS  |  Email |Print

We’ll defer to The Clash to sum up the dilemma facing investors in local gold stocks after the sector’s recent virile surge: should I stay or should I go now? Stay? There will be trouble if global economic growth improves and monetary authorities start to ratchet up interest rates, which is guaranteed to kill the mood for gold.
Even some of the most ardent gold bulls concede the sector’s valuation looks toppish. Go? Investors miss out on the spoils of a sector that is enjoying unprecedented profit margins, courtesy of the depreciated Aussie dollar and tumbling costs………………………………………..Full Article: Source

Commodities gains ‘can no longer be ignored’

Posted on 18 March 2016 by VRS  |  Email |Print

Natural resources equities and physical commodities have produced “significant returns” over recent months, with structural shifts in the economy set to further benefit the asset class, says Pengana Capital.
In a market update, Pengana Capital said physical commodities and resources stocks have produced “strong gains” since the lows of end-2015. According to Pengana, iron ore is up +54 per cent, oil has rallied +33 per cent and gold prices have risen +18 per cent………………………………………..Full Article: Source

Commodity and currency slump expose frailties of African economies

Posted on 16 March 2016 by VRS  |  Email |Print

Slumping commodity prices have taken African currencies down with them, exposing the fundamental economic frailties of the world’s poorest continent by driving up inflation in countries that import most of their manufactured goods.
Regional economies are in no position to use their weakening currencies to their trade advantage because they have few exports beyond their natural resources. The hardship for households has been compounded by rising prices for food - one commodity that has defied the price fall due to drought in southern Africa……………………………………….Full Article: Source

UBS: Consolidation Would Be ‘Healthy’ For Gold, Provide ‘More Attractive’ Prices

Posted on 16 March 2016 by VRS  |  Email |Print

Gold is consolidating some of its sharp gains for the year and any further weakness after this week’s U.S. Federal Open Market Committee meeting would provide investors a chance to buy metal at “more attractive levels,” says UBS.
“The market has had a good run so far this year and some more consolidation would be healthy at this juncture, especially given the rebound in equities and recent positive surprises in U.S. employment and inflation data,” UBS says. “The pullbacks in gold this year have generally been relatively shallow and short-lived, not really providing investors with many chances to get in at better levels………………………………………..Full Article: Source

So, oil’s price swoon is over? Don’t believe it

Posted on 15 March 2016 by VRS  |  Email |Print

The long-battered price of oil has edged up lately, buoying the stock market. So, oil’s long descent is over and things are returning to normal, right? Not quite. Pell-mell production and record inventories are likely to keep oil prices low. They were just above $38 per barrel at Friday’s close, down almost two-thirds from the recent peak in mid-2014.
Lately, though, optimism has filled the air amid talk that Russia, Saudi Arabia and three other big overseas producers will curtail their rampant output. In past months, U.S. shale production has fallen in response to the low prices. The International Energy Agency said last week that it sees “a light at the end of what has been a long, dark tunnel” for oil………………………………………..Full Article: Source

Exchange traded product commodity investing pitfalls

Posted on 15 March 2016 by VRS  |  Email |Print

Arecent email I received promoted a WTI crude oil three times leverage daily exchange traded product. While I question the need to leverage your risk three times, I do think commodities are beginning to look interesting.
The Bloomberg commodity index peaked in June 2008 and having shed two-thirds of its value, is currently near levels not seen since 1999. Arguably, however, some markets are moving from oversupply into equilibrium and the demand picture is not actually too bad, notwithstanding China’s retrenchment………………………………………..Full Article: Source

China commodities output weak in first two months of 2016

Posted on 14 March 2016 by VRS  |  Email |Print

China’s output of key industrial commodities including coal and steel continued to shrink in the first two months of the year amid chronic oversupply, while crude oil production slipped as a global price slump took its toll.
Economic activity data also remained weak in January and -February, with factory output growth hitting the lowest since the global financial crisis, keeping pressure on policymakers to do more to avert a sharper showdown in the world’s second-largest economy………………………………………..Full Article: Source

Gold Believers Scoff at Goldman Warning as Wagers on Rally Rise

Posted on 14 March 2016 by VRS  |  Email |Print

There seems to be almost nothing that will deter this year’s newfound gold enthusiasm. Even with a turnaround in global equities and signs of a more robust U.S. economy, investors are still piling into the metal.
Money managers are holding the biggest net-wager on a rally in more than a year, and holdings in bullion-backed funds have climbed for 10 straight weeks, the longest streak since 2012. All this comes as Goldman Sachs Group Inc., the bank that foresaw gold’s collapse in 2013, continues to stick by its prediction that prices will start to retreat………………………………………..Full Article: Source

Commodities rally unsustainable: Goldman’s Currie

Posted on 11 March 2016 by VRS  |  Email |Print

The commodities market has set itself up for a self-defeating rally, Jeff Currie, global head of commodities research at Goldman Sachs, said, as U.S. crude closed down 1 percent. Currie said that market views have driven a premature surge in commodity prices that is unsustainable.
“I think there were three forces at play … reflation, realignment and relevering,” he said. Currie says that the expectation of the oil market rebalancing sparked a big rally recently, but those were mere presumptions. He added that as people adopted the idea of central bank policy realignment, the dollar became weaker and commodity prices rose………………………………………..Full Article: Source

Don’t believe the recession hype – or this commodities boom

Posted on 11 March 2016 by VRS  |  Email |Print

All in all, this is an odd moment for an outburst of high spirits: not from me — I’m as phlegmatic as ever — but from commodity investors. The price of a barrel of oil has rallied from $27 to $40 after talks between Saudi Arabia and Russia about restricting supply; one pundit called that ‘meaningless theatre’ but others expect a climb back to $50.
In a similar mood, copper prices have risen by almost a fifth — reflecting producer cutbacks combined with a belief that the Chinese downturn in demand might not be so severe as was first feared. Likewise iron ore, which surged so fast at the beginning of this week that one analyst called it ‘berserk’, while the biggest player in global steel, the Indian tycoon Lakshmi Mittal, declared that ‘things should continue to improve’………………………………………..Full Article: Source

This Could Ignite a Super Spike in Gold Prices

Posted on 11 March 2016 by VRS  |  Email |Print

Negative interest rates have become a popular way for central banks to kick-start the economy—a decision that could have big implications for the gold price. Outside the hallowed halls of global central banks, few people think they’re a good idea. That’s because there’s little evidence to suggest negative interest rates actually help spur economic growth.
The best way to combat abysmal economic growth and the widespread adoption of negative interest rates is with precious metals like gold. They may not pay a dividend, but precious metals a much better alternative to sitting on cash or parking it in the bank………………………………………..Full Article: Source

Commodities looking for equilibrium

Posted on 10 March 2016 by VRS  |  Email |Print

A sentiment-driven commodities rally is in a base-forming stage and “looking for some sort of equilibrium price”. While prices can go lower from here in the short term, due to producers hedging in futures or profit taking, revising of the previous lows seen a few months earlier might be a distant thing, analysts believe.
On Tuesday, international metals prices, along with share prices of these companies, saw a big fall; these stabilised on Wednesday. Brent crude oil is back to $40 a barrel and copper stabilised at $4,880 a tonne. Nickel fell sharply on Tuesday and rose on Wednesday by three per cemt. Gold, however, remained low………………………………………..Full Article: Source

Jim Cramer: This Commodities Rally Has Legs

Posted on 10 March 2016 by VRS  |  Email |Print

The commodities rally that began several weeks ago is the real deal, TheStreet’s Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC’s “Stop Trading.”
“You may think that it’s just a short-covering rally, but it’s actual money being put on the line,” he said. As proof he pointed to the Baltic Dry Index, which shows the commodities rally really took off around Feb. 24. The index includes 23 shipping routes and covers different carriers carrying a range of commodities including coal, grain and iron ore………………………………………..Full Article: Source

If Gold Has Turned Bullish, Can Silver Be Far Behind?

Posted on 10 March 2016 by VRS  |  Email |Print

The price of gold and silver tend to move together, but they can peak and bottom at different times. According to the charts, gold has entered a bull market, but silver hasn’t. The gold/silver ratio indicates silver is at a long-term inflection point indicating a bottom. As long as gold remains bullish, silver will follow although it may take a while longer.
Gold and silver tend to trade together over time, although one can lag the other by some months. Coming off a bottom, it makes sense that gold would rally first since it is primarily an investment vehicle with most of its usage going to bullion bars, coins, and jewelry (in most countries, jewelry is the preferred method for owning gold)……………………………………….Full Article: Source

The problem with the commodity bounce: ‘There’s no juice there’

Posted on 09 March 2016 by VRS  |  Email |Print

After years of underperforming stocks, commodities are beating the S&P 500 this year, at least as measured by the Dow Jones Commodity Index. But some traders still advise staying far away from the commodity space.
The recent move higher is “definitely a head fake,” Boris Schlossberg of BK Asset Management said Monday on CNBC’s “Power Lunch.” The biggest problem, he said, is that little has changed. Most commodities have slid due to strong supply and disappointing demand, and these fundamental factors remain intact………………………………………..Full Article: Source

How far can the commodities rally go?

Posted on 09 March 2016 by VRS  |  Email |Print

As is the trend these days, where the miners go, the FTSE 100 is sure to follow. So, unsurprisingly, profit-taking in the commodities sector is the main reason why London’s blue-chip index is nursing losses Tuesday. With many miners having surged by 50% or more since mid-January, investors are rightly wondering how far the rally has to run.
The timing and breadth of the upturn certainly caught many investors off guard. Anglo American was the proverbial falling knife until January, since when its share price is up more than 160%. Glencore, once everyone’s favourite dog to kick, is up 126% in the past seven weeks………………………………………..Full Article: Source

Why gold could rally by 50 per cent over the next two years

Posted on 09 March 2016 by VRS  |  Email |Print

Global investment advisory firm CrossBorderCapital explains why gold bullion is its high conviction trade this year and why it expects the commodity’s price to soar over the course of this year and 2017. The price of gold bullion is likely to soar over the course of this year and next year, according to the latest liquidity report from CrossBorderCapital, who expect the precious metal to reach $2,000 in 2017.
The investment advisory firm believes that the changing mix in global liquidity fuelled by monetary policy will continue to weaken paper money and therefore lead to strong gold prices………………………………………..Full Article: Source

The Commodities Rally Isn’t Built to Last

Posted on 07 March 2016 by VRS  |  Email |Print

It’s clear now that U.S. markets, in their swift early-2016 downdraft, were too worried about the risks of a recession. Friday’s jobs number helped put most lingering doubts to rest. Now, the opposite question is on the table. Are the markets, especially recently buoyant commodities and emerging markets, correctly predicting a ​global economic rebound that would undo the damage from last year?
Friday’s U.S. trade data say these markets are wrong and that the global economy is weak at best. The U.S. trade deficit grew 2.2% on the back of lower imports and exports, with shipments declining for nearly everything except for cars………………………………………..Full Article: Source

Saudi’s OPEC Love-In Has Limits

Posted on 07 March 2016 by VRS  |  Email |Print

Why is Saudi Arabia even prepared to discuss supply restraint?A second meeting has been pencilled in by the kingdom, Russia, Venezuela, Qatar and an unspecified group of oil producers (OPEC and non-OPEC) to talk again about the proposed output freeze, according to Nigerian petroleum minister Emmanuel Kachikwu.
But no-one should read this as a sudden outbreak of altruism in Riyadh.Non-OPEC producers Mexico and Oman might hope to get an invitation to the meeting, and they’ve both joined in with supporting prices in the past. When the group does get together, though, one big market participant certainly won’t be there: the U.S. shale industry………………………………………..Full Article: Source

Who’d you thank for surging gold price? Thank Donald Trump

Posted on 03 March 2016 by VRS  |  Email |Print

Gold was enjoying another solid day of trading on Thursday jumping to a day high of $1,245 an ounce and bringing its gains for the year to 17%. Following three down years, many factors have been driving gold’s resurgence in 2016:
Geopolitical turmoil – spreading from the Middle-East into Europe and beyond – burnishing gold’s safe haven status. Doubts about the health of the global economy and financial system and the longer-term impact of the slump in oil prices forcing investors to look for insurance policies……………………………………….Full Article: Source

Gold’s price rally has diehard fans excited – but for how long?

Posted on 01 March 2016 by VRS  |  Email |Print

China is wobbling, oil is plummeting, Britain is threatening to quit Europe. And the gold bugs couldn’t be happier. With a 15% gain in 2016, gold’s rally has its diehard fans excited. But for how long?
This is the metal’s best start since 1980, when gold prices rallied about 270% to then all-time highs of $850 an ounce on an oil-supply shock crisis and raging inflation. This year gold prices are higher on worries over economic weakness in China and Europe, and the Bank of Japan’s surprise move to negative interest rates………………………………………..Full Article: Source

This chart suggests Chinese demand for commodities will remain weak in 2016

Posted on 29 February 2016 by VRS  |  Email |Print

Last week we brought you the news that new home prices in the southern Chinese city of Shenzhen soared by more than 50% in the 12 months to January, a figure that put the likes of New York, London and Sydney to shame in terms of annual rates of growth.
However, while prices are ripping higher in Shenzhen, along with other major Chinese centres such as Shanghai and Beijing, the gains elsewhere in the country are nowhere near as strong, doing little to lift sentiment towards the outlook for construction, commodity demand or a broader housing market recovery in China in the period ahead………………………………………..Full Article: Source

Gold Industry: Considered as the safest bet for investment in devious times

Posted on 26 February 2016 by VRS  |  Email |Print

Gold is a precious metal and has high ductility as well as malleability, mainly used as jewellery and for investment purposes globally. Gold is currently oversold in a bearish market attributed to its escalating high prices. Gold is considered as the safest bet for investment in devious times of war and high inflation with currency fluctuations.
Recent rebellions and war events in the Middle Eastern countries of Tunisia, Libya, Egypt, Syria and now Ukraine has led to rise in investments in bullion. This has caused overselling of gold and thus rapid increase in prices worldwide. Rising prices are expected to be a major factor driving the global gold market as more and more consumers are purchasing gold as a mean of long terms investments……………………………………….Full Article: Source

3 Ways to Make Precious Metals Print Money

Posted on 26 February 2016 by VRS  |  Email |Print

From an investment standpoint, most investment managers will suggest you put 2% to 3% of your portfolio into precious metals for diversification purposes. The problem with that approach is that precious metals are highly cyclical and volatile, and they don’t have a long-term positive upward bias like equities.
That’s no good for buy-and-hold investors, and instead means that precious metals are much more suited to trading. Of course, the problem with trading precious metals is the very same cyclicality and volatility they exhibit………………………………………..Full Article: Source

Here’s Why Oil Could Be Headed to $0

Posted on 25 February 2016 by VRS  |  Email |Print

You don’t need to be an economist to know that the oil market is bonkers these days. The price of oil has fallen roughly 70% over the past 18 months to a recent $32 a barrel, with many analysts believing the all-important commodity has further to fall. But could oil prices fall all the way to zero? Yup, at least according to one analysis.
Economists at the Federal Reserve Bank of St. Louis recently took a look at the interplay between inflation expectations and oil prices, and built a model around that. What they found is that if the market’s current inflation expectations are correct, then oil prices are likely to fall all the way to $0 per barrel by mid-2019……………………………………….Full Article: Source

Central Banks Could Send Gold Bullion Soaring

Posted on 25 February 2016 by VRS  |  Email |Print

If you are looking to get direction on where gold bullion prices are headed, then look at the central banks around the world. They are becoming a major player in the gold market.
Simply put, central banks are buying gold bullion. This phenomenon shouldn’t go unnoticed whatsoever. Central banks could send gold bullion prices much higher. Consider this; in 2015, central banks purchased 588.4 tonnes of gold bullion. In 2014, they purchased 583.9 tonnes of the yellow precious metal. Mind you, they have been buying for a very long time………………………………………..Full Article: Source

The geopolitics of the Saudi-Russia oil price freeze

Posted on 24 February 2016 by VRS  |  Email |Print

Saudi Arabia and Russia, the world’s two most powerful oil producers, have reached a tentative agreement to freeze oil production at its current levels. As the first deal between an OPEC and non-OPEC member in 15 years, it marks a significant declaration of intent. But it is not geared toward buoying oil prices, as some might hope. Rather, it has much more to do with blocking Iran’s re-emergence as a global oil exporter.
The agreement between the two countries to keep output at January levels led to much noise of a market rally, with little to show in the way of gains. The benchmark price of Brent crude jumped briefly from US$33.4 to US$35.55 a barrel but it will not lead to a sustained rise in prices………………………………………..Full Article: Source

OPEC doubts it can ‘live’ with US shale

Posted on 24 February 2016 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries (OPEC) has raised doubts about its common future with US shale oil. After Congress lifted the oil export ban last December, the US is expected to boost crude production dramatically. “Shale oil in the United States, I don’t know how we are going to live together,” said OPEC Secretary General Abdalla Salem el-Badri.
“I talk to the EU, I talk to the Russians, I talk to the Chinese, I talk almost to everybody except the United States — what I want is a dialogue…The United States wants to export, but at the same time they import and store. This is something that I don’t know how we’re going to tackle,” he said………………………………………..Full Article: Source

Gold to remain well supported globally

Posted on 22 February 2016 by VRS  |  Email |Print

There was a tussle between the bulls and bears in the bullion markets last week and could spill over to this week as analysts are concerned about the state of the global economy, the risk of debt default and equity weakness On Wednesday gold soared one per cent to a one-year high, breaking a three-day losing streak to trade above the key $1,200-an-ounce level as Asian stock markets saw a rout and the dollar slipped.
It gave up some gains as equities steadied after gold fell during Asian trading hours on Friday after rallying overnight to a week’s high of $1,240.10 per ounce. “But the yellow metal remained well-supported on global economic uncertainty,” said Prithviraj Kothari, MD, Riddhi Siddhi Bullion………………………………………..Full Article: Source

Commodities’ well-travelled road to nowhere. Cutting output: Russell

Posted on 19 February 2016 by VRS  |  Email |Print

Live and don’t learn. That should be the motto of commodity producers whoattempt to push prices higher by trying a variety of methods torestrict supply. While the call by major producers including Saudi Arabia andRussia to freeze crude oil output at current levels is theheadline of the week, it’s merely the latest in a long line ofattempts to arrest sliding commodity prices.
In recent years various governments, producer bodies andeven companies have tried to influence commodity markets intheir favour, mostly with only very limited success. Thailand tried to push Asian rice prices higher in 2011 byrestricting supply in the mistaken belief that this would allowthe government to pay for a generous subsidy scheme for farmers………………………………………..Full Article: Source

Commodities: The Bottom Is Looking Mighty Ugly

Posted on 17 February 2016 by VRS  |  Email |Print

The commodity bear is not hibernating. Prices are above 2000 levels with divergence. Contagion from raw material markets - the dollar ain’t helping. Stocks and currencies are watching raw material prices. China returns from holiday - uh oh.
Last week was an odd one in the commodity sector. While the bear market continues to cause low prices in the energy and industrial commodity sector, precious metals exploded higher. Divergence is the name of the game in the wild markets of 2016. Volatility tends to create divergence in terms of historical price relationships between assets………………………………………..Full Article: Source

Goldman Sachs: Gold Prices Bound To Fall As Economic Fears Diminish

Posted on 17 February 2016 by VRS  |  Email |Print

When global markets seize up, investors retreat to safe-haven assets: cash, bonds and gold. But the rush from stocks in recent weeks may have pushed gold prices well beyond what economic fundamentals suggest is appropriate, Goldman Sachs said Tuesday.
Investor fears around slowing output from China, negative interest rates and slumping oil prices “have likely been overstated in the gold price and other financial markets,” analysts with the investment bank said………………………………………..Full Article: Source

Why gold has utterly failed as a ‘safe haven’

Posted on 17 February 2016 by VRS  |  Email |Print

Can everyone please stop calling gold a “safe haven” every time the stock market tanks and bullion goes up a few percent? It’s been happening again lately. Last week gold jumped by $80 an ounce as stocks swooned, and the usual “safe haven” claims were wheeled out yet again.
Matt Drudge of the Drudge Report, who certainly knows his readers, even splashed with a panic-buying-of-bullion story. (It came from London’s Daily Telegraph, which certainly knows what stories might attract Matt Drudge.) Yes, gold is up 17% since Jan. 1. It’s a great performance, so long as you don’t look at the long-term picture………………………………………..Full Article: Source

Gold bugs prosper in negative yielding world

Posted on 16 February 2016 by VRS  |  Email |Print

Gold’s best start to the year since 1980 has been good for Josh Saul, a former metals trader who runs a bullion company based next to the Bank of England. He has had to hire 10 temporary staff to deal with the volume of calls to the Pure Gold Company that he founded three years ago.
“We’ve seen a huge increase in the amount of inquiries and the amount of people looking to remove exposure to equities, banks, bonds and government debt,” he says………………………………………..Full Article: Source

Gold begins to glitter

Posted on 15 February 2016 by VRS  |  Email |Print

It looks like exciting times are back for gold investors. The big gold bears in the market were caught unawares last week as gold surged to a high of $1,263.5/ounce on Thursday. It ended the week at $1,237.9/ounce, up 5.4 per cent for the week and 15 per cent on a year-to-date basis for 2016.
Silver and platinum rallied about 5 per cent each and closed at $15.7/ounce and $955/ounce, respectively. Investors rushed to buy units of SPDR Gold Trust (the largest gold backed exchange traded fund in the world). ETF holdings increased by 12 tonnes over the week, all thanks to a weak dollar………………………………………..Full Article: Source

Gold sparkles amid market mayhem

Posted on 15 February 2016 by VRS  |  Email |Print

A collective $3 billion in market value has been added to the thriving Australian gold sector in the past week as established producers and junior project developers alike continue a golden run. An analysis of the bulk of the Australian Securities Exchange-listed gold sector revealed its collective market capitalisation had increased by $7.9 billion to $26.6 billion in the past three months.
The increase included a rapid $3.1 billion rise last week alone as the Australian-dollar gold price edged up to $1740 an ounce. Spot gold was trading at about $US1237 an ounce on Friday, up almost 17 per cent since January 1………………………………………..Full Article: Source

The Commodities Bubble: History Repeats Itself

Posted on 12 February 2016 by VRS  |  Email |Print

All bubbles share similar characteristics. It all starts with strong demand for some object, whether it’s stocks, homes, commodities or tulips. In commodities, a bubble formed on hopes that China’s rapid growth would feed an ever-expanding appetite for raw materials.
Moreover, in 2008, China launched a huge $586 billion economic stimulus plan, leading to higher demand for commodities and, therefore, rising prices. But prices weren’t reflecting real growth, either. They were inflated as fake demand was created on the construction of excessively extravagant government buildings and uninhabited “ghost cities” in China………………………………………..Full Article: Source

Tullow Oil chief: Crude oil price to jump to $65

Posted on 12 February 2016 by VRS  |  Email |Print

Oil prices should recover in the second half of this year and end 2016 at between $60 and $65 per barrel, Tullow Oil chief Aidan Heavey has said. Heavey, but said the second half of this year should see signs of recovery both for Tullow and the broader industry.
He added that a more gradual rise from $60/$65 per barrel could be seen in 2017 — came a day after prices saw their third biggest daily fall in eight years and a month after they hit 12-year lows of around $28 per barrel. Yesterday they were hovering around the $30 mark………………………………………..Full Article: Source

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