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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

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

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