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What The ‘Brexit’ Means For Gold And Other Commodities

Posted on 30 June 2016 by VRS  |  Email |Print

The news out of the United Kingdom rocked global markets. In an historic referendum vote, citizens of the U.K. narrowly voted for a “Brexit” — a British exit from the European Union. Since joining the European Union in 1973, a fair number of Britons have been skeptical of the governing body.
British attitudes toward European unity have been… complicated, to say the least. Winston Churchill advocated for “a kind of United States of Europe” during a speech in Zurich in 1946, while simultaneously setting the precedent for an arm’s length relationship with the continent throughout his career. Now that the votes are cast, questions remain about what this will mean for trade, immigration, travel and a host of other issues……………………………………….Full Article: Source

The Oil Price Rebound Will Be Brief - Goldman Sachs

Posted on 30 June 2016 by VRS  |  Email |Print

Goldman Sachs has rejected analysts’ opinions that the global oil market is recovering, noting that while it expects a “modest” deficit in the coming months based on the slight rebound in oil prices, the market will again be in a state of surplus by early next year.
It may seem as if oil is recovering on the back of supply disruptions that have helped to chip away at the global glut and push prices close to $50, but Goldman says that in the best-case scenario this isn’t a rebound—it’s just the first signs of one……………………………………….Full Article: Source

Understanding the Difference Between Hard and Soft Commodities

Posted on 30 June 2016 by VRS  |  Email |Print

There are two main types of commodities: hard and soft. Hard commodities consist of natural resources, such as oil or gold. While soft commodities are agricultural goods or livestock that must be grown and cared for in order to be produced. Both markets trade on supply and demand, and are heavily influenced by macroeconomic events.
Hard commodities are usually the ones that make headlines, or are referred to as a basis for economic health. Because the production and supply of these assets can be predicted fairly accurately, they are used to gauge global-economic health. Copper and oil, in particular, are often looked at to determine where the economy is headed by observing total-worldwide demand for these products……………………………………….Full Article: Source

Japan’s Komatsu Warns Brexit Vote Could Delay Commodity Rebound

Posted on 28 June 2016 by VRS  |  Email |Print

The U.K.’s vote to leave the European Union could delay a recovery in commodity prices, while the yen’s response to the Brexit decision, soaring to within sight of 99 to the dollar, was an overreaction, according to Komatsu Ltd.’s chief financial officer.
The Tokyo-based maker of construction equipment, the world’s largest after Caterpillar Inc. of the U.S., is particularly sensitive to commodity prices and the Japanese currency as more than three-quarters of its sales are made overseas, including the equipment used to dig up and transport metals, coal and other minerals………………………………………..Full Article: Source

Big Banks on Oil: Keep Bullish Despite Brexit

Posted on 28 June 2016 by VRS  |  Email |Print

Goldman Sachs Group, Morgan Stanley, and Citigroup joined Deutsche Bank in saying the worst may be nearly over for oil. Brexit has raised risks but ultimately does little to dent the trends of rising demand and falling supply that have been pushing oil on its strongest rally in years, the banks said.
Even if spillover effects from the vote slowed major economies around the world, it would likely reduce oil demand by just 130,000 barrels, or 0.1% of global demand, Goldman analysts said. Deutsche Bank had estimated an even smaller impact, just 100,000 fewer barrels, compared with outages in Nigeria that are taking 400,000 barrels a day off the market………………………………………..Full Article: Source

Gold’s upside from here is limited, says Goldman’s Currie

Posted on 28 June 2016 by VRS  |  Email |Print

Investors are flocking to gold as a safe haven trade after the U.K.’s vote to leave the European Union, but the upside from here is rather limited, the global head of commodities research at Goldman Sachs said. “One of the key reasons for that is the market is incredibly long. We’ve also seen a sharp decline in interest rates, particularly U.S. Treasurys, which suggests that we probably are topping out here,” Jeffrey Currie said.
Goldman Sachs upped its gold price forecast to $1,300 on Friday after Thursday’s Brexit vote sent the price soaring. The precious metal was trading around $1,330 in afternoon trading Monday………………………………………..Full Article: Source

10 reasons why gold price will go up in the future

Posted on 28 June 2016 by VRS  |  Email |Print

The price of gold in India has seen a highest single day jump in the last five years, with the previous one being in August 2011. Globally, too, following the UK votes favouring exit from EU, which is an unprecedented event, has seen nearly $100 per ounce jump in gold prices, which was not a usual phenomenon.
After closing at $1313 on Friday, today it is trading 1% higher in early trade around $1325 per ounce. There are several factors that suggest gold will be a preferred asset for all kind of investors — retail, institutional or even central banks………………………………………..Full Article: Source

Water: The World’s Ultimate Commodity

Posted on 28 June 2016 by VRS  |  Email |Print

Water is one resource that is absolutely necessary for life. Humans can’t survive more than a few days without it, and without water, crops wither and die. You would think we’d consider it a precious commodity. But in the United States, especially on the East Coast, we don’t tend to think of water as the valuable commodity it really is.
Usually the worst drought we have on the East Coast is one that causes us to water our roses less, and make our lawns brown instead of green. At this point, the drought that is hitting its fifth year in California has become old news. We know that the state is suffering from a bad drought… but did you know that it’s the worst drought in 1,200 years?……………………………………….Full Article: Source

Gold wins from Brexit. But other commodities lose

Posted on 27 June 2016 by VRS  |  Email |Print

Gold prices soar, but many commodities will suffer from the ripple effects of the referendum. Goldbugs are natural Brexiteers; intensely suspicious of large bureaucracies like the European Union and avid conspiracy theorists when it comes to the power of global “elites”. They had double reason to celebrate on June 24th, when Britain’s decision to leave the EU sent gold prices soaring.
But the rise of the yellow metal is also a symptom of the fear that Brexit is unleashing on the global economy. Hence other commodities that are more dependent upon global demand, such as oil, fell sharply. After a huge rally since their trough earlier this year, the commodities markets were vulnerable to a shock. Hedge funds and other money managers had built up big bets on rising prices………………………………………..Full Article: Source

Brexit threatens London’s status as a markets hub

Posted on 27 June 2016 by VRS  |  Email |Print

London is the world centre of the complex plumbing of markets, but leaving the EU complicates that. The UK’s decision to leave the EU has already prompted dire warnings over the implications for the City of London’s position as one of the world’s biggest financial trading hubs.
François Villeroy de Galhau, Bank of France governor and ECB governing council member, said: “If tomorrow Britain is not part of the single market, the City cannot keep this European passport, and clearing houses cannot be located in London either,” he told French radio………………………………………..Full Article: Source

‘Brexit’ Unlikely to Have Big Impact on U.K. Oil and Gas Market, Consultant Says

Posted on 27 June 2016 by VRS  |  Email |Print

The U.K. is too large a market for European oil and gas sellers to be marginalized too much by its exit from the European Union, said Simon Flowers, chairman and energy chief analyst at global oil consultancy Wood Mackenzie.
In an interview with The Wall Street Journal, Mr. Flowers said the U.K. could be subject to some tariffs on oil and gas from the EU as part of any new trade deal. However, global markets for both resources are oversupplied and there is enough competition for the U.K. to ensure it still gets a good deal, he added………………………………………..Full Article: Source

The End of Economic Forecasting

Posted on 24 June 2016 by VRS  |  Email |Print

The dominance of finance has made economic volatility the new normal. Why have economic forecasters recently been so wrong? Just two years ago, for example, the common perception was that the big emerging markets would drive global growth. That oil prices would remain above $100 per barrel.
That interest rates would move higher. All of these predictions have been wildly wrong. Yet these variances are neither a coincidence nor a temporary phenomenon. We have entered an age in which economic and financial forecasting is much harder and less reliable………………………………………..Full Article: Source

Here’s how ‘Brexit’ will impact commodities

Posted on 23 June 2016 by VRS  |  Email |Print

Britons will vote on Thursday (Today) on whether to remain in the European Union. Market volatility is expected to be particularly severe if the result is an unprecedented ‘Brexit’. Two opinion polls released on Monday suggested support for Britain staying in the 28-nation bloc had recovered some ground following the murder of a pro-EU lawmaker last week, although a third survey found backers for Brexit ahead by a whisker.
Betfair betting odds have also shown Britain’s ‘remain’ option gaining traction, with the implied probability of such an outcome at 78 per centon Monday, up from 60-67 per centon Friday. Here is a look at what analysts at several banks feel a Brexit vote could do to the broad commodities sphere………………………………………..Full Article: Source

Wells Fargo Thinks Commodities are Still a Good Catch

Posted on 23 June 2016 by VRS  |  Email |Print

The big run by commodities is lifting prices for major benchmarks to new highs in 2016. But advisors who are wary at this point of putting new clients’ money into funds – either broad-based or more focused on futures like gold and oil – might find reason for relief by taking a longer-term view of such historically volatile markets.
“Advisors who are working with clients on a more strategic basis should be able to allocate to commodities with more confidence now,” says John LaForge, head of real asset strategy at Wells Fargo’s Investment Institute………………………………………..Full Article: Source

Era of Cheap Oil Coming to an End - IEA

Posted on 22 June 2016 by VRS  |  Email |Print

The era of cheap oil may soon come to an end, if the prediction of the International Energy Agency, IEA, is anything to go by. The IEA said that there will be rise in oil price due mainly to unplanned outages and disruptions in places like Canada, Nigeria, and Libya.
According to the Agency, it is expected that the oil market will be balanced for the rest of the year, meaning the world will pump roughly as much oil as it consumes. That should nudge prices higher. Oil is currently trading around $50 a barrel, double the nadir reached earlier this year………………………………………..Full Article: Source

Soft Commodities: The Quiet Bull Market

Posted on 21 June 2016 by VRS  |  Email |Print

Sugar is sweet. Coffee is percolating. Orange juice explodes. Cocoa is a long-term bull. Cotton is cheap. Gold and oil get lots of headlines. Recently, we have heard a lot about rallies in soybeans and corn and other commodities. However, rarely do the soft, or luxury goods, get much press, but they have been active over recent months.
In fact, way back in August of 2015, one sweet staple was the first commodity to move higher from multi-year lows. Few took note of the rally, but that agricultural product has almost doubled since then, and it is a staple that most of us consume each day………………………………………..Full Article: Source

Moody’s ups oil price forecast to $40 for 2016

Posted on 20 June 2016 by VRS  |  Email |Print

Moody’s Investors Service today revised upwards its price forecast for oil this year on the back of recent uptick in rates. “Moody’s assumes a medium-term oil price band of $40 to $60 per barrel for both WTI and Brent crude and upwardly revised its shorter-term oil price estimates for these crudes to $40 in 2016, $45 in 2017 and $50 per barrel in 2018,” the rating agency said today.
In March, Moody’s estimated oil prices to be around $33 per barrel in 2016, which will rise to $38 next year and to $43 in 2018. In a release titled ‘Moody’s: Challenging conditions for oil-related entities remain unchanged despite near-term price rebound’, the rating agency said its medium-term outlook for the sector remains unchanged………………………………………..Full Article: Source

Opec revenue seen down for 3rd straight year

Posted on 17 June 2016 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (Opec’s) full-year 2016 oil export revenues will probably fall 15 per cent, down for the third straight year and possibly the lowest in more than a decade before rising in 2017, the US Energy Information Administration (EIA) said.
Members of Opec, including Iran, will likely earn about $341 billion in 2016, about 15 per cent below 2015 levels, based on projections of global oil prices and the group’s production levels, the US government’s EIA said in a report. The last time Opec’s export revenues fell for three years straight was 1983-86………………………………………..Full Article: Source

Global Oil Markets Approach Balance, IEA Says

Posted on 15 June 2016 by VRS  |  Email |Print

Global oil markets are moving close to balance in the second half of this year on stronger-than-expected demand and on supply disruptions, the International Energy Agency said. Summer Said reports the oversupply in the first half of this year is likely to stand around 800,000 barrels a day, down from the 1.5 million barrels initially anticipated.
Global oil demand in the first quarter of this year was revised up to 1.6 million barrels a day. Unplanned shut-ins in Canada and Nigeria as well as the expected drop of 900,000 barrels a day in production from producers outside the Organization of the Petroleum Exporting Countries, or OPEC, will help the markets to rebalance, the oil watchdog said………………………………………..Full Article: Source

Non-Opec oil supply to grow again next year – IEA

Posted on 15 June 2016 by VRS  |  Email |Print

Strong demand growth and production disruptions are easing the oil glut quicker than anticipated, but supply rises outside of the Opec group will return next year, according to the world’s leading energy body.
“Less oil has been stock-piled than we originally expected,” said the International Energy Agency in its closely watched monthly oil market report. The agency initially estimated the surplus of supply over demand in the first half of 2016 would be 1.5m barrels a day, but this has fallen to 800,000 b/d. It expects the oil market to reach a balance by the end of the year………………………………………..Full Article: Source

BMO: Silver Lagging Gold But Expected To Continue Moving Higher

Posted on 15 June 2016 by VRS  |  Email |Print

Analysts at BMO Capital Markets say silver has been lagging gold again lately, but they expect silver to continue moving higher later this year. “There continues to be profit taking in silver, while gold speculative positions are seeing growing longs again,” BMO says.
“Earlier this year, silver prices lagged gold by about six weeks due to uncertainty around industrial activity globally. However, we note that the negative sentiment towards industrial demand has eased somewhat, especially given the outperformance of the steel complex.” The firm says silver industrial demand tends to be “sticky,” although this is often overlooked by markets………………………………………..Full Article: Source

IMF Warns Canada Recovery Faces Commodity Risks

Posted on 14 June 2016 by VRS  |  Email |Print

Canada is undergoing a modest economic recovery but faces increased risks from a long period of lower commodity prices and a possible housing downturn in two of the country’s biggest cities, the International Monetary Fund said Monday.
For now, Canada is adjusting to the recent drop in the price of crude oil, a top Canadian export, the IMF said in its latest update on the country’s economy. However, the agency said uncertainty about future oil prices and further turbulence in China are the biggest external headwinds for the Canadian economy. It warned the fallout from lower commodity prices continues to play out………………………………………..Full Article: Source

Opec: Oil market to reach balance by end of year

Posted on 14 June 2016 by VRS  |  Email |Print

The oversupplied oil market is on track to rebalance later this year as economic growth spurs demand against a backdrop of falling US production and a string of supply outages. The Organization of Petroleum Exporting Countries (Opec) said in its latest monthly report that commercial crude stocks declined by eight million barrels in May.
By contrast, global stocks increased by 12 million barrels in March and April, and by 19 million barrels in February. The chronic glut of oil forced market prices to their lowest point in 12 years in January, but as the excess supply dwindles, prices have rallied higher. Opec’s reference price for May averaged $43.21 a barrel, a gain of $5.35 compared to the previous month………………………………………..Full Article: Source

ETFs/ETPs In Europe Gathered $2.68 Billion In Net New Assets In May 2016

Posted on 14 June 2016 by VRS  |  Email |Print

ETFGI the leading independent research and consultancy firm on trends in the global ETF/ETP ecosystem, today reported ETFGI reports ETFs/ETPs in Europe gathered US$2.68 billion in net new assets in May marking 20 consecutive months of positive net inflows, according to preliminary data from ETFGI’s May 2016 global ETF and ETP industry insights report.
Record levels of assets invested in ETFs/ETPs were reached at the end of May for ETFs/ETPs listed globally at US$3.143 trillion, in the United States at US$2.229 trillion and in Japan which reached US$147 billion. At the end of May 2016, the European ETF/ETP industry had 2,219 ETFs/ETPs, with 6,927 listings, assets of US$530 Bn, from 52 providers listed on 25 exchanges in 21 countries………………………………………..Full Article: Source

FAO sees stable commodity prices amid abundant production

Posted on 13 June 2016 by VRS  |  Email |Print

The global food commodity markets are on a stable path for the year ahead, with solid production prospects and abundant stocks pointing to a broadly stable outcome for prices and supplies, the Food and Agriculture Organisation says.
In its biannual Food Outlook, FAO says lower food prices than last year means that the world’s food import bill are on course to fall to $986 billion this year — below $1 trillion for the first time since 2009 — even as traded volumes increase………………………………………..Full Article: Source

Commodities Slightly Decreased in May due to Fundamental Factors

Posted on 10 June 2016 by VRS  |  Email |Print

Commodities slightly decreased in May, driven by supply factors and macroeconomic events, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was slightly negative for the month, with 11 out of 22 Index constituents posting losses.
Industrial Metals was the worst performing sector, down 7.27%, with all sector commodities yielding negative returns, as demand concerns out of China persisted. Supplies also remained ample, broadly weighing on base metals. Precious Metals declined 7.07%, led lower by Silver, amid a strengthening U.S. Dollar and Chinese industrial demand concerns. (Press Release)

Three reasons why gold won’t tank

Posted on 10 June 2016 by VRS  |  Email |Print

Talk of upcoming Fed rate hikes has caused gold to give up some of this year’s gains. But we believe that the potential downside for gold is limited. Real U.S. interest rates – the key determinant of the gold price – are likely to fall further into negative territory.
In 12 months we forecast gold to be near its current price of $1200 an ounce, retaining most of its bounce from below $1100 since the end of last year. Gold has been among the best performers this year. The precious metal has outshone equity markets and high yield bonds with a gain of nearly 15 percent, to trade at $1215 an ounce………………………………………..Full Article: Source

World Bank cuts global growth forecast on weak demand, commodity prices

Posted on 08 June 2016 by VRS  |  Email |Print

The World Bank slashed its 2016 global growth forecast on Wednesday to 2.4 percent from the 2.9 percent estimated in January due to stubbornly low commodity prices, sluggish demand in advanced economies, weak trade and diminishing capital flows.
Commodity-exporting emerging market countries have struggled to adapt to lower prices for oil, metals, and other commodities, accounting for half of the downward revision, the multilateral lender said in its latest Global Economic Prospects report. It expects these economies to grow at a meager 0.4 percent pace this year, a downward revision of 1.2 percentage points from the January outlook………………………………………..Full Article: Source

Oil and iron ore surge in commodities ‘renaissance’

Posted on 08 June 2016 by VRS  |  Email |Print

Analysts are calling a “renaissance” in commodities after oil climbed to a 10-month high overnight and as iron ore prices jumped further above the US$50-a-tonne threshold. On Tuesday night iron ore climbed a further 2.8 per cent to $US52.54, and is now up 9 per cent since after slumping to $US48.18/tonne last Thursday. Brent crude oil jumped 1.9 per cent overnight to $US51.49/barrel, as the US dollar continued to ease.
“It’s all about energy today, with US crude breaking out again and looking like a thing of beauty,” IG Markets strategist Chris Weston said Wednesday morning. “Further disruptions in Nigeria were cited, but the American Petroleum Institute’s weekly inventory print released this morning showed a massive drawdown of 3.56 million barrels.”……………………………………….Full Article: Source

EIA raises oil price forecasts for this year and next

Posted on 08 June 2016 by VRS  |  Email |Print

The U.S. Energy Information Administration on Tuesday raised its 2016 and 2017 forecasts for West Texas Intermediate and Brent crude prices. In its monthly energy outlook report, the government agency forecast an average price of $42.83 a barrel for WTI this year, up from a previous estimate of $40.32. Brent crude is seen averaging $43.03 this year, up from the $40.52 May forecast.
The EIA left its U.S. oil production estimates for 2016 and 2017 unchanged at 8.6 million barrels a day and 8.19 million barrels a day, respectively. July WTI crude CLN6, +0.10% was trading at $50.03 a barrel Tuesday, up 34 cents, or 0.7%………………………………………..Full Article: Source

A Brexit Could Send The Gold Price Beyond $1,400

Posted on 07 June 2016 by VRS  |  Email |Print

According to a recent poll, the leave campaign has edged ahead with the vote just over two weeks away. Economists predicted that gold could rise to as high as $2,000 if the Grexit had occurred, we feel similar could be likely in the event of a Brexit.
With US rate hikes looking unlikely in June or July we feel nothing can stop gold’s ascent. Additionally, the British pound could have ~20% downside on an exit………………………………………..Full Article: Source

Global food prices rose in May; commodity markets look stable for year ahead – UN

Posted on 03 June 2016 by VRS  |  Email |Print

Global food prices rose 2.1 per cent in May, the fourth straight monthly increase, but stayed about seven per cent below 2015 levels, the United Nations Food and Agricultural Organization (FAO) said today, also noting that food commodity markets are on a stable path for the year ahead, with solid production prospects and abundant stocks pointing to broadly stable prices and supplies.
The FAO Food Price Index rose to 155.8 points in May, with prices rising across the index – a trade-weighted index tracking international market prices for the cereals, vegetable oils, dairy, meat and sugar commodity groups – except for vegetable oil prices, which subsided after a strong hike in April………………………………………..Full Article: Source

The banks where the commodities rout will hurt most

Posted on 31 May 2016 by VRS  |  Email |Print

When it comes to souring commodity-related loans putting pressure on banks, the credit ratings of lenders in Singapore, South Korea and Mongolia are the most at risk. That’s the verdict from Moody’s Investors Service, which highlighted the three countries as areas of particular concern, even though the ratings agency does not expect negative bank rating actions for most of Asia Pacific despite the prolonged commodities rout.
However “pressure on the quality of commodity-related loans could be a contributing factor behind possible negative bank rating actions in Singapore, Korea and Mongolia over the next 12-18 months, as reflected in our negative outlooks on many banks in these systems,” the ratings agency said………………………………………..Full Article: Source

Why the commodity slump could be a good thing for Africa

Posted on 31 May 2016 by VRS  |  Email |Print

There is an urgent need for diversification of Africa’s economies and while it is having an immediate negative effect, the recent commodities slump is beginning to drive change. For example, some investors in Nigeria who have historically thrown their lot behind the oil and gas industries are now looking to buy large tracts of agricultural land in a bid to mitigate the effects of the slump in the commodities sector.
After many years in the wilderness, the agricultural sector is fast emerging as one of the most attractive investment opportunities on the continent – and a sector where innovation and supportive policies can be harnessed to drive growth and jobs, so sorely needed across the continent since the Chinese and global economic slowdowns knocked commodity export opportunities………………………………………..Full Article: Source

Gold price setback temporary: ABN Amro

Posted on 26 May 2016 by VRS  |  Email |Print

Gold is enduring some rare price weakness thanks to dollar strength, but this should prove transient, according to Dutch bank ABN Amro. Prices fell again on Tuesday, coming under pressure from a stronger dollar amid rising expectations of an interest-rate rise this year in the US.
However, Georgette Boele, ABN’s coordinator of precious metals and FX strategy writes that there are a “wide variety of drivers” for prices, and not the dollar alone. “We think that the recent set-back in gold prices is temporary… and drivers will turn more positive again… leading to higher gold prices later this year and next year,” she says………………………………………..Full Article: Source

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

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