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Have Metals Finally Bottomed?

Posted on 07 July 2014 by VRS  |  Email |Print

I completely understand that you might think I am crazy for trying to call a bottom in the metals and mining sector. I probably am. Furthermore, I understand the “China slowdown” mindset very well. After all, the interesting fact has been how strong Chinese growth has been and how the country hasn’t experienced one simple recession yet (similar to Australia, where we have not had a technical recession in over 20 years).
Quite an amazing feat to be honest, but eventually we will have a mean reversion (in both countries). Personally, I have been expecting the negative surprise and even a potential recession to occur since late 2010. I rightfully warned my business partners against expanding the mining exploration company back in those days………………………………………..Full Article: Source

Now is the time to buy gold – Nichols

Posted on 04 July 2014 by VRS  |  Email |Print

One of the problems facing the potential gold investor who may see the longer term future of the precious metal as being decidedly positive, is when to actually step in and buy bullion, bullion related securities or gold stocks. Respected New York gold analyst, Jeff Nichols, feels that the time may well be now.
Nichols recommends holding a proportion (perhaps 5-10%) of one’s investment portfolio in physical gold, thus providing a variety of benefits – portfolio appreciation, diversification, reduced portfolio volatility, risk reduction, inflation protection, and more. Given that Nichols describes himself as not being a ‘gold-bug’ he does reckon to be ‘super-bullish’ on gold’s longer term prospects………………………………………..Full Article: Source

Gold rush: Is it really worth investing in?

Posted on 03 July 2014 by VRS  |  Email |Print

Gold is generally seen as a safe haven during periods of high inflation. As inflation increases, the value of money decreases and the prices of all goods increase. People prefer to hold gold instead of cash during these periods as gold acts as a retainer of value for them.
Traditional theory states that prices of real assets such as gold does not change permanently in times of high inflation but changes proportionately with the rate of inflation………………………………………..Full Article: Source

Silver Short Squeeze Presents New Opportunity

Posted on 27 June 2014 by VRS  |  Email |Print

A short squeeze in the silver market is pushing prices profoundly higher, the consequence of which could be felt for years. All told, the month of June has witnessed silver rise by over 12%. But the truly aggressive price action began exactly a week ago – with a single-day move from $19.81 to nearly $21.
Short squeezes occur when short sellers close their positions with a heightened sense of purpose and haste. Such behavior can cause prices to move sharply higher. That is, since closing a short position requires one to buy shares………………………………………..Full Article: Source

Blame the media for gold’s decline: Marc Faber

Posted on 18 June 2014 by VRS  |  Email |Print

Investors who favor gold have provided many reasons for gold’s nearly 30 percent decline in 2013 and overall demolition since it hit $1,934 in September 2011. But on CNBC’s “Futures Now,” noted investor Marc Faber provided an especially interesting one.
Investors are shunning gold “because the media doesn’t like gold,” Faber said by phone Tuesday from Thailand. “Nobody at CNBC owns gold. Nobody at Bloomberg owns gold. Gold is being constantly talked down by the media, and Fed officials, and economists, who also don’t own any gold. They’re all stocked up in equities.”……………………………………….Full Article: Source

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Is Silver Set Up For A Huge Short Squeeze?

Posted on 13 June 2014 by VRS  |  Email |Print

An interesting and rare set-up has developed in the Comex silver futures Commitment of Traders weekly position report (COT report). This is a report issued by the CFTC (Commodity Futures Trading Commission) which shows the long/short futures positions for various categories of traders.
The position report issued last Friday for Comex silver futures traders shows extreme positioning for both the “commercial” and “managed money” segments. In addition, there are signs of possible supply/demand stress for physical silver in China. As I will detail below, both indicators are indicative of a possible short squeeze developing in silver………………………………………..Full Article: Source

Gold Much Harder Sell, Palladium Looking Strong (Video)

Posted on 13 June 2014 by VRS  |  Email |Print

Which precious metal will most likely prevail this coming year? Palladium says Philip Newman, director of Metals Focus, to Kitco News at the IPMI Conference. “I think, in terms of palladium, the underlying supply-demand picture is very strong from a price point of view,” he says. “I think we’ll see gold and silver struggle relative to the PGMs.”
Newman says gold and silver prices will most likely remain range-bound for the next few months and even into early next year. “This year, we’re not seeing mass liquidations, that is really behind us, but at the same time we’re not seeing a great deal of net new demand from the investment community coming in.” ……………………………………….Full Article: Source

A Bear-Raid on Gold – Is that about to happen?

Posted on 11 June 2014 by VRS  |  Email |Print

After some considerable selling of gold from the SPDR gold Exchange Traded Fund in the preceding months, early in 2013, Goldman Sachs came out with a warning that the gold price was going to fall and fall heavily. It did after Goldman Sachs and JP Morgan Chase helped it down with a bear-raid. Thereafter, selling from the SPDR fund persisted throughout 2013.
But it became clear that this selling of physical gold provided an opportunity to ‘short gold’. Goldman Sachs along with JP Morgan Chase and their clients, followed through on their forecast and around mid-April 2013 plus/minus 400 tonnes of gold was dumped onto the market knocking the gold price down by $200 within a fortnight………………………………………..Full Article: Source

Gold’s key fundamental driver

Posted on 09 June 2014 by VRS  |  Email |Print

Barry Ritholtz is out with another article spelling more doom for the precious metals sector and the gold bugs. The self-proclaimed “Gold Agnostic” penned a 2,500 word missive in January which followed a blog post amid the spring 2013 collapse titled “What are Gold’s Fundamentals.”
For the record, Ritholtz’s calls on the markets and gold have been very good. He was bullish during most of the 2001-2011 advance and sold out prior to the 2013 breakdown. But while the anti-gold bug mainstream eat up his gold analysis like a lap dog, we have to mention some errors and a startling omission of gold’s key driving force………………………………………..Full Article: Source

Gold Rallies While Commodities Hold Declines After ECB

Posted on 06 June 2014 by VRS  |  Email |Print

Gold climbed the most in three weeks as commodities held declines, heading for the longest losing streak since January, after the European Central Bank unveiled measures to spur the economy and fight deflation.
The Standard & Poor’s GSCI gauge of 24 raw materials fell 0.4 percent for a fifth day of declines, lead by soybeans and wheat. Gold rallied as much as 1.1 percent to $1,257.73 an ounce in London, the biggest gain since May 14, as some traders closed bets on falling prices. Copper also fell………………………………………..Full Article: Source

Why Silver Miners Aren’t Worth Investors’ Time

Posted on 06 June 2014 by VRS  |  Email |Print

When Thomas Jefferson or whoever the final draftsman of the Declaration of Independence actually was (John Adams, Ben Franklin, Robert Livingston, and Roger Sherman all participated) penned the words, “Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes,” he very well might have been talking about intermarket analyses.
Here is a truth I hold to be self-evident: Markets with an inverse relationship extending back for more than two decades should not shift to a direct relationship without a compelling reason………………………………………..Full Article: Source

Why I (Still) Hate Gold

Posted on 03 June 2014 by VRS  |  Email |Print

The yellow metal has a mystique. But when all is said and done, it is just another commodity. Let me put my prejudices on the table: I loathe gold. Not as jewelry but as an investment. In fact, I loathe all commodities. The main reason is that many years ago I fell under the spell of an exceptionally smart and likable economist named Julian Simon.
In 1980, Simon proposed a wager with Stanford biologist Paul Ehrlich, author of The Population Bomb, a popular book that asserted that because of global population growth, demand for natural resources would soon outstrip supply………………………………………..Full Article: Source

India: Demand for hard commodities may rise on infra ramp up

Posted on 02 June 2014 by VRS  |  Email |Print

Riding on the wave of ache din and expecting the Narendra Modi government to wave a magic wand that can yield miraculous results, most investors, industrialists as well as those in the service sector believe this to be the turnaround story of the decade.
Joining the bandwagon, HSBC Global Research in a research report titled ‘Commodities and India’ says if all goes well, India’s commodity demand will receive significant support in the coming years if the country’s infrastructure investment ramps up. The new government is expected to prioritise infrastructure development, which is the key source of demand for hard commodities, it adds…………………………………….Full Article: Source

Global gold prices will depend on India’s import policy: S&P DJI

Posted on 29 May 2014 by VRS  |  Email |Print

Even as the risk appetite in the West is on the rise and US manufacturing activity is gaining momentum, gold prices may take a cue from India’s policy on imports, according to experts at S&P Dow Jones Indices.
The experts at S&P DJI noted that gold as a safe haven investment instrument was slowly losing sheen on account of tapering programme by the US Federal Reserve and improvement in the investment environment. Investors used gold as a store of value in the instances of crisis or inflation to safeguard the real value of the investments………………………………………..Full Article: Source

If Market Can’t Hold $1,220, Gold May Head Towards $1,000: iiTrader (Video)

Posted on 29 May 2014 by VRS  |  Email |Print

Kitco News speaks with iiTrader’s Bill Baruch, following gold’s dip below $1,260 on Wednesday, to see if he thinks the yellow metal is headed lower. “A lot of volume was built in these June options that went off yesterday so we started to see a move ahead of that [on Tuesday] and the market took the downturn,” he says.
“The Ukraine situation seemed to take a step in a positive direction and any safe-haven buying that was found because of that was then coming out of the metal as well.” Baruch says that it is important to keep an eye on the ECB meeting, as well as nonfarm payrolls, next week. He also says that it is important for gold to hold the $1,220 level………………………………………..Full Article: Source

Palladium reaches 3-year high as gold sags

Posted on 29 May 2014 by VRS  |  Email |Print

Palladium rose to the highest since August 2011 after mining companies and the main labor union failed to reach an accord to end a pay strike in South Africa, the second-biggest producer. Gold fell to a 15-week low.
Palladium has risen 12 percent since Jan. 23, when the workers walked out. The country’s new miningminister will talk with the companies after meeting leadership of the Association of Mineworkers and Construction Union yesterday, his department said in a statement on its website………………………………………..Full Article: Source

Here’s the real reason gold is falling

Posted on 28 May 2014 by VRS  |  Email |Print

Are you surprised gold bullion has been weak recently, including a 2% drop today? You shouldn’t be. It’s exactly what contrarian analysts were forecasting at the beginning of this month, given the absence of the high wall of worry that bull markets like to climb.
Unfortunately for gold enthusiasts, the market has no better sentiment today than it did a month ago. Consider the average recommended gold market exposure among a subset of short-term gold market timers, as measured by the Hulbert Gold Newsletter Sentiment Index (or HGNSI). The average currently stands at close to zero — minus 3.3%, to be exact………………………………………..Full Article: Source

Gold steady as US data eyed; platinum group metals rise

Posted on 27 May 2014 by VRS  |  Email |Print

Gold was little changed on Tuesday as investors await U.S. economic data for directional cues, while platinum group metals rose for a second day as labor strikes dragged on in key producer South Africa.
Spot gold was flat at $1,292.40 an ounce by 0027 GMT. The metal has been trading in a tight range in the last few sessions, struggling to get past $1,300. Investors were also eyeing developments in Ukraine, after it launched air strikes and a paratrooper assault against pro-Russian rebels who seized an airport on Monday………………………………………..Full Article: Source

Silver Still Coiling

Posted on 26 May 2014 by VRS  |  Email |Print

As Silver continues to trade in an ever tight range between about 19.10 and 19.90 an ounce, I am sure many would rather watch paint dry than follow this market.
However, the kind of coiling going on right now in the silver market reminds me of prior periods where the bears get exhausted and a major counter-trend rally to the upside develops. We are a long way away from knowing whether or not any rally is the resumption of a new bull market that can take the price of silver to new all time highs………………………………………..Full Article: Source

Commodities in the spotlight as Ukraine crisis cranks up

Posted on 22 May 2014 by VRS  |  Email |Print

Commodities markets reacted violently—a spike and a drop—to the escalation of the conflict in Ukraine because of Russia’s dominant role as a commodities producer, but most of the “Russia commodities” including oil, gas, gold and nickel have returned to their pre-crisis level, indicating that other factors such as the weakening of the Chinese economy are playing a bigger role in the markets at present.
Given the volatility in commodities prices since the beginning of the year and the ever bubbling crisis in the Ukraine, it is no surprise that investors in commodities remain unnerved. Clearly, investment managers are keeping a close eye on the geopolitical morass of the Ukraine crisis, remaining at the ready should any major change occur………………………………………Full Article: Source

Who needs gold really?

Posted on 22 May 2014 by VRS  |  Email |Print

People love to debate, but sadly sometimes it crosses a line and turns argumentative. That’s what is happening right now with the debate over gold. There have been several high-profile articles, most recently in the Wall Street Journal, saying you should eliminate gold as a worthwhile part of your portfolio. Primarily because of this year’s lower price.
Against that idea, many bloggers and private investors, wondering why gold prices have fallen, say that it shouldn’t have dropped. There must be some conspiracy driving down prices when money-printing and our still-weak economy should be driving gold higher………………………………………Full Article: Source

Gold demand in India to rise, Modi seen easing import curbs

Posted on 22 May 2014 by VRS  |  Email |Print

India’s gold demand is likely to pick up in the second half of the year as curbs on bullion imports are expected to be eased by the country’s new government, the World Gold Council (WGC) and other industry officials said on Tuesday.
Gold imports by India, the world’s No. 2 bullion consumer after China, could double from current levels if the restrictions are eased, according to an industry estimate. This would help global prices that slumped 28 percent last year - the first drop in 13 years - partly due to India’s curbs………………………………………Full Article: Source

Palladium Rises to 33-Month High on Supply Concerns

Posted on 22 May 2014 by VRS  |  Email |Print

Palladium futures rose to a 33-month high as South African supply concerns spurred demand for exchange-traded products backed by the metal used in jewelry and pollution-control devices in cars.
In South Africa, the world’s second-biggest producer, workers at the top three mining companies have been on strike since late January, crippling output. Investors boosted their holdings of ETPs to a record 86 metric tons on May 19, data compiled by Bloomberg show. Futures have climbed 16 percent this year………………………………………Full Article: Source

GCC economies must reduce dependence on commodities

Posted on 21 May 2014 by VRS  |  Email |Print

Falling oil prices will pose a challenge to GCC hydrocarbon exporters unless governments step up their diversification efforts and develop more export industries, according to a new report by ICAEW. In its latest quarterly Economic Insight report, produced by its partner, the Centre for Economics and Business Research (Cebr), the accountancy and finance body says expanding competitiveness across a broader range of export industries will require improvements in education, skills and innovation to be successful.
According to Economic Insight: Middle East Q2 2014, GCC economies are now more dependent on commodity exports than they were 10 years ago despite the diversification agenda. Commodities still account for 86.8 per cent of Saudi Arabia’s total goods exports by value and nearly two thirds of the UAE’s. Even Bahrain, with the fewest hydrocarbon resources of any GCC economy, relies on commodity exports for nearly three-quarters of goods exports…………………………………..Full Article: Source

World Gold Council: First-Quarter Demand Holds Steady With Year-Ago Levels At 1,074.5 Tons

Posted on 21 May 2014 by VRS  |  Email |Print

Gold demand in the first quarter was 1,074.5 metric tons, on par with bullion demand the first quarter of last year, the World Gold Council said Tuesday. Compared demand in the first quarter of 2013 of 1,077.2 tons, gold demand in the first quarter of this year was down 0.25%. The WGC said jewelry demand rose 3% because of lower prices versus the first quarter of last year, along with season factors such as Chinese New Year. China saw record first-quarter jewelry demand, the group said.
Investment demand in the first quarter was 282.3 tons in the first quarter, down 2% from the 288.1 tons bought in the first quarter of 2013. The investment demand breakdown shows that exchange-traded fund flows were essentially zero, while bar and coin demand fell 39% from year ago levels, down to 282.5 tons…………………………………..Full Article: Source

Gold ‘Guru’ Gives Long-Term Forecast, Indian Gold Bullion 2.1% Lower

Posted on 19 May 2014 by VRS  |  Email |Print

Jeff Nichols, Managing Director of American Precious Metals Advisors, had a rather sour outlook on gold price trends lately, as all gold prices on the MetalMiner IndX rose over the past day.
“Longer term, Nichols reckons that over the next three to five years the demand from Asia and, also from Central Banks which have been buying gold rather than selling it over the past couple of years, will actually be sufficient to drive the gold price higher regardless,” according to a Mineweb article spotlighting his forecast…………………………………….Full Article: Source

People Rush to Sell Off Gold as Anxious Escalates Over Price Fall

Posted on 16 May 2014 by VRS  |  Email |Print

The escalating anxious that gold prices would fall as the Indian Rupee gains strength against the US Dollar has spiked to sell the domestic gold. As per the market review, Last days, the gold has gained as the jewelers have sold out the past orders for the precious metal.
Mr. Anish Jitendar Jain, director of a Mumbai based scrap gold firm said that the people are rushing to market to sell out their gold ornaments. They have panicked that the gold prices would plunge after the election results………………………………………..Full Article: Source

Gold Is Not Stable After All

Posted on 16 May 2014 by VRS  |  Email |Print

I like gold. My wedding ring is simple but classy. My crowns in my mouth are so good that I forget they are there. The electronic contacts in my computer work just fine. Gold is great. But not as a steady measure of purchasing power, nor as a guaranteed investment.
“Gold has the same purchasing power today that it had in 1913,” I continue to read. So let’s look at the data and see what we can conclude about gold, its stability and purchasing power, and then we’ll turn to gold as an investment………………………………………..Full Article: Source

Appetite for silver at all-time high

Posted on 16 May 2014 by VRS  |  Email |Print

Global physical demand for silver rose 13 per cent in 2013 to an all-time high, driven primarily by a 76 per cent increase in retail investment in bars and coins, coupled with a sturdy recovery in jewellery and silverware fabrication.
Data compiled by a leading New York-based research agency, The Silver Institute, showed total physical demand for silver at a record 1,081 million ounces (Moz) or 30,649 tonnes in 2013, as compared to 954.4 Moz or 27,057 tonnes the previous year………………………………………..Full Article: Source

Silver Shone In 2013: Will It Continue?

Posted on 16 May 2014 by VRS  |  Email |Print

Towards the end of last year we noticed that The Real Asset Company clients were going hell-for-leather for Silver bullion investment. I would guess that during November we sold more silver than gold, in dollar terms. This was interesting given both gold and silver fell and yet there was an almost delayed reaction from silver buyers, who saw a four year lows in the industrial precious metal.
So, it came as no surprise when the Silver Institute yesterday released their World Silver Survey 2014 with the headline ‘Total physical silver demand achieved record level in 2013’. Andrew Leyland, of GFMS was impressed by silver’s performance and said that ‘silver seems to have retained a lot more loyalty than the other precious metals.’……………………………………….Full Article: Source

Where Gold And Industrial Commodities Are Heading

Posted on 16 May 2014 by VRS  |  Email |Print

Shorting gold when it rose to a record $1,895 per ounce on September 6, 2011 would have been a great trade, with the benefit of hindsight. It is down to $1,305 currently, with most of the decline occurring last year after the bulls lost their confidence in the precious metal when it didn’t soar after ECB President Mario Draghi’s whatever-it-takes speech and on the introduction of Abenomics.
A few contrarians I know are turning bullish on gold. They note that both the price of gold and the price of silver seem to be finding support at their 2013 lows. Silver is back at that low. However, it settled at its highest level in a month on Wednesday, buoyed by a report that said physical demand for the metal rose to a record last year………………………………………..Full Article: Source

Goldman Sachs Remains Bearish on Gold

Posted on 15 May 2014 by VRS  |  Email |Print

Goldman Sachs reiterated its bearish view on gold and copper Wednesday, but raised its forecasts for a host of other base metals, saying improved U.S. economic activity will weigh on gold, although the Ukrainian conflict may delay the move of weaker gold prices.
“While we remain bearish on gold, escalating geopolitical tensions in Ukraine have offset stronger U.S. macro data,” Goldman said. The firm said it continues to see gold prices by year-end at $1,050 an ounce. The silver-price forecast remains at $17.50 an ounce………………………………………..Full Article: Source

Silver Was Not In a Bubble in 2011!

Posted on 15 May 2014 by VRS  |  Email |Print

The April 2011 silver price spike was NOT a bubble. The January 1980 silver price blow-off was a bubble, and it was materially different from the April 2011 price spike. I fully expect a bubble in silver – someday – but that day is months or years into the future.
Prices for food, energy, silver and gold are going up – broadly speaking – along with the national debt, money supply, and similar measures of debt and credit. Since we KNOW national debt will increase for the foreseeable future, plan on the prices for food, energy, silver, and gold increasing similarly………………………………………..Full Article: Source

Why you should short gold now: BofA technician

Posted on 14 May 2014 by VRS  |  Email |Print

Is it time to short gold? That’s the latest call from MacNeil Curry, head of global technical strategy at Bank of America Merrill Lynch, who says the yellow metal is poised to drop as much as 9 percent.
“First and foremost, we’ve been in a medium-term downtrend since peaking out back in March at about the $1,392 area. And price action since the beginning of April has done nothing to reverse that downtrend. All we’ve been doing is consolidating,” Curry said……………………………………….Full Article: Source

Commodity exposure: What currently keeps us away?

Posted on 13 May 2014 by VRS  |  Email |Print

Financial, rather than industry players have become a much more important factor in the price action of almost all commodities. This in turn leads to greater price volatility, and greater correlation with other financial assets, therefore reducing the diversifying characteristics of the asset class.
That is not to say that there are no opportunities. There are. And we seek to take advantage of specific opportunities as we see them. But a blanket commodity-index exposure we believe has less value for these reasons, as well as for the simple fact that the broad commodity indices are overwhelmingly dominated by energy components………………………………………..Full Article: Source

Gold price likely to moderate in medium term

Posted on 13 May 2014 by VRS  |  Email |Print

While gold had a tremendous run in the last few years, fuelled by turbulence in the global economy, prices are likely to moderate in the medium term with an improving economic environment, experts said.
Nilesh Gupta, Chairman, Administrative Committee, India Bullion & Jewellery Association (IBJA) felt that there was an overall bearish mood about gold “on the part of the trading fraternity given the developments over several months in India, although there is optimism that a new government would tackle issues like high duty and the 80:20 scheme”. On Monday, gold was trading at $1,300 levels and at Rs.28,700 per 10 gram levels on the MCX………………………………………..Full Article: Source

Exchange-Traded Confusion

Posted on 13 May 2014 by VRS  |  Email |Print

Exchange-traded funds and all the products related to them have terminology that’s foreign to many investors. People hear “ETF” and they assume every product that’s called an ETF is the same. They’re not. Product structure can have big implications for investors, especially if it’s held in a taxable account.
There are five basic exchange-traded product (ETP) structures: Open End Funds, Unit Investment Trust (UIT), Grantor Trusts, Limited Partnerships and Exchange-Traded Notes………………………………………..Full Article: Source

What Is The Next Bullish Fundamental Driver For Gold?

Posted on 12 May 2014 by VRS  |  Email |Print

During the final phase of the last Gold rally between 2008 and 2011, we heard a lot about any number of bullish catalysts for gold: The long term decline of the US Dollar as the world’s reserve currency,Insatiable Asian demand for physical gold, The specter of hyperinflation resulting from the Federal Reserve’s quantitative easing policies, Negative real interest rates, Central bank accumulation of gold, And the list goes on……
As we sit here today in May 2014 none of these formerly bullish fundamental drivers appears to carry much weight in driving the day-to-day price of gold. When will this change? And what will be the next major fundamental driver in the next leg higher for gold?……………………………………….Full Article: Source

Silver Volatility Levels Near 10-Year Lows

Posted on 08 May 2014 by VRS  |  Email |Print

Silver prices are nearly unchanged on the year, underperforming the rest of the precious metals complex, and with its sluggish price action, options volatility levels are near multi-year lows. Having such low volatility is unusual for silver, and one analyst said it’s a situation that’s unlikely to last.
Mike McGlone, head of U.S. research for ETF Securities, said 30-day silver options volatility is around 12% as of Tuesday’s close, coming just off a 10-year low made during last week’s price drop………………………………………..Full Article: Source

Gold price to hit US$3000 within 2 to 3 years

Posted on 07 May 2014 by VRS  |  Email |Print

Ian Williams, co-fund manager of the WAY Charteris Gold & Precious Metals Fund, has told Every Investor that he believes both gold and silver will hit new highs within the next 2 to 3 years. Since launch in February, 2010 the fund has lost approximately 50% for investors in line with the performance of other gold funds over that period.
Yet, Williams believes this is set to change as the gold market is currently in ‘backwardation’, when the spot price is higher than the nearest futures contract. Also, the selling of 700 tonnes last year by American holders of ETF’s has now dried up but the ongoing demand from Asia continues apace………………………………………..Full Article: Source

How China manipulate the REE prices?

Posted on 07 May 2014 by VRS  |  Email |Print

Lanthanum and cerium make up the bulk of what China produces in the REE space, but they’re not the value-added metals. Metals like europium may enjoy better prices, but they’re a small part of the whole REE complex. China’s bread and butter comes from Bayan Obo, which is not a rare earth mine at all. It’s an iron ore mine that produces REEs as a byproduct.
The Chinese can’t stop producing REEs at Bayan Obo because they’d have to stop producing the iron ore as well. One of the intriguing things about REEs is that you can’t just take the ones you want and leave the others behind. You have to go through the whole chemical extraction process to get those with the biggest market or the best price. You can’t send a metal into the tailings pond because it doesn’t have a good price today. You have to do them all………………………………………..Full Article: Source

2014: Year of Commodities (May)

Posted on 06 May 2014 by VRS  |  Email |Print

Thus far in 2014, April ended on schedule and May arrived as expected. Well-placed sources, wishing to remain anonymous as they are not at liberty to speak on the matter, suggest that June will also arrive on time. That seems to sum up the only accurate components of the consensus forecast for 2014. As the chart below portrays, just about everything else continues to do the opposite of what was generally expected by the popular seers on the future.
n the above chart are plotted year-to-date returns for several investment measures. Bars on the left, the ones continuing to show significant positive returns, represent the three components of the commodity sector. To the right, using red bars, are what would be commonly referred to as underperforming groups………………………………………..Full Article: Source

Gold is still good to have in portfolio: Religare Sec

Posted on 06 May 2014 by VRS  |  Email |Print

Gold is not correlated to other financial assets like equities and bonds. Having gold in your portfolio increases diversification . It is instantly liquid in any country in the world and is virtually indestructible. The year gone by saw a lull in gold prices and some serious short-selling by gold bears, especially after the Fed started shutting the stimulus tap progressively.
But unlike in the West, it is not just about calculated returns because in India we buy gold for a variety of reasons including ornamentation, investment, social compulsion as well as religious reasons. This has ensured that the limitations imposed by the government have led to the spot prices being higher than futures prices because buyers are ready to pay a premium to secure physical delivery………………………………………..Full Article: Source

Are commodities a good long-term investment?

Posted on 02 May 2014 by VRS  |  Email |Print

Since the beginning of this year, commodities have performed remarkably well. For example, while the S&P 500 has gained 2%, the Dow Jones Commodity index has gained 10%. Why have commodity values increased? Well, it is due to a number of reasons that include more positive news regarding the global economy, international political concerns, and extreme weather conditions.
Which Commodities are Currently Increasing in Price? Two commodities that have done particularly well are coffee and nickel with increases of over 15% in the past month alone. Coffee is up in price mainly due to the dry weather Brazil is experiencing, and nickel is mainly up in price due to the mineral ore export ban Indonesia imposed in January. However, as the economies in China, Europe, and the US improve, most base metals have benefited from the more positive economic news………………………………………..Full Article: Source

The Gold Price is Fixed. So What?

Posted on 02 May 2014 by VRS  |  Email |Print

We can’t ignore it anymore - the markets are rigged. The LIBOR scandal broke almost two years ago, and the banks found responsible for manipulating that key index are still dealing with lawsuits. Meanwhile, allegations of gold market manipulation have been simmering for over a decade and grew into an inferno after the spot price dropped dramatically last spring.
Yet I’m left wondering what the conspiracy theorists hope to accomplish. Yes, I believe in exposing truth for its own sake and that the individual investor should have the same opportunities in the marketplace as the big institutions. But with these conspiracists, there is often a subtext of, “Because the price is suppressed, buying gold is for suckers.” I think this conclusion is precisely wrong………………………………………..Full Article: Source

Deutsche Bank ditching gold and silver fix worries British regulator

Posted on 02 May 2014 by VRS  |  Email |Print

According to a Reuters report, Britain’s financial watchdog could intervene if there are too few participants to set commodity benchmarks including gold and silver. Since Deutsche Bank’s withdrawal from the fixing process, without a replacement, this leaves only four banks – Barclays, HSBC, Bank of Nova Scotia and Sociéte Generale involved in the twice daily London Gold Fixing process – and only two (HSBC and Bank of Nova Scotia) to fix the daily silver price.
Recently the London gold fixing process has come under considerable scrutiny following a research report by U.S academic, Professor Rosa Abrantes-Metz, and Albert Metz of Moody’s which suggested that the fixing process could be open to manipulation………………………………………..Full Article: Source

What America’s energy blunder means for oil

Posted on 30 April 2014 by VRS  |  Email |Print

Here’s a quiz for you. Can you name the top three countries by proven oil reserves? The top spot may surprise you. It’s Venezuela. The number two spot is more obvious. It’s Saudi Arabia. What about number three?
You won’t get this one. But don’t feel bad about it. The energy industry has gone through big changes in recent years, and even bigger changes are on the way… It may surprise you to know that the country with the third largest proven oil reserves is Canada. That’s an impressive feat for a country often disparaged as being the 51st US state, and for its people’s fondness for putting bacon on pancakes………………………………………..Full Article: Source

China has control of the gold price

Posted on 30 April 2014 by VRS  |  Email |Print

In addition to the latest excellent study of the Chinese gold market by the World Gold Council, we have received other reports on the Chinese gold market that differ with the conclusions drawn by the World Gold Council.
But we shouldn’t be surprised by this, not only because of the opaque nature of the Chinese gold market and the dearth of accurate statistics that are accessible. Which ones are right is critical for the conclusions each draw paint very different pictures of the future of the gold price………………………………………..Full Article: Source

Here’s why some of the world’s big banks are dumping their commodities desks

Posted on 29 April 2014 by VRS  |  Email |Print

A number of the world’s big banks have either dumped or downsized their commodities trading businesses because of falling returns. The latest, Barclays, announced last week it will stop the majority of its commodities activities as it ups its focus on electronic trading. The UK bank will continue to trade precious metals.
In March JPMorgan Chase sold off its commodities division to Swiss trading company Mercuria for $3.5 billion and has also retained precious metal trading activities………………………………………..Full Article: Source

Morgan Stanley on gold: Still dour after a nasty year

Posted on 29 April 2014 by VRS  |  Email |Print

The commodity strategists at Morgan Stanley write that record demand from China won’t be enough to keep gold’s price above $1,200 per ounce in the coming year, much less help it rise. On the contrary, the firm’s Joel Crane and six co-authors argue instance that weaker Chinese demand could the thing that causes prices to erode even more.
Here’s how that could happen: The weakening yuan. The Chinese currency’s downswing reduces the purchasing power of Chinese consumers, cutting down the amount of gold each yuan can buy………………………………………..Full Article: Source

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