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Australia’s tycoons suffer commodities hangover

Posted on 18 February 2015 by VRS  |  Email |Print

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

Will commodities be able to sustain their rally?

Posted on 16 February 2015 by VRS  |  Email |Print

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

Silver - The Best Precious Metal Investment For 2015

Posted on 16 February 2015 by VRS  |  Email |Print

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

Commodities are down-but hardly out

Posted on 13 February 2015 by VRS  |  Email |Print

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

Why Oil Prices Will Rebound Before We Know It

Posted on 12 February 2015 by VRS  |  Email |Print

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

Top oil analyst: The worst is yet to come

Posted on 12 February 2015 by VRS  |  Email |Print

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

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

Posted on 12 February 2015 by VRS  |  Email |Print

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

Silver and Gold Truth Versus Fiat Lies

Posted on 11 February 2015 by VRS  |  Email |Print

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

Gold rebounds amid demand for haven assets

Posted on 10 February 2015 by VRS  |  Email |Print

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

What price gold in an increasingly unreliable world?

Posted on 09 February 2015 by VRS  |  Email |Print

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

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

Posted on 06 February 2015 by VRS  |  Email |Print

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

Oil heading for $30, currency war coming: Analysts

Posted on 06 February 2015 by VRS  |  Email |Print

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

3 Factors That Drive Gold Prices

Posted on 06 February 2015 by VRS  |  Email |Print

Gold is something that fascinates us all at some level. Kings fought for it, explorers risked their lives for it and we’ve all been conditioned to believe it has an almost magical intrinsic value. (If you want to listen to a captivating story explaining why we value gold so much more than any of the other basic elements on the periodic table, check out the Planet Money podcast “Why Gold”.)
As traders and investment educators, our fascination with gold went beyond the element itself. It took us into the realms how traders view gold and what makes them buy it. This exploration led us to write a book for McGraw-Hill in 2011 entitled All About Investing in Gold — a must read, if we do say so ourselves………………………………………..Full Article: Source

My Gold Rush—Away From the Metal

Posted on 06 February 2015 by VRS  |  Email |Print

Last Thursday, gold futures had an electrifyingly bad day, losing 2.4% of their value, their worst performance in more than a year. This was after the Federal Reserve expressed optimism about the economy, indicating that rate increases were still in the offing. Both of these things are bad for gold.
All good news is bad for gold. Gold is a lustrous, highly malleable version of the Grinch. Why anyone would be surprised that gold tanked last week is beyond me. Gold is the world’s stupidest and most annoying metal. It has been disappointing people or getting them killed since the dawn of history………………………………………..Full Article: Source

Are commodities really bottoming out?

Posted on 04 February 2015 by VRS  |  Email |Print

The news on oil is still mostly bearish—BP announced a $3 billion cut in capital expenditures for 2015 on Tuesday—but analysts and strategists are again trying to call a bottom. Raymond James’ Jeff Saut told CNBC Monday that oil has indeed found a bottom.
This morning, following a disappointing earnings report from Anadarko Petroleum, Stifel upgraded the stock to a “buy” from “hold,” saying it expects oil prices to improve in the second half of the year. “We anticipate a rebound in oil prices as U.S. supply growth slows, demand improves, and the dollar potentially tops and begins to weaken over the next 12 to 18 months,” Stifel analysts wrote………………………………………..Full Article: Source

Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Posted on 30 January 2015 by VRS  |  Email |Print

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up.
It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist, explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist. Global crude oil production has only fallen in six years since 1984 and then generally as a result of geopolitical disruptions to supply or restraint by OPEC, rather than as a reaction to price………………………………………..Full Article: Source

Physical gold demand likely positive for price in 2015: GFMS

Posted on 30 January 2015 by VRS  |  Email |Print

Underlying physical demand is starting to pick up in 2015 and will “give the market longer-term ballast” although more headwinds remain before a return to a bull market, analytical company GFMS said Thursday. In conjunction with Thomson Reuters, GFMS said in its Gold Update 2 report that professional investors are absent as the dollar “remains king. Fresh professional investment is unlikely much before there is clarity on the Fed’s timing over rate hikes.”
Continued monetary easing in Europe, Japan and China will support the dollar in the medium term, pointing away from gold investment, “especially as US equities, on an historical multiple at least, are not over-extended.” It also cautioned that recent strength in the gold price, which has been as high as $1,307/oz so far in 2015, has been driven by short-covering, not fresh long positioning………………………………………..Full Article: Source

Is Aluminum the New Doctor Copper?

Posted on 30 January 2015 by VRS  |  Email |Print

When you’re ill, it often pays to get a second opinion. For many years now, investors have turned to ‘Doctor Copper’ for an indication as to the health of the global economy. The red metal is used in everything from construction to white goods to kitchenware, and so it’s seen as a pretty accurate indicator of economic health.
But some argue copper’s lost its mojo. According to Eugen Weinberg, head of commodity research at Commerzbank, all the red metal tells us about is the state of some large emerging markets, and, more specifically, China. It may even be in danger of going the way of the Baltic Freight Index – a previous barometer for trade activity based on transportation rates that has fallen out of favor (and was replaced by the Baltic Dry Index)………………………………………..Full Article: Source

Why Jim Rogers Is Wrong About Hot Commodities

Posted on 28 January 2015 by VRS  |  Email |Print

“If you’ve got young people who don’t know what to do, I’d urge them not to get MBAs, but to get agriculture degrees,” – Jim Rogers. “All your viewers who got MBAs made a terrible mistake; they should try to exchange them for farming degrees or mining degrees”. – Jim Rogers speaking to a Bloomberg anchor.
In 2004, Jim’s book Hot Commodities was published. In the book he focuses specifically on sugar and coffee due to favourable supply demand issues. Over the few years following publication both commodities rallied hard producing gains of 155% and 232% respectively………………………………………..Full Article: Source

Gold’s First Big Test In 2015

Posted on 26 January 2015 by VRS  |  Email |Print

Some of you might think that Gold has already passed its first big test in 2015 by price being up better than 9% in this young year, despite the Dollar’s rising as well. But regular readers know such positive correlation with the Buck is not a big deal for us, our having demonstrated time and again in these updates that Gold plays no currency favourites.
Moreover, last April we wrote a Gold Update similarly entitled “Gold’s First Big Test In 2014″: ’twas just before StateSide Tax Day, which a year prior in 2013 infamously marked the unrelenting unraveling of Gold’s price from the 1600s down into the 1100s in just over 11 weeks………………………………………..Full Article: Source

Best and worst commodities in 2014

Posted on 23 January 2015 by VRS  |  Email |Print

Commodities are hugely cyclical as is all too evident at the moment, with oil and metal prices in steep decline. A look at what did well in 2014 and what didn’t reveals how fortunes change and unearths a number of surprises. Website Visual Capitalist has run an infographic illustrating the annual returns for all commodities last year - the Periodic Table of Commodity Returns - with accompanying comment.
First, the two worst performers in 2014 were the two best performers the previous year: oil and natural gas. This speaks to the short-term volatility of commodities, as well to the fact that investors need to be looking to the long term. While something may swing up and down in a short time horizon, in the long term it may prove to fulfill the investment thesis based on supply and demand fundamentals……………………………………….Full Article: Source

Declining Commodity Prices Ahead With Weak Global Economy

Posted on 22 January 2015 by VRS  |  Email |Print

Oil may be holding above $40.00 per barrel, but investors shouldn’t get too comfortable. The chart foreshadows oil prices could falter and maybe even drop below $40.00. It’s true that speculation has influenced the direction of oil to some degree, but much of the negative sentiment has to do with a declining global economy that shows some despair.
And while gross domestic product (GDP) growth in the U.S. is pretty decent, what we are witnessing in the global economy cannot be saved by what is happening domestically. That suggests weaker oil prices ahead—along with weaker commodity prices overall………………………………………..Full Article: Source

Oil price drop is ‘economic warfare against US enemies’

Posted on 22 January 2015 by VRS  |  Email |Print

The current oil price decline can be explained by heavy selling in US future markets which is part of an all-out economic war between the US and countries like Russia, Iran and Venezuela, says financial journalist, Willem Middelkoop. The current price can only partially be explained by technical factors like growing US oil production which increased by a million barrels per day in the last year.
But I think it’s quite reasonable to expect that the price declines, which we’ve seen over the last few months, were also caused by heavy selling in the American future markets, and you could call that a form of economic warfare – it is an [all]-out economic war between the US and Russia now. If we see who has more problems [caused] by current oil – they are Russia, Iran, Venezuela – these countries can be seen as enemies of the US………………………………………..Full Article: Source

IMF lowers growth outlook for commodity exporters

Posted on 21 January 2015 by VRS  |  Email |Print

The International Monetary Fund (IMF) has lowered its 2015 growth forecasts for commodity exporters, including South Africa, saying the projected growth rebound for commodity-exporting developing countries will be weaker than had been forecast in the fund’s October World Economic Outlook (WEO).
The WEO Update, released on January 20, lowered South Africa’s 2015 gross domestic product (GDP) projection to 2.1% from 2.3% in October, which was in line with the IMF’s 2014 Article IV Staff Report on South Africa released in December. The fund decreased its 2016 GDP growth projection for South Africa by 0.3 of a percentage point to 2.5%………………………………………..Full Article: Source

Is the Oil Price Collapse Temporary?

Posted on 21 January 2015 by VRS  |  Email |Print

What can we expect from the oil price in next six months and beyond? And what impact does this have on the expectations for global growth. If the collapse of crude oil quotes was temporary, it would only add noise to the global economic landscape and, apart from fuelling volatility, would have no lasting consequences.
Yet, there are reasons to believe the fall is not temporary. As Saudi Arabia has made crystal-clear, its strategy is to preserve global market share, not support market prices. This is rational: back in the early 1980s, Saudi Arabia did the opposite, cutting production to support prices, thereby subsidising its competitors, especially outside OPEC. Only in late 1985 did Saudi Arabia reverse gears and double production to regain market power………………………………………..Full Article: Source

Tough Times Ahead For Commodities After Harsh Shakeout

Posted on 20 January 2015 by VRS  |  Email |Print

After one of the worst years in memory for commodity funds, even the few managers who found a way to make money last year say they expect a difficult start to 2015. Collapsing oil and grain prices caused havoc for commodity funds in 2014, with the average actively managed fund in the Lipper Global Commodity sector losing 14.35 percent. Big names abandoned the field altogether, and investors redeemed billions.
A handful of managers were nevertheless able to exploit the sudden mid-year surge in volatility and the fall in prices. But even they expect a difficult 2015 with pressure on prices to fall further………………………………………..Full Article: Source

Not your usual oil-price decline effect

Posted on 20 January 2015 by VRS  |  Email |Print

Yup. Analysts and economists still can’t decide whether the fall in oil prices is net positive or net negative for the global economy. Unfortunately for the net positive camp, it looks increasingly like global demand and growth figures are beginning to side with the negativity team.
Indeed, the longer the oil price stays low, the more it looks like global stimulus hopes were overdone due to poor understanding of financial feedback loops in the commodity space. So what’s behind the anomaly? How did a whole school of economists get this potentially so wrong?……………………………………….Full Article: Source

Drought, Floods and Cold Save a Few Commodities From Rout

Posted on 19 January 2015 by VRS  |  Email |Print

Commodity investors at least have the weather on their side. While most raw materials are mired in bear markets, from oil to nickel to corn, cold spells and droughts are fueling a few rallies. The promise of a deep freeze last week in the U.S. sent natural-gas futures to their biggest gain in 11 months. Dry weather in Brazil, the top grower of coffee and sugar cane, sparked advances for both crops. Unusually heavy monsoon rains in Malaysia sent palm oil to the highest since July.
“The weather is always unpredictable and a wild card,” Donald Selkin, the chief market strategist at New York-based National Securities Corp., which oversees $3 billion, said in a telephone interview Jan. 16. “These products are marching to their own tune — for now.”……………………………………….Full Article: Source

Latin America 2015 outlook darkens as commodities sink

Posted on 16 January 2015 by VRS  |  Email |Print

Latin America has embarked on a painfully long period of greater austerity, and lower commodity prices and economic growth will barely pick up speed this year, a Reuters poll found Thursday. With nose-diving oil and metal prices weighing on government finances and jeopardising investments, economists in the quarterly poll chopped 2015 growth forecasts again for the region’s seven largest countries, from Mexico to Argentina.
Brazil is now expected to grow a meager 0.5 percent in 2015, down from an estimate of 1.1 percent in the prior survey and barely up from an expected 0.2 percent growth in 2014………………………………………..Full Article: Source

Why 2015 will be the year for gold: Top analyst

Posted on 16 January 2015 by VRS  |  Email |Print

Suddenly, gold is getting its groove back. After two straight years of losses, gold is off to its best start to year since 2008. And, according to one well known analyst, 2015 could have gold bugs smiling.
Sterne Agee’s precious metals and mining analyst Michael Dudas said that gold should continue to benefit from central banks’ efforts to devalue their currencies. Gold prices rose more than 2 percent Thursday to a four-month high after the Swiss National Bank shocked the world and said it would abandon its euro currency peg. The precious metal is now up more than 6 percent year to date………………………………………..Full Article: Source

Has gold finally bottomed?

Posted on 16 January 2015 by VRS  |  Email |Print

As more and more of the market turns bullish on the metals, I think it may be time to be looking for a set up for lower lows within the next few weeks. I know that sounds quite counter-intuitive, but that is simply how markets — and especially metals — work.
In November, as the metals and mining stocks were bottoming, more and more articles were coming out about how it is time to sell metals. It was the column written by Howard Gold on Marketwatch, calling for the same, which prompted me to write my column at that time. However, unlike all the others being published at that time, I was looking to the long side………………………………………..Full Article: Source

Why commodities are taking a beating again

Posted on 15 January 2015 by VRS  |  Email |Print

Commodities took a beating Wednesday, as prices for everything from industrial metals to grains slid on global growth concerns. Copper, which is often seen as an important indicator of global growth because of its use in industry, fell as much as 5 percent on Wednesday.
A host of other commodities, including palladium, rice and oats, also saw multiple-percentage point drops on the day. Although separate factors weighed on each asset, some factors affected the international commodities market. That said, some expressed that the pain could soon be drawing to an end for traders………………………………………..Full Article: Source

Expect ‘a rough 6 months’ for commodities: Analyst

Posted on 15 January 2015 by VRS  |  Email |Print

Volatility in commodities will continue as long as Saudi Arabia’s next moves are unclear, RBC Capital Markets’ chief commodities strategist told CNBC on Wednesday. Meantime, Helima Croft said, she expects “a rough six months.”
In an interview on “Squawk on the Street” Croft said she thinks the Saudis will be prepared to keep prices down only for the next six months to “bleed out as much non-OPEC oil production as they can.” “We have a situation where the crown prince’s son is quite senior in the oil ministry, and there are some reports in The Wall Street Journal that he’s not entirely happy with the lower-for-longer strategy. So I think we should look if there is a shift in Saudi strategy,” Croft said……………………………………….Full Article: Source

Nichols: Gold price has cleared top two hurdles in 2015

Posted on 15 January 2015 by VRS  |  Email |Print

Gold on Wednesday continued its strong 2015 run with futures contracts on the New York Mercantile Exchange adding as much as $10 an ounce to change hands for $1,244 an ounce, the highest since October 22. Gold has now advanced nearly 5% so far this year and is up sharply from close to four-year lows of $1,143 hit early November.
Expert commentator and economist Jeffrey Nichols of American Precious Metals Advisors, argues in his latest missive titled Gold: Pregnant with Possibility on Wednesday that in 2015 gold will shake off three years of underperformance and continue its long term uptrend:……………………………………….Full Article: Source

Commodities Fall as Stockpiles Mount Up

Posted on 12 January 2015 by VRS  |  Email |Print

Two years ago, Daniel Nilsson ’s family bought a hotel in the town of Pajala, Sweden, some 50 miles above the Arctic Circle. The nearby Kaunisvaara iron-ore mine had just started production, and the Nilssons installed new meeting facilities and revamped the nightclub. “We wanted to give the locals and the people working in the mines a great hotel to come to,” said Mr. Nilsson, its 28-year-old manager. “That’s why we bought it—we saw a future for it.”
But the price of iron ore sank last year, and with it the Lapland River Hotel’s fortunes. In October, the mine’s owner, Northland Resources , stopped operations. Two months later, Northland filed for bankruptcy………………………………………..Full Article: Source

Commodities: Deflation And The Future

Posted on 12 January 2015 by VRS  |  Email |Print

The year 2014 was the worst year for commodities in the past five and one-half years… since 2008 in the Great Recession. Prospects for a recovery in commodities prices are not good: market expectations for inflation over the next ten years has dropped from 2.30 percent last January to 1.55 percent now.
Can economic growth be rising in an environment where commodity prices are falling? Earlier in the current economic recovery, commodities seemed to be the darling of investors because the policy of quantitative easing on the part of the Federal Reserve seemed to spur on dreams, in the short run, of a bubble in commodity prices………………………………………..Full Article: Source

Gold and Oil: Who’s going to bottom out soon?

Posted on 07 January 2015 by VRS  |  Email |Print

In recent days, I have encountered a few questions related to gold and whether it would be right time to invest. In November, we had expected an uptrend in gold in the beginning of New Year and now the break of $1200 resistance levels, analysts may be watching for the next breach at $1230, 1250 upto $1280 per ounce levels.
Time and again I have told that gold price in India is basically a function of global spot prices plus import duties and local taxes. Gold demand has been fairly inelastic in the country with higher prices only raising the urge to buy more so that they don’t end up buying at still higher prices………………………………………..Full Article: Source

If gold’s going to be a winner in 2015 then silver will be the real champion as financial markets implode

Posted on 07 January 2015 by VRS  |  Email |Print

Gold and silver prices have jumped since the start of 2015 as safe haven and dollar diversification plays. But this will be nothing compared to the upside gain to come as financial markets really lose it. Precious metal investors know from long experience that when gold prices go up silver does even better and vice-versa.
Silver is in a tighter market than gold and with a smaller available supply then a rise in demand has a disproportionate impact on its price. It’s also an alternative to gold as prices rise because it is cheaper. The gold-to-silver price ratio is historically very high at the moment at 75, so silver prices have plenty of room to outperform and close up this gap………………………………………..Full Article: Source

2 Reasons Why Silver Will Rebound in 2015

Posted on 06 January 2015 by VRS  |  Email |Print

According to the World Silver Institute 2013 silver demand outstripped supply and the institute expects this to occur again for 2014 and 2015. This is because of growing demand for using silver in a range of high-tech industrial applications including photo-voltaic cells, electronic touch screens, light emitting diodes, and interposers for the stacking of semi-conductor chips.
Over the last 100 years, the gold-to-silver ratio has on average required 47 ounces of silver to purchase one ounce of gold. But since the peak of the gold bull market in 2011 where only 44 ounces of silver was required, the ratio has widened to now need 75 ounces of silver to purchase one ounce of gold………………………………………..Full Article: Source

Commodity bear market over: Boockvar

Posted on 05 January 2015 by VRS  |  Email |Print

Be a contrarian this year; buy commodities and don’t pile on to the bullishness of the U.S. dollar, Peter Boockvar, chief market analyst at The Lindsey Group, told CNBC. That’s because he believes the commodity bear market that started in September 2011 when gold topped out is coming to an end.
“Oil is the last major commodity to really crash which tells me this is the end of the commodity bear market. Oil will be the last one to recover but gold, agriculture [and] industrial metals will be the first to recover,” Boockvar, also a CNBC contributor, said……………………………………….Full Article: Source

Known unknowns dim global market outlook

Posted on 05 January 2015 by VRS  |  Email |Print

When you see 2015 financial and commodity markets forecasts that list 10 reasons why those markets will collapse this year, or bring in talk of the Black Death as the most pertinent portent for what is now occurring, it’s probably wise to resist the temptation to stick one’s neck out.
So let us remain content with listing all the known unknowns. First, though, that Black Death thing: with the news that yields on German bonds actually went negative last week, and eurozone governments can now borrow at less that 1 per cent, one commentator argued nothing of this low yield/low interest rate magnitude had been experienced since the 14th century, when England defaulted on Italian loans and the Black Death carried off at least 25 million people………………………………………..Full Article: Source

Commodity supply, global growth outlook & US dollar to continue to play dominant roles in 2015

Posted on 02 January 2015 by VRS  |  Email |Print

In the third quarter of 2014, commodity price weakness was one of the most dominant themes in financial markets. Most commodities we track were not able to withstand this strong down trend. Oil prices dropped because of ample supply, political factors, concerns about the demand outlook and a higher US dollar. Precious metals were also hit hard. Silver was the worst performing precious metal, while gold was the best performing one, while still losing 8%.
Base metals, except nickel, did relatively well, because of a lower sensitivity to the US dollar and a less substantial supply overhang. Commodity supply, the global growth outlook and the US dollar, will continue to play dominant roles in the first quarter of 2015. Oversupply will remain a challenge for energy markets. This will continue to depress oil prices in 2015, in our view………………………………………..Full Article: Source

Gold retains position as safe haven for 2015

Posted on 02 January 2015 by VRS  |  Email |Print

The metal is the only store of wealth that has a proven track record over thousands of years, and experts predict prices to remain at $1,200 in the year ahead. Gold has retained its place as a safe-haven investment in 2014, despite the rising strength of the US dollar and turmoil elsewhere in commodity markets.
The price has remained stable and what’s more, experts believe that the long- term outlook for the precious metal is well supported over the coming year.. The price of gold looks set to end the year almost unchanged on 12 months, closing last week at around $1,175 (£755) an ounce after starting the year at $1,205. Fears of a crash in the price were overblown………………………………………..Full Article: Source

Gartman: If you buy one thing in 2015, buy this

Posted on 02 January 2015 by VRS  |  Email |Print

It’s hard out there being a commodities king this year. Oil got crushed. Copper was obliterated. And soybeans got mashed. But Dennis Gartman has his eye on one commodity that met a particularly cruel fate in 2014: Gold
Despite bullion being just pennies away from posting its first back-to-back yearly loss since 1997, the self-proclaimed commodities king and author of the eponymous Gartman Letter told CNBC.com’s “Futures Now” on Tuesday that he sees gold enjoying a solid 2015. “My better trade for the year will be the same trade that has been the better one for this year and the better one for the previous year, which is to be an owner of gold,” said Gartman………………………………………..Full Article: Source

Credit Suisse: Gold Looks Likely to Fall in 2015

Posted on 23 December 2014 by VRS  |  Email |Print

Credit Suisse is bearish on gold headed into the new year, and one of the firm’s trading strategists recommends options on the SPDR Gold Shares (GLD) to capture additional prices declines.
Victor Lin on Credit Suisse’s trading strategy team recently noted the firm’s bearish outlook on gold in 2015. Their dim view on the yellow metal is premised in part on the potential for the Federal Reserve to raise interest rates, which could makes holding gold less appealing relative to bonds:……………………………………….Full Article: Source

Why Opec is increasingly irrelevant

Posted on 18 December 2014 by VRS  |  Email |Print

Ali al-Naimi, Saudi Arabia’s oil minister, expects the oil market ‘to stabilise itself eventually’. When the Saudis, the leaders of Opec, decided at the cartel’s recent meeting in Vienna to maintain their oil production levels, it sent a strong message to the world: the market, not Opec, should decide oil prices. As a result, oil prices dropped, falling below $60 per barrel this week.
This is a big change for the world’s largest oil exporter, which has in the past attempted to manage the global oil markets by altering production levels. The Kingdom essentially decided to pursue a policy that not only preserves its market share in the long term but also heralds the coming end of Opec as a united organisation that still has a collective say in export decisions…………………………………….Full Article: Source

Silver Prices to Outperform Gold in 2015

Posted on 18 December 2014 by VRS  |  Email |Print

I know it’s a bold prediction: silver prices are going to surprise investors and provide them with better returns than gold bullion. I say this because both the fundamental and the technical pictures for silver continue to improve. The supply of silver produced continues to dwindle, while demand for the metal is robust. This is the perfect recipe for higher prices.
In Canada, a major gold-producing country, in the first nine months of 2014, mines produced 373,828 kilograms of silver. In the first nine months of 2013, Canadian miners produced 510,390 kilograms of silver—representing a 26% decline in silver mine production…………………………………….Full Article: Source

Get Ready for Gold Prices to Break Out

Posted on 17 December 2014 by VRS  |  Email |Print

Gold is unquestionably the most frustrating trade I’ve ever tried to make in 20 years of investing. The main problem is there is simply no way to predict gold prices or even attempt to ballpark where gold prices might go in any given time period. Gold prices are subject to so many crosscurrents that trying to trade the yellow metal has always flummoxed me.
About the only thing you can count on with respect to gold prices are a few indicators that might give you a leg up in trading. We may have confirmation of direction from those indicators in the next few days. You just need to decide if you want to go long, go short or stay away from gold altogether. I suspect that whichever way gold breaks, it is likely to be for a significant time period……………………………………..Full Article: Source

Gold and Silver Outlook for 2015

Posted on 17 December 2014 by VRS  |  Email |Print

In the past 12 months, gold has traded as high as around $1,380 an ounce and as low as about $1,140 an ounce. From its starting point at around $1,220, though, the change is just $10 an ounce at the current price around $1,210. Since June, when oil prices started falling and the dollar began strengthening, gold has lost about $100 an ounce.
Silver is down about $5 an ounce, from around $21 to around $16 since June. From their June prices, then, gold is down about 8% and silver is down about 25%. The story is significantly different for gold and silver mining companies. Rising mining costs and low prices have plagued the miners for more than two years, and share prices have dropped by 50% to 75% over that time for the firms we are looking at now…………………………………….Full Article: Source

Predicting The Oil Price: Smart Vs Lucky

Posted on 16 December 2014 by VRS  |  Email |Print

Paul Krugman made the point recently that the only stock market forecasters who correctly predicted a market drop were those who always predicted falling markets. This is known as the ‘stopped watch’ approach to forecasting: constantly make one prediction and eventually the market will move in that direction.
Especially for oil prices, which are highly variable, this works wonders to the point where the great Adam Sieminski often joked that you should predict the price or the date, but not both………………………………………Full Article: Source

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