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Commodities Briefing - Category | Commentaries more

BP’s chief economist sees U.S. shale weathering oil surplus

Posted on 01 July 2015 by VRS  |  Email |Print

Shale output in the United States will prove resilient to low oil prices likely to be prolonged by the prospect of half a million barrels per day of Iranian crude making its way back to the market, BP’s chief economist said on Tuesday.
Talks in Vienna between world powers trying to end sanctions on Tehran in return for limits on Iran’s most sensitive nuclear activities could bring a significant increase in Iranian oil exports. BP’s Spencer Dale, however, told Reuters that it would probably take time for any easing of sanctions to filter through to oil markets if an Iran deal is agreed………………………………………..Full Article: Source

All Signs Point To Higher Gold Prices

Posted on 01 July 2015 by VRS  |  Email |Print

In the face of historic monetary stimulus from nearly every major central bank in the world over the past few years, an investment in gold would have seemed to be a “no-brainer.” Yet the precious metal’s price, around $1,178 per ounce, has barely budged. Now may be the time to give gold a fresh look. Fundamental drivers appear in place for long-term upside, and technical support could provide a near-term catalyst.
Moreover, shares of gold mining companies are selling at steep discounts to historical multiples and the slightest hint of stabilization could bring investors back in a big way. A confirmation of fundamentals for gold prices would send gold mining shares soaring………………………………………..Full Article: Source

China targets counterweight in gold trade with yuan fix

Posted on 01 July 2015 by VRS  |  Email |Print

A decade after China kicked off a series of gold market reforms, plans to establish a yuan price fix mark one of Beijing’s biggest step so far to capitalise on the country’s position as the world’s top producer and a leading consumer.
While no immediate threat to the gold pricing dominance of London and New York, the benchmark could ultimately give Asia more power over bullion trade, particularly if the yuan becomes fully convertible, industry sources say. The yuan fix is due to launch by the end of 2015 via the Shanghai Gold Exchange (SGE), which last year allowed foreign players to trade gold using offshore yuan………………………………………..Full Article: Source

Commodities Drop as Greek Turmoil Spurs Concern Demand Will Wane

Posted on 30 June 2015 by VRS  |  Email |Print

Commodities fell the most in a week on concern that Greece’s deepening financial crisis will threaten global economic growth and demand for energy and metals. The Bloomberg Commodity Index of 22 raw materials lost as much as 0.9 percent, the most since June 19. Energy products and industrial metals led declines, with crude oil dropping to a three-week low and nickel slumping to the lowest since 2009.
Greece shut its banks and imposed capital controls in a bid to avert the collapse of its financial system, increasing the risk that it will be forced out of the euro. After failing to reach a deal with creditors, the country will vote in a July 5 referendum on proposals needed to restore bailout aid………………………………………..Full Article: Source

Gold price suggests investors not betting on Grexit

Posted on 30 June 2015 by VRS  |  Email |Print

Ultimate safe-haven asset fades after brief rally, as investors dismiss possibility of Greek exit from eurozone. A gold rush has failed to materialise as Greece edges closer to total financial collapse, suggesting investors aren’t betting on an imminent ‘Grexit’.
A brief rally in the precious metal in early trading faded towards the close in London, as investors discounted the possibility of Greece exiting the currency bloc, despite the government’s shut-down of the country’s banks and stock market. Gold – which is traditionally seen by markets as the ultimate safe-haven asset – initially gained 2.5pc, but by the afternoon in London it had fallen back to a level of $1,176 per ounce………………………………………..Full Article: Source

Jim Rogers Gold Correction Forecast

Posted on 30 June 2015 by VRS  |  Email |Print

A Jim Rogers gold prediction is taken seriously by investors. And today (Friday) we got a fresh Jim Rogers gold prediction courtesy of a MarketWatch interview. “Gold is in a correction, and the correction has gone on for four years,” Rogers said.
“Although I am not buying gold, I am expecting an opportunity to buy gold sometime in the next year or two. For instance, if gold goes under $1,000, I hope I’m smart enough to buy a lot more gold.” When Jim Rogers speaks, he is taken seriously by investors – and for good reason………………………………………..Full Article: Source

How Asia avoided a commodity crisis

Posted on 29 June 2015 by VRS  |  Email |Print

Edmund Harriss, manager of the Guinness Asian Equity Income fund, says Asian countries have proved resilient to recent financial and commodity crises by becoming integrated manufacturing hubs that are not dependent on commodities
The BRIC economies have been a popular investment concept, but the economies of Brazil and Russia have proved too dependent on commodities. This was to their advantage as prices rose, especially during the China investment boom, but as this slowed, falling commodity prices left their economies cruelly exposed. Both notably failed to broaden their industrial bases in the good times. Their currencies have now weakened and both are struggling with recession and inflation………………………………………..Full Article: Source

One of Indonesia’s Richest Men Is Bullish on Commodity Processing

Posted on 29 June 2015 by VRS  |  Email |Print

As the head of one of Indonesia’s largest investment companies, Peter Sondakh knows to follow market trends. It’s the reason he took up smoking cigars last year, he says, beneath the whir of air purifiers in his office. It’s also, he says, partly why he’s selling off stakes in his palm oil plantation – Indonesia’s third largest – in the hope of moving toward processing, refining and trading at a time when slumping commodity prices and weakened demand for raw materials from China have dented the economy.
“I pride myself in adding value,” said Mr. Sondakh, whose PT Rajawali Corp. is one of Indonesia’s biggest conglomerates with investments in mining, property, plantations and media. “Added value products will have more profit.”……………………………………….Full Article: Source

Here’s why gold will rally: RBC’s Gero

Posted on 26 June 2015 by VRS  |  Email |Print

Gold is in the midst of its longest losing streak since March, but one noted gold bug claims the selling could soon abate. “I’m probably one of the few people that believe there are too many bears in the woods,” metals strategist George Gero said.”
Gold closed Thursday’s session at $1,172.20 an ounce, its lowest level since June 5, but despite the selloff, Gero insists the precious metal is oversold. Gero attributed gold’s recent demise to a healthy stock market, strong dollar, uncertainty over a Fed rate hike and unrest in Greece………………………………………..Full Article: Source

Gold Market Suppression: An Investor’s Perspective

Posted on 26 June 2015 by VRS  |  Email |Print

Gold price suppression results from central bankers’ desire to keep interest rates low. I provide an overview of the gold price suppression thesis as a statistical certainty and as continuous with post Bretton Woods history. While the topic of gold price suppression is commonly written about investment implications are rarely discussed.
We want to emphasize well run, low opex miners as positioned to withstand price weakness and to leverage price strength. The potential for a rapid revaluation of gold makes companies with low valuation to gold reserves ratios attractive as high risk/high reward speculation stocks………………………………………..Full Article: Source

Oil At $60: How Marginal Producers Cope Will Shape Market Direction

Posted on 24 June 2015 by VRS  |  Email |Print

As we approach the midway point of the current trading year, it has become apparent that oil benchmarks would find it hard to escape the $50-$75 per barrel range for the rest of the year, and much of 2016. Macroeconomics of the day also does not point to a dip below $50 barring the occurrence of an unforeseen financial tsunami.
As most producers are looking at non-OECD markets to export to, and demand there is holding up, if not firing on all cylinders, a steep price drop is highly unlikely. Atop the much asserted claim of too much oil coming on the market – in the region of 1.1 to 1.3 million barrels per day (bpd) by some accounts – each time there is minor uptick in price, a swift downward correction follows suit. Trading in recent weeks offers ample proof of this………………………………………..Full Article: Source

Is Gold Actually Just Another Commodity?

Posted on 24 June 2015 by VRS  |  Email |Print

Gold is widely viewed as among the best hedges against inflation. It rose dramatically from $287 an ounce on September 11, 2001 to a record high of $1,895 during September 6, 2011. It’s down 37% since then. Gold bugs figured that the war on terror would widen government deficits and that central banks would help by keeping credit conditions loose.
The financial crisis of 2008 unleashed the major central banks to experiment with various forms of ultra-easy monetary policy including NZIRP and QE. Yet inflation remained subdued. The price of gold seemed to break when gold bugs were disappointed by the metal’s failure to rally on Abenomics, specifically the latest round of extremely easy money from the BOJ. So they started to sell………………………………………..Full Article: Source

Gold Still Hasn’t Found the Right Level for Investors, Trader Says

Posted on 24 June 2015 by VRS  |  Email |Print

Gold bulls had a rough start to the week as the yellow metal has been selling off due to the strength of the U.S. dollar and signs that Greece is nearing a deal with creditors. For most of 2015, gold has been trading in a range around $1,200, struggling to find conviction to the upside or downside as fundamentals are trumped by speculation of an interest-rate hike and Greece’s ability to pay debt.
It has mostly been more of a technical trade. Commodities are priced in U.S. dollars, so as the greenback moves higher, instruments like oil and gold generally move lower, and the inverse applies due to the strong correlation in the moves. Commodities move on other fundamentals such as supply and demand in addition to the U.S. dollar………………………………………..Full Article: Source

Do not see oil prices going beyond $80-85: CEA Arvind Subramanian

Posted on 23 June 2015 by VRS  |  Email |Print

Chief Economic Advisor Arvind Subramanian today said he does not see oil prices going beyond 80 to 85 dollars, a price which will help India manage its macro economy reasonably.
“… yes oil prices could go up, but given the fundamental changes (in the market), the likelihood of it (oil price) going up to anywhere beyond 80 or 85 dollars I (think) relatively (should be) ignored and as long as oil prices stay, don’t go beyond that I think we can manage our macro economy reasonably,” he said………………………………………..Full Article: Source

New Gold Forecast Shows Bullish News for Prices

Posted on 22 June 2015 by VRS  |  Email |Print

Our gold forecast for the rest of 2015 shows three big factors affecting the direction of the yellow metal. First, let’s look at where gold prices are now. After hitting a four-week high Thursday, the gold price paused in early trading Friday. At last check, the yellow metal was up $0.80 at $1,202.80 an ounce.
After trading as high as $1,207.00 an ounce, gold ended Thursday’s U.S. session up $24.50, or 2.08%, at $1,201.40. Thursday’s gain in the gold price put the precious metal back in positive territory for the year. The yellow metal is up 1.5% year to date………………………………………..Full Article: Source

Gold is surely headed to $25,000, but maybe not until next century

Posted on 18 June 2015 by VRS  |  Email |Print

Gold most definitely is headed to $25,000 an ounce. The question is when? How about 103 years — not until 2118, in other words? Peculiar as that sounds, it actually rests on a strong historical foundation: You just need to assume that gold over the (very) long term will maintain its purchasing power against inflation (which it has over past centuries), and that inflation in the future will be 3% a year (its U.S. average over the past century).
Do you think inflation will be higher than 3% per year? Be my guest — see what you come up with. The table below shows, for each of several possible inflation rates, how many years it would take for gold to reach $25,000………………………………………..Full Article: Source

5 little-known facts about commodities

Posted on 17 June 2015 by VRS  |  Email |Print

Regardless of what you think about commodities futures, you’re probably wrong. That’s because commodities are one of the most misunderstood asset classes in the entire investment arena. And that’s really saying something, since there is considerable misunderstanding about other asset classes as well.
One reason there’s been so much misunderstanding about commodities futures is that, until now, long-term historical data were unavailable. So analysts were largely shooting in the dark when trying to draw statistically robust conclusions about those contracts’ behavior………………………………………..Full Article: Source

The future of Greece and gold

Posted on 16 June 2015 by VRS  |  Email |Print

What are the possible scenarios for Greece and what do they imply for the gold market? The base-case scenario is that a bailout deal will be reached in coming days since no one wants the Grexit. Without the agreement, Greece would lose access to its external funding (like current bailouts funds, Eurozone’s crisis fund, IMF’s support or ECB’s Emergency Liquidity Assistance), whilst creditors risk Greece’s default, financial contagion and the loss of the euro’s prestige.
However, both sides took tough positions, since Syriza does not want to disappoint its voters and does not believe in austerity policy, especially during recession, while creditors believe that the Eurozone is immune to possible Grexit………………………………………..Full Article: Source

Hank Paulson says China risks ‘real damage’ to economy

Posted on 15 June 2015 by VRS  |  Email |Print

The Chinese government risks “real damage” to the economy if it does not hasten reform of China’s state-owned enterprises and overhaul a debt-fuelled growth model, Hank Paulson has warned. For more than two decades the former US Treasury secretary and Goldman Sachs chief has worked closely with pivotal Chinese political figures such as Wang Qishan, currently head of the Chinese Communist party’s anti-graft bureau, and visits Beijing frequently.
“Until the state-owned enterprises are put on a level and competitive playing field, it’s going to be difficult to have the marketplace work efficiently in some key sectors of the economy,” Mr Paulson told the Financial Times during a visit to the Chinese capital. “Reform of the SOEs has been moving too slowly.”……………………………………….Full Article: Source

Climate change: the challenge for Australia

Posted on 15 June 2015 by VRS  |  Email |Print

I once called climate change policy diabolical, but with a saving grace. It is diabolical because of the overlapping of four complex issues. While there is high scientific confidence that human action causes warming and that, beyond some limit, warming damages many aspects of human life, perhaps catastrophically, there is uncertainty about the precise consequences.
The costs of effective action come now and the benefits much later. Avoidance of dangerous outcomes requires parallel action in all of the larger countries. And effective action is politically difficult because it confronts the interests of large corporations that are accustomed to investing heavily to bend policy to their own ends. When I first started working on the issue eight years ago, I said it might be too difficult for our political system at this early stage of our development………………………………………..Full Article: Source

Is Silver the New Gold?

Posted on 10 June 2015 by VRS  |  Email |Print

For hundreds of years, even after the abolishment of the gold standard, gold has played a vital role in the global economy. Gold has represented stability, and even though it does not pay interest or dividends. Not only does it provide a perceived safe haven for investments, but also gains from the price of gold over the past 20 years have been rather appealing.
The price of gold has almost doubled from $589 to $1176 per ounce, and an investment of $10,000 in February 1995 would result in $20,000 in value at present. Thus investors may question whether it is possible to find a substitute for gold, an asset that provides a hedge against inflation, and with a negative correlation to a traditional portfolio, whilst remaining an asset, preserving its purchasing power………………………………………..Full Article: Source

Is Gold Finally Scraping Bottom?

Posted on 08 June 2015 by VRS  |  Email |Print

The main reason for gold to rally will be investment demand and not demand for jewelry. Not since 2012 have we seen inflows in gold ETFs, a sign that a bottom in gold might be forming. If investment demand for gold follows through the next several months, both gold and gold stocks will likely rally.
I have been a bear on gold and gold stocks for a long time now. In fact very close to gold’s top. Most people think that the spot price of gold is a function of jewelry demand. As such, they look at what the demand from India and China is, thinking this will provide them with insight for gold demand. I have new for you folks, the determining factor that drives gold’s price is not jewelry demand, but investment demand………………………………………..Full Article: Source

The next great bull market: Gold $25,000

Posted on 05 June 2015 by VRS  |  Email |Print

Suppose someone approached you in the year 2000, when the price of gold was around $250 an ounce and suggested that it would be worth almost eight times its current value within the next decade. I am sure most people would have thought that person to be less than credible making such an outrageous market call. Think about it.
An asset being expected to multiply by eightfold within a decade? But as we all know now, gold went from $250 an ounce to just over $1,900 an ounce in just that amount of time. What if I was to tell you that gold could make another such run over the next decade plus? Does it seem that outrageous now? Well, I think the math shows it can and will, with the price of gold futures surpassing $25,000, and more specifically for this column, the price on the Gold Bug Index HUI, -1.35% eclipsing 15,000. But let’s take a look back before we go forward………………………………………..Full Article: Source

Gold wilts on upbeat US data

Posted on 05 June 2015 by VRS  |  Email |Print

Gold eased on Thursday after robust economic data fuelled speculation a US rate hike may come sooner rather than later and on cautious hopes for a resolution to the Greek debt crisis, though the euro’s surge underpinned prices.
Traders are now focusing their attention on Friday’s US non-farm payrolls data, a key barometer of the world’s largest economy, for clues on the next direction of gold. Spot gold was down 0.2 percent at $1,183.00 an ounce at 09h32 GMT, while US gold futures for June delivery were down $2.20 an ounce at $1,182.70………………………………………..Full Article: Source

What’s ahead for copper, coal, iron ore and China according to Joy Global

Posted on 05 June 2015 by VRS  |  Email |Print

“While global economic growth improved through the first four months of the calendar year, other economic and commodity indicators painted a mixed picture about the strength of end markets,” wrote Joy Global. Chinese growth cooled to 7.0 percent, which is the lowest level in six years. China has implemented significant monetary stimulus efforts in the form of reductions in both the reserve requirement ratio and lending rates over the last several months.
Although global growth is still expected to be just over 3 percent this year supporting demand for mined commodities, there are several macroeconomic pressures that could increase and materially impact the growth profile………………………………………..Full Article: Source

Commodities’ glut to drag on, BHP chief warns

Posted on 04 June 2015 by VRS  |  Email |Print

Oversupply of many commodities is likely to be prolonged, the chief executive of the world’s most valuable mining company has warned in a stark assessment of the gloomy outlook for the industry.
BHP Billiton’s Andrew Mackenzie said miners were facing a “changed environment” because of slower economic growth in China, by far the largest user of most important commodities, and said falling prices were having a “major impact on all companies in our sector”………………………………………..Full Article: Source

Commodities: Ag Can Make You Gag

Posted on 04 June 2015 by VRS  |  Email |Print

There are certain stories in this business I refer to as “rubber chickens,” after the vaudeville adage that a comedian could always get a laugh with a rubber chicken. One of my favorites is dumping all over the idea that there are things out there called “commodities” that will protect you, the reader/consumer/trader/investor/voter/taxpayer, against the ravages of the inflation your non-elected central bank is trying to push higher.
Let’s take agricultural commodities. The Bloomberg agricultural total return index, which is composed of futures contracts on coffee, corn, cotton, soybeans, soybean oil, sugar and wheat, has lost 28.39% on a trailing one-year basis. This decline has not been confined to a single commodity, but rather has been distributed across all index components………………………………………..Full Article: Source

All You Know About Gold’s Safe Haven Appeal Is Wrong - UBS

Posted on 04 June 2015 by VRS  |  Email |Print

In a note to clients today, UBS dissected the traditional market view on Gold’s safe haven appeal noticing a big change in the dynamics and correlations constituting this special status of the yellow metal.
“Gold has traditionally been considered a safe haven, an asset that investors turn to in times of uncertainty. Indeed, history has shown that gold is well-positioned to benefit in scenarios when risks are elevated. But the dynamics have clearly shifted over the last several years and gold’s reaction function to risk-off scenarios is no longer the same as it was in previous decades,” notes UBS………………………………………..Full Article: Source

Here’s What the Next Gold Bull Market Will Look Like

Posted on 03 June 2015 by VRS  |  Email |Print

We measured every bull cycle of gold stocks and found there have been eight distinct upcycles since 1975. We also discovered something exciting: Only one was less than a double. (A second was 99.9%.) Even more enticing is that the biggest one—a 601.5% advance in the early 2000s—occurred just after a prolonged bear market.
And our current bear market is longer than that one. To get a sense for the potential upside, we applied the percentage gain from each of those upcycles to our recommended BIG GOLD picks………………………………………..Full Article: Source

Here’s The Reason Gold Is Going Nowhere

Posted on 02 June 2015 by VRS  |  Email |Print

Another week passes and once again, the word best used to describe the price action in gold is, “YAWN”. As in boring; as in repetitive, as in comatose, as in going nowhere. “Gold is off to $2000″, we were confidently told. Yep – same claim as always, every single time gold has a big move higher with the same result… NADA… ZERO… ZILCH…
What a great racket – get people to pay you for making wild, outlandish, incorrect and thoroughly useless predictions and then blame it all on “price suppression by the feds” when the prediction falls flat on its face. Those doing this never have to acknowledge how bumbling and inept they are around the markets while they sucker in another round of victims from whom they can milk more money………………………………..Full Article: Source

China gold demand holding up well – new record ahead?

Posted on 02 June 2015 by VRS  |  Email |Print

We keep seeing reports in the mainstream media suggesting that Chinese gold demand is slipping away, but continuing strong gold withdrawal figures from the Shanghai Gold Exchange (SGE) seem to contradict these reports. While, as we have reported before, there are many doubts expressed as to whether SGE withdrawals are actually equivalent to Chinese consumer demand, there is no doubt that they do represent the underlying consumption situation.
Hong Kong-based Philip Klapwijk, the former executive chairman of GFMS prior to its acquisition by Thomson Reuters, did explain some of the discrepancies between the mainstream analysts’ Chinese consumption figures and SGE withdrawals (which differed last year by around 1,000 tonnes) as unrecorded cross border gold movement from mainland China into Hong Kong (technically illegal) in a presentation to the Bloomberg Precious Metals Forum a week ago ……………………………….Full Article: Source

Gold’s Two Fundamental Drivers and The Odds Of A Breakout

Posted on 02 June 2015 by VRS  |  Email |Print

For some reason, gold evokes more intense emotions for traders than any other financial instrument. Depending on who you talk to, gold is either the last real store of value amidst the final throes of the central bank driven fiat currency system…or a soft yellow rock with few industrial uses. Rather than dogmatically holding to either a permanently bullish or bearish outlook on any financial asset, we believe that traders that should keep an open mind and try to objectively analyze the fundamental drivers of gold.
Like any commodity, the price gold is determined by the interaction of supply and demand. While the supply of gold is relatively predictable in the short term, the demand for gold is rarely the conventional type of industrial demand that drives most commodities. Instead, gold demand is driven primarily by its attractiveness as an investment, which is in turn driven by real interest rates and the value of the US dollar………………………………..Full Article: Source

Gold Has Two Major Hurdles to Overcome

Posted on 28 May 2015 by VRS  |  Email |Print

Gold has 2 major hurdles to overcome and they are as follows: 1. Interest rate rises in the US. 2. Money printing by other nations, Japan, UK, Europe, etc. Both support the US$ and put downward pressure on gold. The specter of interest rate increases in the US hangs over the precious metals sector like the Sword of Damocles.
The Federal Reserve has stated that they want to ‘normalize’ rates now that the period of Quantitative Easing is over. Employment figures published by the Department of Labour have shown a steady increase in the number of jobs created over the last twelve months or so. On the inflation front; core prices, which exclude food and energy rose at a yearly pace of 1.8% for the month of April, which is the fastest monthly rise for almost a year……………………………………Full Article: Source

When Is the Best Time to Buy Gold?

Posted on 27 May 2015 by VRS  |  Email |Print

Call it superstitious, call it good marketing, or call it tradition, writes Adrian Ash at BullionVault. But where India has Akshaya Tritiya in spring and Diwali in autumn, China then has Lunar New Year – the most ‘auspicious’ time of year for people to buy gold.
The best time for gold traders, however, is different. And it may be due in some part to those same religious and astrological dates observed by gold buyers in Asia. “Sell in May, come back on St.Leger’s Day,” claims stockbroking lore in the City of London. That old chestnut basically tells clients and staff to take a long summer vacation, starting with the Whitsun Bank Holiday and returning after the year’s last big horse-race meeting. Wouldn’t want to disturb your broker from studying the form, after all…………………………………..Full Article: Source

Should you be investing in gold right now?

Posted on 26 May 2015 by VRS  |  Email |Print

Is this the best time to stay invested in gold? Gold, which neared the keenly-watched $1,400 (Dh5,138) an ounce in 2014, had been an investor’s darling, but the yellow metal has mostly been curtailed in a range so far in 2015. But analysts are painting a bearish picture on gold over the short to medium term.
On Thursday, international spot gold traded at $1,200 an ounce level, after having traded in range of $1,163-$1,306.2 so far in 2015. Gold moved around $1,200 an ounce as bullish catalysts, such as signs of faster inflation, were offset by speculation the Federal Reserve will soon raise interest rates. While the weaker dollar usually draws buyers to gold, there’s also less demand for haven assets with equities near all-time highs………………………………………..Full Article: Source

Why the Economist is wrong on gold

Posted on 26 May 2015 by VRS  |  Email |Print

When reading the financial press, the amount of coverage one sees on the topic of precious metals, is almost nonexistent. Most pundits don’t care for the metal, nor do they understand it. In fact, former Federal Reserve Chairman Ben Bernanke told Congress that he doesn’t understand gold. Yet, when you read articles on gold from media pundits, all one hears is negativity about why you shouldn’t invest in the yellow metal.
The best example of this is a recent article I read in the Economist. It is called, Russia is buying gold, but few others are. This article claims that despite the low interest rate, easy money environment, combined with the fact that half the gold mining companies are generating negative cash flows, gold is still stuck at a stagnate price of $1200 per ounce. The economist claims, that this is due to the fact that no one is buying the yellow metal, except for Russia………………………………………..Full Article: Source

Gold Forecast: Likely Going Higher

Posted on 22 May 2015 by VRS  |  Email |Print

The action in the gold futures market (June 15) suggest that the metal will more than likely rise from here. During the session on Wednesday, we had the FOMC meeting minutes released, and they suggested that a June interest rate hike is very unlikely out of the Federal Reserve. This of course will build a bit of a case for owning gold, as the US dollar will more than likely struggle.
However, we didn’t necessarily think there was an imminent hike coming, and I think that the market in general was already looking at that possibility. It is because of this that we are looking for a gradual gain in the gold market, not some kind of “melt up.” The candle from the Wednesday session also makes a case for buying as far as we can see………………………………………..Full Article: Source

HSBC bullish over gold

Posted on 21 May 2015 by VRS  |  Email |Print

The U.S. economy hasn’t completely recovered from its last recession – what some have called the biggest since the Great Depression – but another one could be just around the corner, according to one economist.
In an opinion piece in the Financial Times, Monday, HSBC chief economist Stephen King said that historical trends shows that recessions hit every eight or nine years and the last one in the U.S. ended six years ago. If history is any indication, the U.S. could be facing another recession in the next three years. What’s worse, he said, is that policy makers don’t appear to have the ammunition needed to fight another one………………………………………..Full Article: Source

History Shows A Gold Bull Market Is Fast Approaching

Posted on 20 May 2015 by VRS  |  Email |Print

Yearning for sunnier skies for your gold investments? How’s this sound…Gold in a decisive bull market, with the price steadily rising. Silver soaring and outpacing gold’s gains. Gold stocks rocking, erasing underwater positions and racking up the profits.
That’s not pie in the sky wishful thinking—it accurately describes the next stage of the gold market, something that will soon visit your portfolio. With the price of gold currently stuck in place, like a stain on the front of your best shirt, and the stocks only teasing us like Lucy holding the football for Charlie Brown, how can I be so sure?……………………………………….Full Article: Source

Gold is now more important than ever

Posted on 19 May 2015 by VRS  |  Email |Print

The race by the world’s central banks to debase their currencies means holding gold bullion is vitally important in the current environment, according to star manager Sebastian Lyon, chief executive at Troy Asset Management.
Lyon, who heads up the highly popular Troy Trojan fund and Personal Assets Trust, recently told FE Trustnet that investors face the “particularly unpleasant” combination of very low returns and high volatility as years of extraordinary central bank monetary policy have left nearly all assets classes expensive and therefore highly correlated………………………………………..Full Article: Source

Will the Gold and Silver Surge Continue?

Posted on 19 May 2015 by VRS  |  Email |Print

Gold started off 2015 with a bang as safe haven buying mainly due to an increase in currency volatility, uncertainly over Greece’s future in the euro zone and expected quantitative easing in Europe. However, the gains fizzled out as gold prices again dropped on strong U.S jobs. Following which, gold prices fell to new six-week lows as equities recovered on hopes that Greece would work out a deal with its creditors.
The demand for yellow metal returned at the start of the second quarter on disappointing economic data. The weaker dollar and geopolitical tensions emanating from the Saudi Arabia-led coalition’s attack on Houthi rebels helped the price of gold move up. Again, early this month, rate hike expectations had dragged the gold price to a six-week low………………………………………..Full Article: Source

Weak dollar boosts bullion

Posted on 18 May 2015 by VRS  |  Email |Print

Gold prices could move higher as the greenback remains under pressure. It was a spectacular week for the yellow metal. Global spot gold price witnessed a sharp 3 per cent rally in the past week, its biggest since January. It went on to close on a strong note above the psychological $1,200 per ounce mark at $1,224.
Among the other precious metals, silver price rallied 6.3 per cent to close at $17.5 per ounce and platinum was up 2.3 per cent and has closed at $1,168 per ounce………………………………………..Full Article: Source

Will Oil’s Price Surge Continue? Don’t Bet on It

Posted on 15 May 2015 by VRS  |  Email |Print

The recent weakening of the US dollar and building of speculative long positions by hedge funds and other investors resulted in significant support for many commodities, except for precious metals. Because the fundamentals have not changed, and the situation of oil oversupply lingers on, we see downside risks to oil prices
The support for those commodities was driven by hopes of economic recovery (which would lead to increased demand) as well as fear of supply disruptions. The weakening of the US dollar was the result of disappointing US data, in combination with fears of delayed Fed action…………………………………..Full Article: Source

Oil Prices Will Find It Very Difficult To Go Over $70-75 In The Next 2 Years

Posted on 15 May 2015 by VRS  |  Email |Print

Crude oil has seen a massive recovery from mid-$40 levels just two months ago to above $60 where it is trading now. While some are bullish that this move will continue and prices will continue to move upwards till $100, Oppenheimer Energy analyst Fadel Gheit thinks that’s unlikely.
“We see oil prices moving higher,” Gheit said. “But we are not likely to see a repeat of the recovery that we have seen over the last eight weeks. Eight weeks ago oil prices were $44, today oil prices are around $60. We think that oil prices will start moving up again, but probably at much slower pace. I still believe that oil prices will probably try to seek an equilibrium really round $60 to $65.” ………………………………….Full Article: Source

Global Gold Market Remains Steady In Q1 2015 Demonstrating The Unique Diversity Of Gold Demand

Posted on 15 May 2015 by VRS  |  Email |Print

The first three months of 2015 saw stable gold demand, according to the latest Gold Demands Trends report from the World Gold Council. Total demand for Q1 2015 was 1,079 tonnes (t), down just 1% on the same period last year.
Conditions differed from market to market, but at an aggregate level, these differences broadly balanced each other out. Once again, consumers in Eastern countries dominated the market with China and India alone accounting for 54% of total global consumer demand in the quarter…………………………………..Full Article: Source

The Next Gold Bull Market Starts Before October

Posted on 15 May 2015 by VRS  |  Email |Print

At an International Monetary Fund (IMF) forum last month, China’s central bank governor, Zhou Xiaochuan, made it clear he believes the renminbi is “ready for reserve status.” It would be a huge step for the Chinese currency, starting with the fact that it would be added to the basket of currencies IMF member countries can include in their official reserves. Billions would be invested in it.
What was the IMF’s reaction? “We welcome and share this objective,” said IMF Managing Director Christine Lagarde. “We are now working closely with the Chinese authorities in this regard,” added Director of Communications Gerry Rice. They didn’t say they would accept it, but then again, they surely wouldn’t advertise it in advance…………………………………..Full Article: Source

7 Common Misconceptions About Gold

Posted on 14 May 2015 by VRS  |  Email |Print

Gold is perhaps one of the most misunderstood physical assets out there. Below are seven common misconceptions we gathered about gold. 1. The United States Dollar is backed by gold. The U.S. dollar was backed by gold for some time, but is not anymore. After President William McKinley signed the Gold Standard Act in 1900, the U.S. went on a gold standard in which one dollar was convertible to 1.5 g (23.22 grains) of gold.
In early 1933, President Franklin D. Roosevelt suspended the gold standard with the exception of foreign exchange. In 1971, in the most well-known of the “Nixon Shock” series of actions, President Richard Nixon severed all ties between the U.S. dollar and gold, effectively abolishing the gold standard…………………………………….Full Article: Source

Gartman: Forget OPEC, here’s why I’m getting long oil

Posted on 13 May 2015 by VRS  |  Email |Print

OPEC’s latest warning that crude could stay below $100 a barrel for the next decade wasn’t enough to keep Dennis Gartman on the sidelines in the oil market. To the contrary, the founder of “The Gartman Letter” said that he’s now bullish on crude oil for the first time “in a very, very long while.”
The Organization of the Petroleum Exporting Countries said in a draft of its latest strategy report that it doesn’t expect crude to trade consistently above $100 per barrel in the next decade, according to the Wall Street Journal. The draft reportedly forecasted crude trading at around $76 per barrel in 2025, and also modeled scenarios where crude would trade below $40 per barrel in 2025………………………………………..Full Article: Source

What’s Next for the Gold Price?

Posted on 13 May 2015 by VRS  |  Email |Print

Will gold zoom higher with Greece on the brink of default? Or will it crash as the Fed pursues an “exit?” Why has gold not rallied with the recent retreat of the dollar? To understand where gold may be heading, keep in mind that this shiny metal isn’t changing; it’s the world around it that is. We contemplate why investors may want to hold gold as part of their portfolio.
In today’s world where the utterance of a pundit may move markets, it may be helpful to go back to basics to allow investors to make up their own mind as to what drives markets and what may be a good investment. As such, gold is simply a precious metal, a rare, naturally occurring chemical element that tends to be less reactive than most elements………………………………………..Full Article: Source

Big banks flag dangers of financial bubble in oil and commodities

Posted on 12 May 2015 by VRS  |  Email |Print

Barclays warns that the latest commodity boomlet has charged ahead of economic reality across the world: ‘Watch out: this rally may not last’. The big global banks have begun to warn clients that the blistering rally in oil and industrial commodities in recent weeks has run far ahead of economic reality, raising the risk of a fresh slump in prices over the summer.
Barclays, Morgan Stanley and Deutsche Bank have all issued reports advising investors to tread carefully as energy and base metals fall prey to unstable speculative flows in the derivatives markets………………………………………..Full Article: Source

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