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Is Bitcoin Becoming More Stable Than Gold?

Posted on 20 April 2016 by VRS  |  Email |Print

The last 24 days mark the longest period in which bitcoin prices have been less volatile than gold prices. Digital gold is starting to look slightly more stable than its physical counterpart.
Since its inception several years ago, bitcoin has seen wild prices swings as advocates have tried to establish the nascent technology as a widely-used digital currency. But for the past three weeks, the price volatility of bitcoin has remained below or equal to that of safe-haven gold, according to data analysis from FactSet and CoinDesk………………………………………..Full Article: Source

Gold’s best forecasters see rally resuming as confidence returns

Posted on 20 April 2016 by VRS  |  Email |Print

Gold, one of this year’s best performing assets, has room to extend its advance, according to top-ranked forecasters, even as the rebound shows signs of losing steam. Capital Economics Ltd. and Cantor Fitzgerald LP are bullish as real interest rates will probably stay low even if the Federal Reserve raises borrowing costs in response to higher inflation.
Bullion may surge to $1,350 an ounce by the year-end, says Simona Gambarini, an economist at Capital Economics in London. The metal will continue to climb, though at a slower pace, says Rob Chang at Cantor Fitzgerald in Toronto. Gold traded at $1,235 on Monday………………………………………..Full Article: Source

Citigroup says commodities rout is finally over

Posted on 19 April 2016 by VRS  |  Email |Print

Citigroup has called an end to the commodities rout which has sent shockwaves through the global economy, and pummelled the balance sheets of mining giants. “There is growing evidence that virtually all commodities have stared at a price bottom and are groping for a return to normal,” Citigroup analysts wrote in a note.
They said a lot of this will depend on the growth prospects of China, which is the world’s biggest consumer of raw materials. While the end of the year looks “constructive”, they flagged significant obstacles on its road to recovery………………………………………..Full Article: Source

The Gold Bear Market Is Over; Prices to Hit $1,350 in Q4

Posted on 19 April 2016 by VRS  |  Email |Print

The gold bear market is all over, this according to one well-known metals research firm. Speaking with Kitco News on Monday, Phil Newman, co-founder of the London-based firm Metals Focus also added that he sees improving prices throughout the year.
‘[L]ike many other people we see the bear market as over. Prices will continue to improve over 2016 and beyond this year,’ he said. Newman, a longtime gold forecaster, added that short-term, gold could weaken due to the uncertainty surrounding the rate hikes of the Federal Reserve………………………………………..Full Article: Source

G20 worried by ‘modest’ global growth, commodities weakness

Posted on 18 April 2016 by VRS  |  Email |Print

Financial leaders from the Group of 20 nations said on Friday they were heartened by a recent recovery in financial markets, but warned that global growth was “modest and uneven” and threatened by weakness in commodities-based economies.
In a communique issued after their meeting in Washington, G20 finance ministers and central bank governors repeated their pledge to refrain from competitive currency devaluations, but offered no new initiatives to keep growth from stalling. The G20 officials took a slightly more positive view on financial markets, which they said had mostly recovered from sharp selloffs earlier this year and were in better shape since they last met in Shanghai in February………………………………………..Full Article: Source

OPEC Talks a Good Game

Posted on 15 April 2016 by VRS  |  Email |Print

Perception is reality. That is how Qatar’s Minister of Energy could have kicked off the letter inviting his Norwegian counterpart to the upcoming freeze-fest in Doha, which Bloomberg published on Thursday. In the letter, the minister claimed that mere talk of a freeze had “changed the sentiment of the oil market.”
He’s right. Brent crude has rallied by almost 40 percent since the idea of an output freeze first surfaced in February. Despite very mixed signals about it from Saudi Arabia, Iran and others, this has been enough to scare the short-sellers straight………………………………………..Full Article: Source

UBS: Gold-Investment Demand Offsetting Soft Physical Market

Posted on 15 April 2016 by VRS  |  Email |Print

Investment demand for gold is more than offsetting weakness in the physical market, thereby driving prices higher so far this year, says UBS. “Many are becoming increasingly convinced about gold’s strength and believe that the market has entered a new phase,” UBS says, noting it has a “constructive” view on the metal.
“Those who are looking for higher gold prices argue that low/negative interest rate environments, deteriorating confidence (in) central banks and the effectiveness of monetary policy, currency depreciation and downside risks to equities markets should all make a case for more upside.”……………………………………….Full Article: Source

Finally, It’s Silver’s Time to Outshine Gold

Posted on 15 April 2016 by VRS  |  Email |Print

After falling short of gold’s performance every year since 2012, silver is finally pushing ahead to post the biggest rally among precious metals this year.
While both benefit from mounting speculation that the Federal Reserve will be slow to increase interest rates, the white metal, which also has industrial uses, is gaining an added boost from signs of stabilization in China’s economy and the resilience of the U.S. expansion. In the spot market, an ounce of gold buys 75.96 ounces of silver, the least since December………………………………………..Full Article: Source

Gold resurgence: who’s buying gold and why

Posted on 14 April 2016 by VRS  |  Email |Print

After four years of sharp falls, a sudden revival has been taking place in the gold market. In the first three months of 2016 the price of the yellow metal soared by 20pc - its best quarterly performance since the financial crisis erupted in the final three months of 2008.
The gold price, currently around $1,260 an ounce, is well below its record peak of almost $1,900 achieved in July 2011, at the height of the European sovereign debt crisis………………………………………..Full Article: Source

Buy Gold – Advises HSBC

Posted on 14 April 2016 by VRS  |  Email |Print

Sentiment towards gold is slowly moving from being extremely negative and bearish to more bullish. HSBC joins a long list of large banks, insurers and investment houses who are now bullish on gold.
HSBC, JP Morgan Chase, Bank of America Merrill Lynch, ABN Amro, UBS, Deutsche Bank, PIMCO and BlackRock head a growing number of investment houses that are recommending an allocation to gold today. Indeed, the world’s largest reinsurer Munich Re is buying gold………………………………………..Full Article: Source

HSBC Looks For Gold/Silver Ratio To Continue Narrowing

Posted on 14 April 2016 by VRS  |  Email |Print

HSBC looks for the gold/silver ratio to narrow further, which would mean silver is outperforming. The ratio measures how many ounces of silver it takes to buy an ounce of gold.
Comex May silver rose Tuesday even as June gold eased slightly, and silver has posted a smaller percentage decline so far Wednesday. “We believe that retail demand for coins and small bars and light institutional buying in the paper markets has boosted silver,” HSBC says in a late-Tuesday research note………………………………………..Full Article: Source

You can now be positive on commodities, and that’s a big change: Russell

Posted on 13 April 2016 by VRS  |  Email |Print

It would be easy to dismiss the assertion by BHP Billiton Chief Executive Andrew Mackenzie that commodity prices have bottomed as the wishful thinking of a mining executive keen to see some improvement in profit margins.
While it’s likely that the boss of the world’s biggest mining company is hoping for an end to five years of a declining price trend for many of the commodities his company produces, there is enough price evidence to suggest he may be right. It’s probably a little too early to call for a rebound in commodity prices, and Mackenzie was suitably cautious in his comments published last weekend in The Australian newspaper………………………………………..Full Article: Source

China: Total Collapse In The Price Of Gold

Posted on 13 April 2016 by VRS  |  Email |Print

The Chinese economy is showing serious signs of stress, this is resulting in reduced demand for all commodities including gold. China is the worlds top gold consumer, if this country enters recession it will drag gold down with it. This is further support for my assertion that recession and deflation are bearish for gold.
To understand the role of gold in the economy you must understand China. The country is not only the biggest consumer of the precious metal, but the worlds biggest producer as well. The Chinese economy is showing serious signs of stress and its overheated markets show the tell-tale signs of speculative bubbles - slowdown in growth is inevitable………………………………………..Full Article: Source

Expert sees gold price crossing $3,000 in 3 years

Posted on 12 April 2016 by VRS  |  Email |Print

The price of gold could go up above $3,000 per troy ounce in three years, a precious metals expert said on Monday. Speaking at the Dubai Precious Metals Conference, Dr. Diego Parrilla, co-author of ‘The Energy World is Flat,’ said “a perfect storm for gold is brewing” as central banks have reached the point of no return.
“Central banks continue to push and test the limits of monetary policy, credit markets, and fiat currencies, which could result in gold prices above $3,000/oz within 3 years,” said Parrilla………………………………………..Full Article: Source

Why Some Investors Are Hot on Gold

Posted on 12 April 2016 by VRS  |  Email |Print

Some investors most likely entered a panic mode at the very beginning of 2016. With growing uneasiness in the Chinese markets, money was withdrawn from China. Also, equity markets went tumbling with the oil market rout. Currencies were vulnerable, and one option where investors could park their money was precious metals. Gold has surged a whopping 16% on a year-to-date basis. Silver followed gold, rising 9.3% on the same basis.
Changes in gold and other precious metals have been largely dependent on the US dollar in 2016. The US dollar eased 3.8% on a year-to-date basis as speculation of an interest rate hike continued. Weakness in the US dollar often gives some breathing room to US-dollar-denominated assets………………………………………..Full Article: Source

Commodities rally: False dawn or new beginning?

Posted on 11 April 2016 by VRS  |  Email |Print

After a turbulent start to the year, Asian equities have made a comeback. This optimism can be credited to fading risks of a sharp Chinese yuan depreciation, US recession, and weakening regional currencies. But the most surprising development in a month of reversals has been the commodities rally, which has helped drive Asian equities up about 16 per cent since its January lows.
Commodity prices have roared to life after four years in the doldrums. Gold climbed 19 per cent to reach its recent peak and outperformed all other asset classes this year. Oil prices hit a three-month high in March. Industrial metals, led by iron ore prices - up nearly 45 per cent from last December’s low - have rallied as well. Some believe the storm has passed, pointing to an unexpected surge in Chinese construction activity as evidence for a sustained commodities rebound………………………………………..Full Article: Source

Opec’s days as economic force are ‘over’

Posted on 11 April 2016 by VRS  |  Email |Print

‘The era of Opec as a decisive force in the world economy is over’ argues Daniel Yergin. Opec’s economic power is broken, says the unofficial historian of the oil industry, who has argued that the association of oil exporting countries has become irretrievably divided and is unable to reverse the current slump in crude prices.
Daniel Yergin, whose Pulitzer-prize winning book The Prize provides a comprehensive history of oil and power, said he believes the association’s economic prowess has been undone by its inability to agree on how to stop the oil crisis.Yergin, who is also vice-chairman of data provider IHS, said the recent disagreements among Opec members have revealed how weak the organisation now is………………………………………..Full Article: Source

Why Changes to London Gold Fix Could Send Gold to $5,000

Posted on 11 April 2016 by VRS  |  Email |Print

The gold price death spiral between 2011 and 2015 left a lot of analysts puzzled. Money poured out of precious metals and into stocks, driving gold prices into a deep slump. Now, an overhaul at the London Gold Fix could help reverse the tide, drawing in institutional investors and sending gold prices to levels we’ve never seen before.
But before we get to that, let’s quickly review what happened between 2011 and 2015. Precious metals fell as a group during that time, but the gold price slump was particularly strange in light of economic uncertainty around the world………………………………………..Full Article: Source

Can Silver Keep Pace With Gold?

Posted on 08 April 2016 by VRS  |  Email |Print

Gold’s surprising strength in price is capturing headlines, but another precious metal, silver, is chasing gold’s coattails – without the fanfare. Silver futures are up about 8.5 percent this year, making it stand out among other commodities and financial markets.
Investors snapped up coins, with U.S. Mint data showing March silver coin sales were up 17 percent over the previous year’s figure. Inflows into silver-backed exchange-traded funds witnessed their highest monthly inflow since December 2010, according to Commerzbank………………………………………..Full Article: Source

Where to Search for Chinese Commodity Demand

Posted on 07 April 2016 by VRS  |  Email |Print

Commodity salesmen used to have a simple pitch: “China hasn’t fully urbanized.” But when asked Wednesday why he is hopeful about China’s long term when its underlying steel demand is contracting, Australian iron-ore miner Fortescue’s chief executive Nev Power led with a different reason. “China has been able to supplement domestic demand with very strong exports,” he said.
In 2015, China’s steel exports jumped 20% from the year before. Exports equated to 14% of China’s crude steel production. But this hardly seems like a sturdy source of demand. Trade politics could slow Chinese steel exports………………………………………..Full Article: Source

Big Trouble Ahead For Copper Is Good For Silver Prices

Posted on 07 April 2016 by VRS  |  Email |Print

It looks there may be trouble ahead for copper. This goes well beyond the falling copper price and annual surpluses. Chinese investors have been buying copper to finance trades. Thus, they have been warehousing one heck of a lot of copper to finance these trades This has kept demand artificially higher, causing mining companies to add more copper production.
Why is this good for silver? As global base metal supply, especially copper, starts to decline, it will drastically impact global silver mine supply. Again, 55% of world silver mine supply comes from copper, zinc and lead production………………………………………..Full Article: Source

Why Goldman’s commodity chief wants investors to bet against gold

Posted on 06 April 2016 by VRS  |  Email |Print

Gold futures have been among the best performers this year. But that hasn’t stopped Goldman Sachs’ head of commodities, Jeff Currie, from recommending that investors bet against the yellow metal. “Short gold! Sell gold!” That was Currie’s unabashed advice during a CNBC interview Tuesday after discussing the outlook for crude-oil futures.
Currie’s rationale is fairly straightforward: The closely followed Goldman strategist sees the Federal Reserve raising benchmark interest rates at some point in 2016 and believes the result of higher rates will be a drag on the dollar-denominated precious metal………………………………………..Full Article: Source

Is gold steadying itself for a major bull run?

Posted on 05 April 2016 by VRS  |  Email |Print

Investors have the opportunity to make significant returns on gold shares, many of which still have a long way to go before reaching pre-bear market levels, according to Paul Burton, mining research analyst at QuotedData.
The gold price (in terms of the London pm fix price) reached US$1,277.50/oz on 7 March, a rise of 18% since the start of the year. After softening over the following week or so, the price climbed back to levels approaching the high for the year in the wake of the US Federal Reserve’s Open Market Committee meeting, when it became clear major interest rate hikes are not on the cards this year………………………………………..Full Article: Source

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

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