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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

How is iron ore priced?

Posted on 10 March 2016 by VRS  |  Email |Print

It may not attract as many headlines as oil, but a record 19 per cent jump in iron ore prices this week has drawn renewed attention to the key steel making ingredient, which underpins the profits of most of the world’s biggest miners.
News that a flower show in the Chinese city of Tangshan was a major driver of the spike has also raised questions about the way in which iron ore prices are calculated and published. Iron ore prices have actually only been set on a daily basis for the past eight years, and are not as transparent as prices for many other industrial commodity markets………………………………………..Full Article: Source

Beware ‘premature surge’ in commodities: Goldman

Posted on 09 March 2016 by VRS  |  Email |Print

Gold, iron ore and oil prices are seeing a rebound at the moment with many analysts believing that commodity prices have “bottomed out” and are eyeing gains, but Goldman Sachs has issued a warning on the current surge in commodities arguing that it is “not sustainable.”
Goldman’s commodity analysts noted that while last year commodity prices were driven lower by deflation, divergence and deleveraging, current market views on “reflation, realignment and re-levering have driven a premature surge in commodity prices that we believe is not sustainable.”……………………………………….Full Article: Source

The problem with the commodity bounce: ‘There’s no juice there’

Posted on 09 March 2016 by VRS  |  Email |Print

After years of underperforming stocks, commodities are beating the S&P 500 this year, at least as measured by the Dow Jones Commodity Index. But some traders still advise staying far away from the commodity space.
The recent move higher is “definitely a head fake,” Boris Schlossberg of BK Asset Management said Monday on CNBC’s “Power Lunch.” The biggest problem, he said, is that little has changed. Most commodities have slid due to strong supply and disappointing demand, and these fundamental factors remain intact………………………………………..Full Article: Source

Oil prices expected to recover to around $70 by 2020: Kemp

Posted on 09 March 2016 by VRS  |  Email |Print

Oil prices are expected to rise gradually over the next five years but will remain well below the pre-crash level, according to a survey of professionals who follow the oil industry. Brent prices are expected to climb from an average of $40 per barrel in 2016 to between $65 and $70 per barrel by the end of the decade.
The price expectations are based on an email survey sent to more than 2,500 energy professionals working in oil and gas, banking, hedge funds, research, professional services, trading and specialist media earlier this month………………………………………..Full Article: Source

Goldman Sachs still bearish on gold despite recent price rally

Posted on 09 March 2016 by VRS  |  Email |Print

Goldman Sachs has maintained its bearish view on gold despite the metal’s recent rally alongside other commodities, it said. Gold climbed to its highest in 13 months last week – the yellow metal has been in demand as a safe-haven asset, supported by turbulence in financial markets since the start of the year, the broker said in a note on Tuesday.
This flight to safety pushed the metal into official bull territory, which is defined as a 20-percent move from its recent low. The price has also been boosted by an uninspiring dollar – the dollar index was last lower at 97.03………………………………………..Full Article: Source

While market debates commodities bottom, inflation warnings rise

Posted on 08 March 2016 by VRS  |  Email |Print

Some traders have been ringing the bell for the bottom of the commodities collapse, just as markets are sniffing out the earliest signs of inflation. That’s important since a turn in commodities prices could mean a pickup in inflation, which is already starting to materialize, and that could get the Fed moving faster on interest rate hikes.
Fed funds futures on Monday began to price in a full rate increase for December, for the first time since late January. Futures had been pointing to the first rate hike in March 2017. “Services inflation has remained steady for a while. All you needed was commodities prices to stop going down and that changed the inflation calculation here,” said Peter Boockvar, chief market analyst at The Lindsey Group………………………………………..Full Article: Source

Global politics and economics Oil price prognosis

Posted on 07 March 2016 by VRS  |  Email |Print

Predicting the oil prices is a hundred million dollar question; in literal sense, it’s a game of billions of dollars. This is one of the most difficult tasks, given that there’re too many variables and moving parts on the economic, and more so, on the political fronts. Market punters are not willing to take a view for longer tenors and quote forward rates for larger volumes beyond 2/3 months. The recent phenomenon is surely more political than otherwise.
The similar situation was witnessed almost 30 years back, in 1985-86 when there was oversupply situation whilst demand, and hence prices, remained subdued. The meaningful difference this time round, however, is the enhanced world storage capacity availability - 85 million tons………………………………………..Full Article: Source

Gold overvalued, time to sell: SocGen

Posted on 02 March 2016 by VRS  |  Email |Print

The recent gold price rally looks unsustainable and it’s time to sell, Societe Generale analysts say, taking an opposite view to rival Deutsche Bank that only last week advocated buying the precious metal. Gold prices have rallied 20 percent just two months into 2016 as investors seek refuge from the turbulence in developed equities and emerging markets.
The fear is also prompting investors to trim expectations of further interest rate hikes from the U.S. Federal Reserve this year but the reality is likely more upbeat, according to SocGen………………………………………..Full Article: Source

Gold still a buy, says Deutche Bank

Posted on 01 March 2016 by VRS  |  Email |Print

Gold remains a buy even though it has it has rallied over 16 per cent since the start of the year, according to a note from Deutsche Bank, with global central bank misfires making a strong case for bullion’s safe-haven status.
And in Australian dollars, gold has come within shooting distance of all-time highs, prompting Macquarie Bank to call Western Australia’s gold fields the “golden west”, whose operators were in a “purple patch”. However, while Macquarie predicts Australian dollar gold will break those record highs later this year, it is too late to be buying most gold shares, the bank warned………………………………………..Full Article: Source

This chart suggests Chinese demand for commodities will remain weak in 2016

Posted on 29 February 2016 by VRS  |  Email |Print

Last week we brought you the news that new home prices in the southern Chinese city of Shenzhen soared by more than 50% in the 12 months to January, a figure that put the likes of New York, London and Sydney to shame in terms of annual rates of growth.
However, while prices are ripping higher in Shenzhen, along with other major Chinese centres such as Shanghai and Beijing, the gains elsewhere in the country are nowhere near as strong, doing little to lift sentiment towards the outlook for construction, commodity demand or a broader housing market recovery in China in the period ahead………………………………………..Full Article: Source

French central bank head cautions on oil price impact

Posted on 29 February 2016 by VRS  |  Email |Print

The European Central Bank could extend money printing, the head of France’s central bank told a German newspaper on Sunday, as the long-term impact of low oil prices weighs on euro zone economies.
ECB governors from across the euro zone, including France and Germany, will meet in early March to decide whether to adjust interest rates or extend a scheme known as quantitative easing, creating money to buy government bonds in a bid to revive inflation and boost recovery………………………………………..Full Article: Source

USDA: 2016 to be another bad year for farm commodities

Posted on 26 February 2016 by VRS  |  Email |Print

Commodity prices will not recover this year, the federal government said Thursday in a forecast that will be a blow to producers hoping for a rebound in the slumping farm economy.
The U.S. Department of Agriculture said producers should expect slumping farm income, modest declines in land values and cash rents and a less-than-favorable trade environment. Even so, the USDA declared that the financial health of the agriculture sector is strong because producers took advantage of record harvests and high prices in past seasons to strengthen their bottom line………………………………………..Full Article: Source

Big Banks Cut Oil-Price Forecasts

Posted on 26 February 2016 by VRS  |  Email |Print

Big banks are slashing their outlook for oil and see prices recovering more slowly than previously anticipated as the market remains caught in the grip of a supply glut. A survey of 13 investment banks by The Wall Street Journal foresees Brent crude, the international oil-price benchmark, averaging $39 a barrel this year, down $11 from the survey in January.
The banks see West Texas Intermediate, the U.S. oil gauge, averaging $38 a barrel this year, also down $11 from the previous survey. The banks have cut their price outlook in every survey since August………………………………………..Full Article: Source

BNP Paribas Sticks To Sub-$1000 Gold Forecast For 2016, Despite 17% Rally

Posted on 25 February 2016 by VRS  |  Email |Print

Although some banks have shifted their outlook on gold, as global market uncertainty propelled prices up more than 17.5% on the year, one bank remains firm that prices will move lower. Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas, said that the bank is in no hurry to change its forecast and there is still a possibility for gold to drop below $1,000 an ounce.
In January, the firm said that it expects gold prices to average $980 an ounce this year and $860 in 2017; and, Tchilinguirian said that fundamentally nothing has changed. In fact, the latest rally has made selling out of the money call options — the bank’s preferred way to take advantage of a weaker gold market — a lot more compelling, he added………………………………………..Full Article: Source

IMF report urges G20 to prepare global economic stimulus plan

Posted on 25 February 2016 by VRS  |  Email |Print

The Group of 20 nations must plan now for a coordinated stimulus programme to keep a slowing global economy from stalling, International Monetary Fund staff said in a report on Wednesday.
The report was prepared for senior G20 officials who are meeting in Shanghai later this week amid falling equity markets, volatile currencies and signs of economic weakness throughout the world. “The G20 must plan now for coordinated demand support using available fiscal space to boost public investment,” IMF staff said in the report………………………………………..Full Article: Source

Global growth not to pick up on Commodity price slump, China:Moody’s

Posted on 19 February 2016 by VRS  |  Email |Print

Global growth will fail to pick up steam over the next two years as the slowdown in China, lower commodity prices and tighter financing conditions in some countries weigh on the economy, Moody’s Investors Service said in a quarterly report.
The downside risks to Moody’s forecasts for G20 GDP growth of 2.6% in 2016 and 2.9% in 2017 have increased since the rating agency’s last Global Macro Outlook in November. Furthermore, G20 policymakers in some countries have limited fiscal and monetary policy space to boost growth or mitigate these risks………………………………………..Full Article: Source

Commodities glut here to stay? - ANZ

Posted on 17 February 2016 by VRS  |  Email |Print

Analysts at ANZ noted that, overnight, Saudi Arabia and Russia reached a preliminary agreement to freeze their oil output at near-record levels. “This is described by Bloomberg as “the first significant cooperation between OPEC and non-OPEC producers in 15 years”.”
“Qatar and Venezuela are also on board. No cuts in production were agreed, however, given oil producers are battling for long-term market share, which weakens the impact of the agreement significantly, as does the lack of involvement by Iraq and Iran.”……………………………………….Full Article: Source

Goldman Sachs: Short gold on market ‘overreaction’

Posted on 17 February 2016 by VRS  |  Email |Print

Hefty stock market plunges this year have not been justified, according to commodity analysts at Goldman Sachs, who are urging clients to short gold which has found favor during this period of fear and volatility. “Systemic risks from oil, China and negative rates are very unlikely,” a team at the bank, led by Jeffrey Currie and Max Layton, said late Monday.
“Banks have ample liquidity to maintain funding against higher capitalization, the negative macro impacts from low oil prices have likely already played out and are not systemic while the spillovers from China are limited and the U.S. is far from recession.”……………………………………….Full Article: Source

Silver forecast and analysis for Q1 2016

Posted on 17 February 2016 by VRS  |  Email |Print

Silver fell for a third straight year in 2015, falling 12 percent to its lowest since 2009. It continued to come under downward pressure in the fourth quarter, dropping five percent, in a challenging macro environment and amid disappointing industrial demand and poor investment sentiment.
But the metal should enjoy a recovery in the current quarter, trading in a $13.80-14.95 range – a rise that reflects improved investor sentiment – before it faces renewed downward pressure later in 2016 due to weaker industrial demand and lower gold prices………………………………………..Full Article: Source

Strong H2 Uptick In Gold Demand In 2015 - WGC

Posted on 12 February 2016 by VRS  |  Email |Print

The World Gold Council’s latest Gold Demand Trends report for full-year 2015 is now out, utilising data prepared by the London-based precious metals consultancy - Metals Focus.
Unlike the latest supply/demand report from the rival consultancy GFMS, the WGC figures put China as firmly the World No. 1 gold consumer at 985 tonnes as compared with India’s 849 tonnes………………………………………..Full Article: Source

5 new oil market insights from Wood Mackenzie that you need to hear

Posted on 11 February 2016 by VRS  |  Email |Print

Harold “Skip” York told Calgary financial analysts that while there is a lot of health looking 2020+, survival will be challenging until we get there. 1. York said that oil will not return to $110/bbl. “We now think that fundamentally this long-term oil market is about an $80 to $85 world.”
2. Costs are going to come down as producers are forced to become more efficient, driven by a design once, build many approach. 3. “The risk for Canada and Brazil isn’t 2016 or 2017, it’s 2018 and beyond because the project pipeline is empty because you aren’t sanctioning any new projects.” 4. The price of oil will start its recovery this year………………………………………..Full Article: Source

Won’t be surprised to see oil below $20: Goldman Sachs

Posted on 10 February 2016 by VRS  |  Email |Print

Goldman Sachs commodity strategist Jeff Currie sees a potential for oil price to drop below $20 a barrel if storage capacity is breached. “The $20 is based upon what we call cash cost, meaning that once you breach storage capacity, prices have to spike below cash cost because you’ve got to shut production in almost immediately,” he told a TV channel.
“I wouldn’t be surprised (if) this market goes into the teens. But we do know that when we got to that $26-28 range we started to see action. We started to see price volatility turn into fundamental volatility for the first time,” Currie added………………………………………..Full Article: Source

Oil price recovery will be short-lived, says IEA

Posted on 10 February 2016 by VRS  |  Email |Print

A recent rise in oil prices is a “false dawn” and the oversupply of crude is set to worsen, according to the International Energy Agency (IEA). The IEA expects oil stocks to grow by two million barrels a day in the first quarter and 1.5 million barrels a day in the following three months.
In January, Brent crude hit a 13-year low of $27.67. It recovered a bit, but on Tuesday was down 7.2% at $30.50. But that is still a long way from the $112 level reached in June 2014………………………………………..Full Article: Source

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