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Oil Rebound Has Citigroup Seeing Worst Over for Commodities

Posted on 25 May 2016 by VRS  |  Email |Print

The commodities market has turned a corner and prices are unlikely to return to lows seen in the first quarter, according to Citigroup Inc., which boosted forecasts from metals to grains amid an oil-led recovery.
The bottom was likely hit earlier this year when weak fundamentals across all commodities were reinforced by selling after the collapse of China’s equity markets, Citigroup analysts including Ed Morse wrote in a report Tuesday. The bank is now predicting Brent oil will climb to $50 a barrel in the third quarter, earlier than its previous forecast for the fourth quarter, while increasing its year-end gold estimate by $100 an ounce to $1,250………………………………………..Full Article: Source

Oil will soon stage a ‘fundamental price recovery’: Analyst

Posted on 24 May 2016 by VRS  |  Email |Print

Supply outages and growing demand from China mean crude prices will come into “much better balance” in the next few months, an energy analyst told CNBC. Jefferies’ Jason Gammel told CNBC on Monday the oil market had swung from oversupply to undersupply in April thanks to disruptions in production in Nigeria and Alberta, Canada, taking around 2 million barrels per day out of the market.
“I think with continued demand growth over the course of this year and continued declines in non-OPEC supply that we are already seeing in places like the United States, the market actually comes into much better balance by the end of the third quarter and that’s the stage for fundamental price recovery,” he told CNBC television in London………………………………………..Full Article: Source

India Inc Modified?

Posted on 23 May 2016 by VRS  |  Email |Print

While the Modi government had its hits and misses, India Inc has found the going quite tough over the last two years. This was mainly due to several external factors. One, slowing global growth resulted in exports consistently trending lower. This impacted sectors such as information technology, pharmaceuticals and auto and auto component makers.
Two, global overcapacity and slowing imports from China made commodities dive sharply. The Thomson Reuters core commodity index that tracks the movement of major commodities is down 40 per cent since Modi took charge. Crude oil has been at the epicentre of this commodity meltdown, losing around 55 per cent. Three, new investments in the country slowed down due to over-leveraged balance sheets of companies in the power, steel and infrastructure sectors and over-capacity in some sectors………………………………………..Full Article: Source

Global Economy to Slow in 2016 Amid Commodity Price Slump

Posted on 20 May 2016 by VRS  |  Email |Print

The Moody’s Investors Service international credit rating agency has forecast diminishing global growth in 2016, citing the slump in commodity prices and weaker emerging market performance as the main causes of the slowdown. The G20 emerging markets’ growth will amount to 4.2 percent in 2016, down from 4.4 percent last year, while G20 developed countries are expected to grow 1.7 percent, down from last year’s 1.9 percent, the agency said.
“The global recovery has weakened further and the outlook across countries remains uneven and largely weaker than in the previous two decades. Global trade remains subdued, while spillovers from emerging markets shocks to financial markets globally have increased substantially,” Moody’s Associate Managing Director Elena Duggar said………………………………………..Full Article: Source

Commodity Cycles 1970-2016: Characteristics Of A Bull Market

Posted on 20 May 2016 by VRS  |  Email |Print

Commodities as an asset class experienced the 5th year of a severe bear market. But despite the performance of gold and crude, broad commodity markets didn’t attract investors’ favor. The key question investors are demanding to be answered is: which set of factors is needed to initiate a new commodity bull market in which commodity prices are not rising by 10-15% but offer the potential to double.
Commodity markets in 2016 started the year on the wrong foot. Bloomberg Commodity Index, the benchmark for the performance of oil, gas, metals and agriculture, plummeted to a staggering 72 index points on the 29th of January, which was the lowest point witnessed since 1991………………………………………..Full Article: Source

Oil prices have probably bottomed: Woodside

Posted on 20 May 2016 by VRS  |  Email |Print

Woodside Petroleum chief Peter Coleman says oil prices have probably bottomed and are likely to firm, but he doesn’t think a strong rebound is on the cards, warning prices will remain “rangebound” as gains inspire more production.
Coleman is fronting investors in Sydney this morning in the company’s annual investor briefing day. “We think there will be a firming over the next 18 months,” Mr Coleman said. “We’re not going to see any real increase in prices … but we’ve probably bottomed out in a range.”……………………………………….Full Article: Source

Positive on precious metals, see gold at $1370 by 2017 end: ABN

Posted on 20 May 2016 by VRS  |  Email |Print

Financial markets had not anticipated a rate hike in June and the US dollar has moved high while some of the commodity prices have been under pressure on the back of this news, says Georgette Boele of ABN AMRO Group.
Global equity and commodity indices witnessed volatile trade today after US Federal Reserve officials hinted at a possible rate hike in June if economic growth and other data signals continue to strengthen in the second quarter. Financial markets had not anticipated a rate hike in June and the US dollar inched higher while some commodity prices have been under pressure on the back of this news, says Georgette Boele of ABN AMRO Group………………………………………..Full Article: Source

Goldman Singles Out Zinc as ‘Bullish Exception’ Among Metals

Posted on 20 May 2016 by VRS  |  Email |Print

Zinc stands alone, according to Goldman Sachs Group Inc. The New York-based bank has raised its forecasts for the next year on tightening supply and robust demand in China, highlighting its positive prospects in contrast to the “very bearish” outlook seen for all other base metals.
The six and 12-month forecasts were boosted to $2,100 a metric ton from $1,700, while the three-month call rose to $2,000 from $1,800, analysts including Max Layton said in a May 19 report. Zinc for three-month delivery was at $1,868 a ton on the London Metal Exchange on Thursday………………………………………..Full Article: Source

Why the Outlook for Emerging Markets Is Improving

Posted on 20 May 2016 by VRS  |  Email |Print

After suffering one of their worst performances in years during 2015, emerging markets are rebounding in 2016. Using the MSCI Emerging Markets index as a benchmark, emerging markets gained nearly 9 percent in the last three months, rising high enough to wipe out a shaky start to the year. Year-to-date, the index is up about 1.58 percent – a huge improvement after last year’s 21.6 percent drop.
Revived commodity markets, particularly stronger crude oil values, are helping emerging markets overall heal, market watchers say. Higher commodity prices are an important factor for emerging countries as many of them produce and export natural resources. Much of 2015’s weakness in emerging markets came on the back of disintegrating commodity prices………………………………………..Full Article: Source

Commodities indebted to the past

Posted on 19 May 2016 by VRS  |  Email |Print

Commodity prices have been on a tear of late. Last year’s dogs, such as oil and iron ore, have soared. With oil approaching $50 a barrel this week, Goldman Sachs has turned more bullish on its prospects, and Chinese speculators have pushed up the price of iron ore by as much as 50 per cent.
This rebound has led to strong gains in related stock market sectors. Energy and mining share indices have risen fastest, after trailing the entire market in 2015. What has lured in the buyers? For one thing, some very depressed valuations made the decision to dive back into commodity stocks a lot easier………………………………………..Full Article: Source

Goldman Sachs Upgrades Commodities

Posted on 19 May 2016 by VRS  |  Email |Print

Goldman Sachs downgraded equities to “neutral” over a 12-month time-frame on growth and valuation concerns, but upgraded commodities to “neutral” on a three-month basis saying there was less downside potential to oil prices.
Goldman Sachs said commodities had rallied on the back of a dovish U.S Federal Reserve, Chinese economic data and supply disruptions. It upgraded commodities, saying that such supply disruptions should support oil prices………………………………………..Full Article: Source

Gold’s Glow Could Continue To $2,000 - Gerald Celente

Posted on 19 May 2016 by VRS  |  Email |Print

Gold continues to shine, up some 20% year-to-date, and one famed trends forecaster remains positive on the metal. “We maintain our forecast that should gold stabilize above $1,400 per ounce, we anticipate a sharp gold spike toward $2,000,” says Gerald Celente in a research note Wednesday.
”With gold demand up some 21 percent this year, according to the World Gold Council, and gold prices up over 20 percent since the start of the year, even the banksters see gold glowing.” After hitting $1,300 an ounce earlier this month, gold futures have struggled to breach above that level with June gold last trading at $1,274 an ounce, down $2.90 on the day………………………………………..Full Article: Source

Goldman cuts 2017 oil price forecasts, raises short term view

Posted on 17 May 2016 by VRS  |  Email |Print

Goldman Sachs says “the oil market has gone from nearing storage saturation to being in deficit much earlier than we expected and we are pulling forward our price forecast, with second quarter/second half of 2016 WTI now $45/bbl and $50/bbl.”
Goldman says forecasts a more gradual decline in inventories in second half than previously and a return into surplus in first quarter 2017, with low-cost production continuing to grow in the new oil order. Goldman Sachs says lowering its 2017 forecast from $57.5/bbl to $52.5/bbl, with a first quarter 2017 decline back to $45/bbl and a recovery to $60/bbl by fourth quarter 2017………………………………………..Full Article: Source

OPEC report predicts oil-price rise

Posted on 16 May 2016 by VRS  |  Email |Print

According to OPEC, prices are set to surge due to high exploration costs, while population and economic growth will also result in a spike in demand for oil A recent report released by the Organization of the Petroleum Exporting Countries (OPEC) has predicted that oil prices are set to recover to $70 a barrel by 2020.
Brent crude oil prices have fallen from more than $110 a barrel in 2014 to less than $28 a barrel in January 2016 (the lowest since 2004) due to oversupply and slowing demand………………………………………..Full Article: Source

Goldman Sachs increases its gold price forward estimates

Posted on 16 May 2016 by VRS  |  Email |Print

Goldman Sachs has consistently predicted the price of gold is going lower. Last week, the broker raised its price target on the precious metal to trade at an average of US$1,200 per ounce in three months, up from its previous forecast of US$1,100 an ounce.
Looking further ahead, the broker now forecasts US$1,180 an ounce in six months (from US$1,050 an ounce), and then US$1,150 an ounce in 12 months’ time (from US$1,000 an ounce). Gold is up 20% so far in 2016………………………………………..Full Article: Source

Oil is not out of the woods yet: BNP Paribas commodities chief

Posted on 13 May 2016 by VRS  |  Email |Print

Recent downgrades to global economic growth forecasts suggest the crude market is not out of the danger zone, Harry Tchilinguirian, global head of commodity markets strategy BNP Paribas, said Thursday.
In its latest oil market report released Thursday, the International Energy Agency said a rebalancing of supply and demand is becoming evident. However, crude stockpiles remain “enormous” and would need time to fall, Neil Atkinson, head of oil industry and markets at the IEA, told CNBC Europe………………………………………..Full Article: Source

Oil Prices Rise After IEA Report

Posted on 13 May 2016 by VRS  |  Email |Print

U.S. oil prices rose to a fresh six-month high in topsy-turvy action with traders divided about whether the oil market is balancing faster than expected or on its way to another major retreat. A report from the International Energy Agency was the one clear new catalyst in the market Thursday, but even it drew mixed interpretations.
The Paris-based agency said global oil stocks will experience a “dramatic reduction” in the second half of the year, but also warned that they will continue to increase in the first half of the year as Iran ramps up its production, adding to the nearly two years of oversupply………………………………………..Full Article: Source

Gold price rally in Q1 best in 30 years: WGC

Posted on 13 May 2016 by VRS  |  Email |Print

The enthusiasm with which investors renewed their appetite for gold ETFs in Q1 saw prices of the yellow metal (in US dollar terms) rally 17 per cent in in the first quarter of calendar year 2016 (CY16), says the latest World Gold Council report. Gold closed the quarter at $1,237/oz, 17 per cent above the end-2015 price of $1,060/oz.
Gold demand, on the other hand, grew 21 per cent to 1,289.8 tonnes - the strongest Q1 on record. Inflow into gold exchange traded funds (ETFs) at 363.7 tonnes in the first quarter of calendar year 2016 (CY16) also hit a seven-year high………………………………………..Full Article: Source

Commodities Increased in April due to Positive Fundamental Factors

Posted on 12 May 2016 by VRS  |  Email |Print

Commodities increased in April, driven by positive supply factors and macroeconomic events, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was positive for the month, with 18 out of 22 Index constituents posting gains.
Credit Suisse Asset Management observed the following: Energy was the best performing sector, up 13.43%, led by Brent and WTI Crude Oil. Precious Metals gained 7.26%, led by Silver, amid a weakening U.S. Dollar after the U.S. Federal Reserve left interest rates unchanged. Industrial Metals increased 7.18%, led by Nickel. Agriculture gained 7.03%, led by Soybean Meal, as excessive heavy rains in Argentina caused the harvest to be significantly delayed, reducing the production outlook for soybean meal and soybeans. (Press Release)

Goldman Expects Gold to Drop 10%–And That’s More Optimistic Than Its Last Call

Posted on 12 May 2016 by VRS  |  Email |Print

Goldman Sachs Group is warming to gold. A bit. For some time Goldman has been one of the biggest bears on the yellow metal, but a surge in its price coupled with more supportive macro factors has softened its tone.
As recently as March, Goldman had a 12-month target of $1,000 a troy ounce for gold, despite its impressive 16% rally in the first quarter that sent the price soaring above $1,200. The bank put the rally down to short-term geopolitical risks and an excessive belief in the weakness of the U.S. economy………………………………………..Full Article: Source

Gold has entered a new bull market: JPMorgan

Posted on 12 May 2016 by VRS  |  Email |Print

Gold prices are surging this year, and that has one of Wall Street’s largest banks flocking to the yellow metal. “We’re recommending our clients to position for a new and very long bull market for gold,” JPMorgan Private Bank’s Solita Marcelli said Tuesday on CNBC’s “Futures Now.”
After seeing three back-to-back years of losses, the precious metal has rallied 20 percent in 2016. And that’s just the start of the next leg higher, according to Marcelli. “$1,400 is very much in the cards this year.”……………………………………….Full Article: Source

The Cold, Hard Facts Raining on China’s Commodity Parade

Posted on 10 May 2016 by VRS  |  Email |Print

There’s nothing like facts to get in the way of a good yarn. Prices of everything from steel rebar to cotton are extending losses in China as a slew of bearish data hastens the reversal of a rally last month triggered by speculation that economic stimulus and industrial reforms would drive up demand and curb supplies.
Steel futures in Shanghai fell the most since trading began in 2009 after inventories rose while iron ore in Dalian sank as much as 7.1 percent, extending its retreat from a 13-month high, after data showed Chinese port stockpiles expanded to the highest level in more than a year………………………………………..Full Article: Source

Stable non-OPEC output decline key to oil price recovery: Goldman Sachs

Posted on 10 May 2016 by VRS  |  Email |Print

The key to a sustainable recovery in oil prices will be stable declines in non-OPEC production, top commodities bank Goldman Sachs said on Monday. In its base case scenario, Goldman said it expects a sustained deficit in the third quarter of the year, until which oil prices are seen trading around current levels.
Crude oil futures were trading around $44 a barrel on Monday after the market shrugged off a cut of 1 million barrels per day in Canadian oil production due to a wildfire………………………………………..Full Article: Source

Is China fueling a new commodities bubble?

Posted on 06 May 2016 by VRS  |  Email |Print

Remember the massive plunge in commodity prices last year? For some investors in China, it already appears to be a distant memory. Steel and iron ore prices have buoyed in recent weeks. Other commodities — including cotton and even eggs — are also reported to have seen startling surges on Chinese futures exchanges. The moves have prompted some experts to worry that a new bubble is forming.
Higher iron ore prices, for example, have “triggered speculative trading in iron ore futures in China,” said Rajiv Biswas, Asia-Pacific Chief Economist at IHS Insight. But the rally “may falter due to continued excess supply in world iron ore markets,” he warned………………………………………..Full Article: Source

On Bull-Market Brink, Citi Sees Commodity Gains as Goldman Jeers

Posted on 05 May 2016 by VRS  |  Email |Print

Commodity bulls, it might finally be time to exhale. There’s a growing chorus of voices and a surge of investor money signaling the worst of the commodity slump is over. Leading the pack is Citigroup Inc., the bank that was ahead of the game back in 2012 when analysts declared the end of the super cycle of rising demand and prices.
Now, the bank expects a weaker dollar and China’s stabilizing economy mean most markets have reached their bottoms. Raw materials are on the brink of a bull market, after five straight years of price declines fueled by slowing Chinese demand and global surpluses for most metals, grains and energy products………………………………………..Full Article: Source

How to Invest in Bottoming Commodities

Posted on 05 May 2016 by VRS  |  Email |Print

After falling to multi-year and in some cases, multi-decade lows, it appears that commodity markets might be bottoming. Barclays says the low the Bloomberg Commodity index put in during January’s selloff matched the all-time lows last hit in 1999, and since then the index has risen.
Investor interest is back in the commodity sector as assets under management for the precious metals, base metals, energy and agriculture markets are rising so far for 2016. That’s lifted values, with prices for commodities as disparate as crude oil, iron ore, gasoline, soybeans, coffee and gold all up for the year, too………………………………………..Full Article: Source

Commodities still pose growth threat: IMF

Posted on 04 May 2016 by VRS  |  Email |Print

Just hours before releasing his first budget, Australian Treasurer Scott Morrison has been warned commodity prices still pose a threat to the economic outlook. That would have a further negative impact on the growth prospects of commodity exporters like Australia, the IMF said in its regional economic outlook for Asia and the Pacific released in Hong Kong on Tuesday.
“Asia remains the most dynamic part of the global economy but is facing severe headwinds,” the IMF says. The global recovery is still weak and global trade is slowing, while China’s transition to more sustainable growth will continue to have a short-term impact………………………………………..Full Article: Source

Careful, this oil price rally isn’t as deep rooted as it looks at first glance

Posted on 04 May 2016 by VRS  |  Email |Print

At first glance, oil prices have rallied — a lot. Look closer, however, and the market is still pricing the “lower-for-longer” mantra, much as it did at the beginning of the year.
Front-month futures for West Texas Intermediate, the U.S. benchmark, have risen 21 per cent this year, but the recovery looks very different if you focus on the longer term. The five-year-forward WTI contract fell 2.6 per cent over the same period, reflecting the view that shale oil production could rebound as prices recover, capping any rally………………………………………..Full Article: Source

World Bank raises forecast for crude oil prices

Posted on 03 May 2016 by VRS  |  Email |Print

The World Bank is raising its 2016 forecast for crude oil prices to $ 41 per barrel from $ 37 per barrel in its latest Commodity Markets Outlook. This represents a drop of 19 per cent from the 2015, as an oversupply in markets is expected to recede.
In a statement made available to the Ghana News Agency by the World Bank’s Online Media Briefing Centre (OMBC), it said improving market sentiment and a weakening dollar was responsible for its position. It said the crude oil market rebounded from a low of $ 25 per barrel in mid-January to $ 40 per barrel in April, following production disruptions in Iraq and Nigeria and a decline in non-organisation of the Petroleum Exporting Countries production, mainly United States sale………………………………………..Full Article: Source

Gold Has Potential To Reach $1,400 - RBC Analyst

Posted on 03 May 2016 by VRS  |  Email |Print

Gold’s rally continues, and according to one technical analyst known in the industry, the uptrend could push prices $100 higher. “The trend on gold is in a strong short-term uptrend that now has the potential to reach the 1,400 level over the next few months,” said Bob Dickey, technical analyst for RBC Capital Markets, in a research report released Monday.
However, despite this relatively bullish call, the analyst said it is still too early to tell if gold’s momentum will remain longer term. “It is still too early to determine if the current rally is the start of a longer-term uptrend, or just a move to the top end of a range,” he said. “So, we suspect that gold-related issues will be possible sells if the metal gets close to 1400.”……………………………………….Full Article: Source

Analysts Just Aren’t Buying the Oil Rally

Posted on 29 April 2016 by VRS  |  Email |Print

Questions remain about current high oil stockpiles and the potential for increased supply. Even as oil rallies, analysts have barely nudged up their price forecasts as they worry that crude’s recent gains might not be sustainable.
The price of oil has jumped 76% from the decade-low it hit earlier this year. That is mainly on hopes that dwindling U.S. oil production will help take crude out of an oversupplied market………………………………………..Full Article: Source

World Bank sees US$41 oil this year, but cuts outlook for other commodities

Posted on 27 April 2016 by VRS  |  Email |Print

The World Bank is raising its 2016 forecast for crude oil prices to US$41 per barrel, up from the US$37 per barrel forecast at the start of this year, in view of “improving market sentiment and a weakening dollar”.
This forecast of firming energy prices, made in the World Bank’s latest edition of its Commodity Markets Outlook, is thus positive for producing countries in Asia and elsewhere, and also for central banks struggling to reverse persistent deflationary trends in their economies. The bank’s outlook for other commodities, however, is less bright………………………………………..Full Article: Source

All you wanted to know about the Shanghai Gold Fix

Posted on 26 April 2016 by VRS  |  Email |Print

China’s displeasure over the dollar’s supremacy in global financial markets is no secret. The Chinese feel the yuan should rightfully be the preferred reserve currency of all nations. In yet another move to dethrone the dollar, China has now decided to get its own gold benchmark that will be denominated in yuan.
While the Shanghai Gold Fix may not immediately have an impact on international gold prices, it does help diminish the need for the dollar. Gold prices will now be fixed twice every day in China, based on the contracts traded on the Shanghai Gold Exchange. Shanghai gold fix will compete with the popular benchmark, the London Fix, which is set by the London Bullion Market Association………………………………………..Full Article: Source

Goldman says commodities rally not backed by fundamentals

Posted on 25 April 2016 by VRS  |  Email |Print

The recent rally in commodity prices is not supported by fundamentals in the physical markets, Goldman Sachs said, adding that oil could see downside risks in the near term. “While this recent rally has the potential to run further to the upside … we believe that it is not yet driven by a sustainable shift in fundamentals,” Goldman Sachs analysts said in a note.
“Given the near-term and temporary nature of the current re-balancing and the lack of longer-term sustainable deficits in any of the markets, it is premature to embrace these ‘green shoots’ and shift to an ‘overweight’ recommendation in commodities.”……………………………………….Full Article: Source

Commodities Rally Built on Shaky Foundations, Traders and Analysts Say

Posted on 22 April 2016 by VRS  |  Email |Print

A recent rally in agricultural commodities markets spurred by the prospect of weather damage to harvests looks vulnerable to a turnaround, traders and analysts said Thursday. “The chances of a correction are quite high,” said Fiona Boal, director at London-based Fulcrum Asset Management.
Flooding in Argentina is threatening to drown swaths of the soybean harvest, prompting traders to predict as much as 5% of the 2015-16 soybean crop—estimated by the USDA at 59 million metric tons—could be destroyed………………………………………..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

Q2 Could Help Gold; But Metal Still Ending Year at $1,100/oz - Forecaster

Posted on 19 April 2016 by VRS  |  Email |Print

One known forecaster remains bearish on gold, even if he expects this quarter to be a little more exciting for the metal. Barnabas Gan, commodity economist for Oversea-Chinese Banking Corp. (OCBC), said he is sticking to his bearish calls for gold, looking for the metal to end the year at least $100 lower from current prices.
“We remain firm on our call for the FOMC to inject two more rate hikes this year, with the first one to come likely as early as June 2016,” he said in the OCBC’s latest commodities report released Friday………………………………………..Full Article: Source

Citi: Risk Aversion To Support Gold Prices In 2Q Before Tapering In 2H

Posted on 19 April 2016 by VRS  |  Email |Print

Citi Research looks for gold to remain underpinned in the current quarter but cautions that strength could abate later in the year. “We believe current price momentum may begin to ease after this quarter, averaging $1,200/oz for the year as a whole,” the bank says.
Citi lists a 60% probability of its base-case scenario, which would be gold holding current levels and maintaining a bid “as lingering risk aversion supports ongoing gold inflows in the second quarter, perhaps countered by better risk appetite in other asset classes, particularly oil and equities in 2H16.”……………………………………….Full Article: Source

Commodities Have Seen Bottom as China Fears Ebb, Citigroup Says

Posted on 18 April 2016 by VRS  |  Email |Print

Commodities have passed the worst of a rout amid brighter prospects for Chinese demand, a weaker dollar and signs of tighter supplies, according to Citigroup Inc. “There is growing evidence that virtually all commodities have stared at a price bottom and are groping for a return to normal,” analysts including Ed Morse said.
Petroleum and natural gas markets are recovering, while industrial metals are advancing as China’s property market picks up, they said. Iron ore’s rally will fade amid oversupply. Recent signs of stabilization in China are “likely a result of improved real estate activity and infrastructure investment on the back of broad-based credit easing,” the analysts wrote………………………………………..Full Article: Source

Oil-Freeze Deal Would Have Limited Impact on Market, Says IEA

Posted on 15 April 2016 by VRS  |  Email |Print

A prospective deal to freeze oil output at a meeting of producers in Doha on Sunday won’t change oil markets which have already started to rebalance anyway, a top energy watchdog said Thursday.
Russia and Saudi Arabia–the world’s top oil exporters–are set to meet with other oil nations in Doha, Qatar, hoping to reach an agreement to cap their supply level in order to revive oil prices. But in its closely watched oil-market report, the International Energy Agency said “any deal struck will not materially impact the global supply-demand balance” during the first half of 2016………………………………………..Full Article: Source

IMF Downgrades Global Economic Outlook For 2016 and 2017

Posted on 13 April 2016 by VRS  |  Email |Print

Once again the global economy is not as strong as initially expected, as the International Monetary Fund has downgraded its outlook for this year and next. Tuesday, in its spring World Economic Outlook, the IMF said that it expects the world economy to expand by 3.2% in 2016 and 3.5% in 2017. This is down from its previous forecasts of 3.4% and 3.6%, respectively.
“The global recovery has weakened further amid increasing financial turbulence. Activity softened toward the end of 2015 in advanced economies, and stresses in several large emerging-market economies showed no signs of abating,” the IMF said in its executive summary………………………………………..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

Gold Prices Unlikely To Slow Down, $1,350/oz In 2017: Credit Suisse

Posted on 12 April 2016 by VRS  |  Email |Print

Once again these are golden times for gold. The precious metal has regained some of the strength it lost over the last year after having a record high quarter in 2016. Gold prices gained 16% to 17% in the first quarter and are currently at $1,235/ounce. According to analysts at Credit Suisse, the precious metal is going to follow an upward trajectory throughout this year.
Michael Slifirski and Nick Herbert write in their FX and Commodities quarterly review that gold prices will peak at $1,350/ounce in the first quarter of 2017. The report further states that gold is likely to keep rising until the global economy stabilizes against fears of recession. Credit Suisse predicts a pullback in gold prices at the beginning of 2018 as real interest rates turn upwards………………………………………..Full Article: Source

What’s the World Gold Council Advising on Gold?

Posted on 12 April 2016 by VRS  |  Email |Print

Amid the global unrest that kicked off 2016 were the negative interest rate policies in Japan and Europe. The interest rate going negative may stand for swelling balance sheets and possible currency wars in the future. With negative rates, government bonds pay no interest but rather charge interest.
Under these circumstances, investors seem to prefer putting their money in gold rather than government securities. The World Gold Council has remained optimistic on gold due to NIRPs (negative interest rate policies) of major economies. It stated, “We believe that, over the long run, NIRP may result in structurally higher demand for gold from central banks and investors alike.”……………………………………….Full Article: Source

Gold’s Rally Far From Being Over - Capital Economics

Posted on 11 April 2016 by VRS  |  Email |Print

Despite gold’s rally losing some steam, one U.K.-based research firm remains optimistic on the yellow metal’s price this year. “We think that gold’s rally this year is far from being over,” said Simona Gambarini, commodities economist for Capital Economics, in a research note Friday morning.
“We expect building inflationary pressures in the U.S. to keep real interest rates low, boosting the attractiveness of gold as a store of value,” she explained further. Gold prices remain up on the year but have recently lost steam as stronger U.S. employment and manufacturing data have reignited prospects of Federal Reserve rate hikes this year………………………………………..Full Article: Source

Goldman Says Oil at $35 Is ‘Goldilocks’ Ideal for U.S. Explorers

Posted on 08 April 2016 by VRS  |  Email |Print

Oil at $35 a barrel is neither too high nor too low but just right to make shares of U.S. explorers worth buying, according to Goldman Sachs Group Inc. While prices of crude at that level are above cash costs of production, they will deter a rebound in shale output from occurring too early, the bank’s New York-based analysts including Brian Singer said in a report dated April 6.
Oil at $30 to $35 a barrel should keep the behavior of U.S. companies unchanged and help lift West Texas Intermediate to $55 to $60 a barrel in 2017, according to Goldman………………………………………..Full Article: Source

Commodities show signs of recovery hope

Posted on 04 April 2016 by VRS  |  Email |Print

Have we hit the bottom yet? That seems to be the question of the moment. No one knows, although there are signs of hope. And there are also signs that this nascent mood of optimism is spilling over into commodities.
What to make of a week when one headline screams “Dow posts biggest quarterly comeback since 1933” (another version was: “The Dow is doing something it hasn’t done since 1933”)? They were talking about the fact that, in the last week of March, the Dow and the S&P 500 wiped out their losses for the quarter. Quite a performance, and thanks largely to the Federal Reserve more than hinting it was going dovish on further rate rises. So ZIRP (zero interest rate policy) and NIRP (that’s negative interest rate policy) seem to be the new normal………………………………………..Full Article: Source

Gold Getting Stale? – Charts and COTs

Posted on 04 April 2016 by VRS  |  Email |Print

Notice on the very short term chart, a 2 hour run, gold has been in a steady decline since the middle of last month with rallies attracting selling at the key resistance levels noted on the chart. Price is currently holding below $1212 – $1210.
Initial resistance begins near $1225 and extends higher towards $1228. Above that lies $1237-$1240. Watch out if that low near $1205 were to give way. There still remain a large number of spec longs in this market. On a percentage basis, this is the largest combined large spec long position going back past 2011………………………………………..Full Article: Source

FY16: A year of uncertainty for commodities

Posted on 01 April 2016 by VRS  |  Email |Print

The US Fed’s frequent change in its stance over interest rates kept metals, bullion and energy prices subdued in 2015-16. Prospects of recovery in consumption of metals were weakened by contraction in China and turbulence in the global economy. The US Fed’s frequent change in its stance over interest rates kept metals, bullion and energy prices subdued in 2015-16.
After three years of negative return, gold turned positive in FY16, following huge volatility in equity markets. Gold climbed 16.5 per cent in Q1, its biggest quarterly rise since 1986. Silver lagged behind with a fifth year of negative returns………………………………………..Full Article: Source

Commodities Outlook: Best and Worst Performers (Video)

Posted on 01 April 2016 by VRS  |  Email |Print

Oil declined as rising U.S. crude stockpiles kept supplies at the highest level in more than eight decades. Copper dropped for a fifth day, the longest losing streak since January, amid growing scepticism about demand in China. Most other metals traded lower in London.
However, gold headed for the biggest quarterly advance since September 1990 as demand for haven assets surged to make the metal one of this year’s best performing commodity. BNP Paribas Global Head of Equity Derivative Strategy Edmund Shing discusses commodities with Bloomberg’s Kenneth Hoffman. They joined Anna Edwards on “Countdown.”……………………………………….Full Article: Source

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