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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

Economy will take years to adjust to tumbling commodity prices, says BoC

Posted on 01 April 2016 by VRS  |  Email |Print

The Bank of Canada says poor prices for oil and other resources could become the “dominant source of drag” on the economy. Using its “best guess,” the Bank of Canada predicts the economy will take more than two years to fully adjust to the commodity price shock.
Lynn Patterson, the central bank’s deputy governor, said in a March 30 speech that tumbling oil and other resources prices have translated into losses of about $1,800 for every Canadian………………………………………..Full Article: Source

Banks Raise Oil Price Forecasts But Remain Cautious

Posted on 01 April 2016 by VRS  |  Email |Print

Big banks have slightly raised their oil-price forecasts for the first time since August but remain cautious about crude’s outlook. A survey of 13 investment banks by The Wall Street Journal shows their average forecast increased by a dollar from the previous month, while U.S. crude prices have rallied by nearly 50% since their February lows.
The banks see Brent crude, the international oil-price benchmark, averaging $40 a barrel this year, and West Texas Intermediate, the U.S. oil gauge, averaging $39 a barrel………………………………………..Full Article: Source

Moody’s: Challenging oil market conditions keep hurting offshore drillers’ credit profiles

Posted on 01 April 2016 by VRS  |  Email |Print

Low oil prices and waning demand for drilling services will continue to put the credit profiles of Brazilian offshore drilling vessel projects under pressure for the next three to five years, says Moody’s Investors Service.
Petróleo Brasileiro S.A. (Petrobras, B3 negative), Brazil’s national oil company, slashed its projected capital spending budget by more than a third earlier this year. Much of the reduction in spending will affect exploration and production activities, impacting drillers that have significant re-contracting risk and a large amount of debt outstanding………………………………………..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

Another tough year expected for commodities – BofAML Global Research

Posted on 31 March 2016 by VRS  |  Email |Print

In the wake of lacklustre discipline by producers to curtail output in the face of relentless price declines, Bank of America Merrill Lynch (BofAML) Global Research was concerned that another leg of lower prices may be required to incentivise another round of cuts for a range of materials.
In its ‘Metals Strategist’ publication Tuesday entitled ‘Metals sunrise’, analysts warned that an overarching theme for 2016 was going to be that manufacturing activity in China and the rest of the world continued to face headwinds, impacting commodity demand negatively. BofAML stated that China’s economic activity might not improve until the second half of the year………………………………………..Full Article: Source

Commodities price collapse hurting Canadian incomes, BoC official says

Posted on 31 March 2016 by VRS  |  Email |Print

The aftershocks of the commodities price collapse, already plucking $1,800 a year out of Canadians’ pockets, could persist for more than two years and permanently impair the economy. That’s the conclusion of the Bank of Canada, based on the central bank’s latest economic modelling.
The full impact of the hit to Canadian incomes is “gradually building” and will get worse before it gets better, Deputy Governor Lynn Patterson warned in a speech in Edmonton on Wednesday………………………………………..Full Article: Source

Soft Commodities

Posted on 31 March 2016 by VRS  |  Email |Print

Also called softs, the term generally refers to commodities that are grown, rather than mined (hard commodities). For instance, tropical commodities such as coffee, cocoa, sugar, orange juice, lumber. These are assets that have more than one utility - they’re not just instruments to be traded in the market.
The resources are items with characteristics that remain unchanged across the market and can, therefore, be traded on a commodity market in a similar manner as equities and currencies are transacted. While the value of hard commodities can be impacted by climatic occurrences, the soft commodities sustain the biggest fluctuations when agricultural variables shift………………………………………..Full Article: Source

Commodities may tumble amid ‘rush for exits’, says Barclays

Posted on 30 March 2016 by VRS  |  Email |Print

Commodities including oil and copper are at risk of steep declines as recent advances aren’t fully grounded in improved fundamentals, according to Barclays Plc, which warned that prices may tumble as investors rush for the exits. Copper may slump to the low $US4000s a tonne, from $US4945 in London last week, while oil could fall back to the low $US30s a barrel, analyst Kevin Norrish said in a note.
The risk for raw materials is that investors seek to liquidate bets on gains quickly and in unison, with potentially highly negative consequences, Norrish wrote in the note entitled Buffalo Jump, a term that describes a cliff where North American natives herded bison to their death………………………………………..Full Article: Source

Commodities rebound seen faltering as demand stalls

Posted on 30 March 2016 by VRS  |  Email |Print

Prices for copper and oil are poised to fall, according to a new report that adds to the growing skepticism around the great commodity revival. Kevin Norrish, a widely followed analyst with Barclays PLC, warns that raw materials prices could get trampled if the buyers who have piled into the commodity sector during recent weeks decide to simultaneously rush for the exits.
“Investors have been attracted to commodities as one of the best performing assets so far in 2016,” he said. “However, in the absence of any concerted fundamental improvements, these returns are unlikely to be repeated in the second quarter, making commodities vulnerable to a wave of investor liquidation.”……………………………………….Full Article: Source

Barclays warns of a “rush for the exits” on commodities

Posted on 29 March 2016 by VRS  |  Email |Print

Analysts at Barclays have warned of a “rush for the exits” as investors back away from commodities, resulting in price levels for oil and copper dropping as much as 25pc. A note issued by the bank said that although investors have been attracted to commodities as one of the best performing assets so far in 2016, returns are unlikely to be sustained in the second quarter of the year.
“This could make commodities vulnerable to a wave of investor liquidation that we estimate could, in a worst case scenario, knock as much as 20-25% from current price levels,” the note said. This would take the price of oil back to the low $30s and copper to the low $4,000s, the analysts said………………………………………..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

Commodity Volatility to Continue –Citi

Posted on 24 March 2016 by VRS  |  Email |Print

A tightening oil market and shifting sentiment on commodities in China is lifting all markets, but a rough ride ahead is still in the cards, Citigroup says.
Supply disruptions and the first monthly draw on storage levels in a year in February helped oil. And commodities got a broad boost from “perplexingly huge imports” for oil, copper, iron ore and other raw materials in China, Citi says………………………………………..Full Article: Source

Cramer: Commodity rally could head higher

Posted on 23 March 2016 by VRS  |  Email |Print

Since the market bottomed in mid-February, commodities have dramatically rebounded from their lows. Jim Cramer has watched as everything from copper, iron ore, aluminum to oil have worked their way higher. While the rally took a break on Tuesday, commodities have been on the decline for years, leading Cramer to ask if this is a genuine rally or simply a long overdue, oversold bounce.
Cramer turned to the help of Carley Garner to look at the charts and assess what the future of the commodity complex could look like. Garner is a technician and commodities expert who is the co-founder of DeCarley Trading and a colleague of Cramer’s……………………………………….Full Article: Source

New poll shows commodity prices as greatest challenge for producers

Posted on 23 March 2016 by VRS  |  Email |Print

Commodity prices are the greatest challenge facing agricultural producers in 2016, according to a poll of Farm Credit directors from America’s heartland. More than 64 percent of the directors — from the boards of 17 Farm Credit lenders in 15 states and of AgriBank, their St. Paul-based funding bank — said commodity prices are the greatest challenge facing ag producers this year.
The directors, most of whom are also farmers or ranchers, indicated the next biggest challenges are input costs (over 21 percent), and Mother Nature (nearly 8 percent). Farm Bill implications and land rents were each cited by approximately 3 percent of the respondents………………………………………..Full Article: Source

ABN Amro Ups Its 2016, 2017 Gold Forecast Again

Posted on 23 March 2016 by VRS  |  Email |Print

For the second time in as many months one major Dutch bank has increased it forecast for gold. In a report published Tuesday, analysts at ABN Amro increased their year-end target for gold to $1,370 an ounce, up from their previous target of $1,300. For 2017 they see prices ending the year at $1,450 an ounce, up from the initial forecast at $1,300.
They note in the report that a dovish Federal Reserve, a weaker U.S. dollar and negative real interest rates will all be positive for gold this year. “Recently, we revised our overall US dollar outlook. We now believe that the multi-year US dollar rally has peaked and that it will turn lower,” the say. “Over the recent years, the most dominant driver for gold prices has been the direction of the US dollar. As we are now expecting a lower dollar over the coming years, a crucial headwind is taken away.”……………………………………….Full Article: Source

Gold-to-silver ratio may favor silver

Posted on 23 March 2016 by VRS  |  Email |Print

With the ratio of silver to gold sitting at more than five times higher than the historical average, something has to give — and it’s likely that silver will make the bigger move. The gold-to-silver ratio currently stands at about 1 to 79. In other words, a single ounce of gold with futures prices at $1,248.60 an ounce Tuesday, is worth 79 ounces of silver priced at $15.885.
The ratio, which can serve as an indicator to determine when to buy or sell the precious metals, recently touched its highest level since the 2007-2008 global financial crisis. About five years ago, that ratio was closer to 35, while the historical average is around 15………………………………………..Full Article: Source

Goldman Sachs thinks miners could upgrade earnings by 30pc - or maybe not

Posted on 23 March 2016 by VRS  |  Email |Print

A big part of the recent rally in commodities is due to currency effects, particularly the fall in the US dollar, but Goldman Sachs suggests we could see quite a few earnings upgrades in this half if commodities and currencies stay exactly where they are.
In a note to clients, Goldman Sachs points out higher commodity prices should bode well for local resource stocks, which weighed heavily on last earnings season. But a weakening US dollar and a lift in commodity currencies like the Aussie has meant resource stocks haven’t had as much time in the sun as they might have hoped………………………………………..Full Article: Source

Don’t expect a China-led commodities rebound - GAM

Posted on 22 March 2016 by VRS  |  Email |Print

China’s lower infrastructure spending is expected to slow long-term demand for commodities, according to GAM. “Chinese commodity demand growth will remain in a downward trend over the longer term,” Jian Shi Cortesi, investment manager for Chinese equities at the firm, wrote in a recent research note.
“Capacity reduction will likely happen at a very gradual pace in order to avoid an unemployment shock, particularly in the material-producing regions.” Despite a recent rebound in the materials and energy sectors, she believes they will remain under pressure for the long-term. ……………………………………….Full Article: Source

Commerzbank, HSBC: Silver Starting To Outperform Gold

Posted on 21 March 2016 by VRS  |  Email |Print

Silver has been outperforming gold lately, causing a decline in the gold-silver ratio, say HSBC and Commerzbank. This ratio measures how many ounces of silver it takes to buy an ounce of gold. Early Friday, Comex May silver hit a high of $16.17 an ounce that was its most muscular level since October.
Silver has been helped lately by dollar weakness and improvement in industrial base metals, Commerzbank says. “Because silver has noticeably outperformed gold of late, the gold-silver ratio has decreased from almost 84 at the end of last month to a good 78, its lowest level since early February,” Commerzbank says in an early-Friday research note. As of a late-Thursday HSBC report, the ratio was at 79. “We think it may narrow further, implying that silver will gain on gold,” HSBC says………………………………………..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

Commodities rally ‘overdone’ – Barclays

Posted on 15 March 2016 by VRS  |  Email |Print

The sharp rally in oil prices may be have come “too far, too fast,” analysts at Barclays have warned. Oil prices have surged by around 40 per cent in just a few weeks, as investors have taken a more bullish stance on the global economy and the supply dynamic for the market after a torrid start of the year.
“While there are grounds to believe markets may have bottomed, to us the scale of recent price gains looks overdone,”analysts at Barclays said. The analysts noted that some of the automatic balancing that would have come from very low oil prices may dissipate as US and Brent crude oil prices hover around the $40 a barrel mark………………………………………..Full Article: Source

BMO Ups 2016 Gold Forecast But Foresees Seasonal Pullback

Posted on 15 March 2016 by VRS  |  Email |Print

BMO Capital Markets looks for a seasonal pullback in gold that could end up providing a bargain-hunting opportunity. The bank has upped its 2016 average gold-price outlook by 12% to $1,175 an ounce and silver outlook by 5% to $14.69.
“We expect seasonality to moderate precious-metal prices from current levels through Q2,” BMO says. “Our view – take profits.” The bank later adds, however, that any seasonal weakness “may offer a healthy opportunity to establish positions at more attractive valuations.”……………………………………….Full Article: Source

IEA says oil may have bottomed as non-OPEC producers cut output

Posted on 14 March 2016 by VRS  |  Email |Print

Oil prices might have bottomed as production declines in the United States and other non-OPEC producers accelerate and an increase in Iranian supply has been less than dramatic, the International Energy Agency has said.
After a spectacular 2015, growth in global demand was slowing - with India and the Middle East being rare pockets of improvement, the IEA said in a monthly report………………………………………..Full Article: Source

Which way are world commodities headed?

Posted on 11 March 2016 by VRS  |  Email |Print

It’s the best of times in commodities markets, it’s the worst of times in commodities markets. Iron ore jumped by the most on record on Monday, while Brent crude broke through $40 a barrel for the first time in three months. Market prices are prone to speculation, momentum trading and short squeezes, all of which could explain some of the movement in iron ore and oil.
Here are five indicators worth watching for a clearer picture on where commodities are headed, reports. A benchmark for rates to charter the ships that carry iron ore, coal, and grain, the index is currently at particularly depressed levels thanks to a global glut of cargo capacity. As it tracks real prices being paid to book ships, there’s no speculative element here………………………………………..Full Article: Source

Do Growth ETFs Actually Grow?

Posted on 11 March 2016 by VRS  |  Email |Print

Growth doesn’t always get as much respect as longtime guru-favorite Value, and that may have something to do with hype-oriented rhetoric that often surrounds the former. But we need growth. Unless one can argue for growth, there’s pretty-much no point in being in stocks at all, as opposed to less-risky better yielding bonds. So Growth ETFs should be compelling – except when they aren’t.
Let’s start with the basics of stock pricing, the Dividend Discount Model. It calculates the ideal stock price as D (dividend) divided by the difference between R (required rate of return) and G (the expected growth rate); or P=D/(R-G)………………………………………..Full Article: Source

Five ways to test if the commodities bounce is real

Posted on 10 March 2016 by VRS  |  Email |Print

It’s the best of times in commodities markets, it’s the worst of times in commodities markets. Iron ore jumped by the most on record on Monday, while Brent crude broke through $40 a barrel for the first time in three months. Then Chinese export data Tuesday showed dollar- denominated shipments falling 25 percent, the worst decline since May 2009.
What is going on? There are reasons to take both sets of data with a pinch of salt. Market prices are prone to speculation, momentum trading and short squeezes, all of which could explain some of the movement in iron ore and oil………………………………………..Full Article: Source

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