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Five signs that the global economic recovery may be an illusion

Posted on 07 April 2014 by VRS  |  Email |Print

The global economy seemed to be on the mend when the International Monetary Fund met for its spring meeting in Washington 10 years ago. Alan Greenspan had cut official interest rates in the US to 1% after the collapse of the dotcom boom and the world’s biggest economy had responded to the treatment. Gordon Brown was chancellor of the exchequer and the UK was in its 12th year of uninterrupted growth.
Companies in the west were flocking to China now that it was part of the World Trade Organisation. The talk was of offshoring, just-in-time global supply chains and integrated capital markets. The expectation was that the good times would last for ever………………………………………..Full Article: Source

IMF warns of economic impact of Ukraine, other crises

Posted on 03 April 2014 by VRS  |  Email |Print

International Monetary Fund Managing Director Christine Lagarde warned today that the political crisis around Ukraine poses a danger to the broader world economy. In a speech in Washington, Lagarde said global growth five years after the Great Recession “remains too slow and weak” and faces multiple threats.
For one, low inflation, especially in Europe and Japan, are dangers for demand and output and consequently jobs, Lagarde said at the Johns Hopkins University School of Advanced International Studies. A second key threat is high corporate leverage in emerging economies, which if not adequately addressed will be worsened by the turmoil from eventual monetary tightening in advanced economies, especially the United States…………………………………Full Article: Source

Latin America’s economies: Life after the commodity boom

Posted on 28 March 2014 by VRS  |  Email |Print

One morning last month Louis Dreyfus, a big commodity-trading house, formally opened a new $10m storage depot in the Peruvian port of Callao. Two of its six bunkers were piled high with 55,000 tonnes of fine brown dust covered by white tarpaulins—copper and zinc concentrate, awaiting blending and shipment.
The warehouse is “a bet that Peruvian mining will continue to be competitive,” says Gonzalo Ramírez, a Dreyfus manager. That looks like a sound wager. Blessed with high-grade ores and cheap energy, Peru’s output of copper—already the world’s third-largest—will more than double in the next three years, thanks to the opening of several low-cost mines……………………………..Full Article: Source

Barclays raises 2014 gold price forecast, cites performance so far

Posted on 27 March 2014 by VRS  |  Email |Print

Barclays raised its 2014 gold forecast to $1,250 per ounce from $1,205 on Wednesday, saying the change comes after taking into account gold’s year-to-date performance.
The bank maintained it has not altered its overall view on the yellow metal and believed gold’s next move will be lower as the macro background that could accelerate prices sustainably has not changed though investor sentiment has stabilised. It forecast gold prices at $1,150 for 2015…………………………………Full Article: Source

Commodities have outperformed this year, but oil prices may fall: Citi

Posted on 26 March 2014 by VRS  |  Email |Print

Commodities have mostly outperformed other assets by a wide margin so far this year, analysts at Citi said on Tuesday. Of the roughly 27 active contract markets that Citi regularly tracks, nearly 20 commodities show increases in value in the first quarter to date, but not all are destined to continue their rise.
A bar graph provided by Citi shows that among the commodities, coffee and lean hogs have seen the biggest price increases so far this year, while West Texas Intermediate crude has seen the least. Among the decliners, Brent crude saw the least amount of percentage losses, while iron ore saw the most……………………………….Full Article: Source

2014 year of commodities (March update)

Posted on 26 March 2014 by VRS  |  Email |Print

That 2013 was a year when equities ruled supreme is now well recorded history. Generally speaking, expectations at the end of the year were that 2014 would be more of the same. Among the popularly reported forecasts were the S&P 500 going to 2,000 while $Gold would plunge to $1,050.
While the calendar will ultimately decide the wisdom of those forecasts, reality is already casting doubt on them. Perhaps the numbers in those forecasts were inadvertently switched. Demand for Gold and Agri-Commodities seems to be the dominant factor for prices this year, even after taking into account unique supply situations in some cases. As the year continues to unfold, investor attitudes on commodities, and in particular Gold and Agri-Commodities, need to adapt to the reality of the situation. ………………………………Full Article: Source

Goldman Sachs: Gold’s rally won’t last

Posted on 24 March 2014 by VRS  |  Email |Print

Gold’s rally hasn’t convinced Goldman Sachs to change its bearish thinking on the precious metal. Gold has been one of the top performers across asset classes this year, up 11%, but Goldman says unsustainable catalysts have driven the rally. The firm doesn’t believe the recent gains are sustainable.
Three factors — weather-impacted U.S. economic activity, Chinese credit concerns and Ukraine tensions–have played a role in pushing gold prices higher in 2014. But Goldman sees these factors diminishing in the near future, which will prompt gold to tumble off current levels………………………………………..Full Article: Source

How bad are analysts at forecasting commodity prices? Really bad

Posted on 21 March 2014 by VRS  |  Email |Print

Over the last ten years, consensus has been the best at forecasting prices for aluminium, zinc and nickel and the worst at forecasting copper, iron ore, gold and silver. The average error over a 1 year time frame for aluminium has been 4%, and over a 2 year period 5%. For Zinc this is 2% and 4%, Nickel 5% and 3%.
By contrast, the error on the copper forecast has averaged -7% and -19% and iron ore -8% and -21% for 1 and 2 year horizons, respectively. This suggests that a counter consensus view on aluminium, zinc and nickel prices is unlikely to be the correct course of action, while it for copper and iron ore one has to be contrarian to stand any chance of being right………………………………………..Full Article: Source

How Big Data is relevant to commodity markets

Posted on 20 March 2014 by VRS  |  Email |Print

Everyday we generate enormous amounts of data through transactions in commodity markets. There have been many estimates of the quantity of data generated, the great hype of Big Data in 2014, and how firms should be investing in this area.
I want to take you through the example below and elaborate my perspective on Big Data in relation to commodity markets. Example: Let us consider the case of ethanol production, merchandising, and consumption. Ethanol can be produced petro-chemically or from agricultural feedstock, such as sugar or corn. The decision to produce ethanol is determined by two factors – revenues and costs of the ethanol business………………………………………..Full Article: Source

Next boom in commodities could be in agri products: Report

Posted on 19 March 2014 by VRS  |  Email |Print

The next commodities boom could be in the agriculture sector with middle class incomes boosting the demand for food items such as meat, dairy, sugar and edible oils, an HSBC report said. This could present investment opportunities in agriculture, it said.
“It may, in fact, be the case that food prices have the potential to outperform relative to metals and energy prices in the coming years, as growing middle class incomes continue to boost demand,” the HSBC Global Research said in its latest report………………………………………..Full Article: Source

OPEC, unlike U.S., raises 2014 global oil demand view

Posted on 13 March 2014 by VRS  |  Email |Print

World oil demand will increase more than expected in 2014, OPEC said on Wednesday, raising its prediction for a second straight month as economic growth picks up in Europe and the United States.
The view on oil demand growth from the Organization of the Petroleum Exporting Countries, source of a third of the world’s oil, contrasts with that of the U.S. government’s Energy Information Administration, which on Tuesday cut its forecast………………………………………..Full Article: Source

Value of world’s forest carbon could be undervalued by $800bln

Posted on 13 March 2014 by VRS  |  Email |Print

Edinburgh University’s Carbomap, an environmental survey company, has announced the completion of a three-dimensional carbon map of a forested region in Costa Rica and it reveals that the actual carbon content is 22% higher than published values using traditional satellite methods of measuring forest carbon.
Estimated using approved methodologies by the United Nations Framework Convention on Climate Change (UNFCCC), the global forest carbon stocks are understood to contain 638 billion tonnes of carbon, which may be valued at more than $3.8 trillion (using an average price of $6 per tonne of carbon)………………………………………..Full Article: Source

Global growth forecast to remain sluggish

Posted on 12 March 2014 by VRS  |  Email |Print

Global growth is likely to remain sluggish as a slowdown in the developing world undercuts gains in Europe and the United States, a leading international economic body warned Tuesday.
The Organization for Economic Cooperation and Development said one-off factors like the harsh winter weather in North America and the U.S. government shutdown mean “growth for the major advanced economies in the first half of 2014 will be somewhat slower than in the second half of 2013.”……………………………………….Full Article: Source

Morgan Stanley lowers gold price forecast for 2014, 2015

Posted on 11 March 2014 by VRS  |  Email |Print

Morgan Stanley lowered its gold price forecasts for 2014 on Monday, citing the impact of the US Federal Reserve’s reduction of stimulus along with mounting regulatory pressure on investment banks to scale back commodity operations.
Despite a falling US dollar gold price, legal Indian gold imports remain low, in contrast with strong Chinese physical gold demand, the note from Morgan Stanley said. The steep sell-off by ETFs in 2013 countered the cushion provided by strong consumer demand for gold, resulting in a decline in gold prices, the bank added………………………………………..Full Article: Source

Comparing today’s gold rally with 2009

Posted on 11 March 2014 by VRS  |  Email |Print

Every week, our investment team reviews a variety of sources to formulate a summary of the top events in the gold, resources, and emerging markets. The results are categorized in terms of strengths, weaknesses, opportunities and threats. We believe this SWOT model helps investors make informed decisions about their gold and gold stock investments.
The analysts at CIBC World Markets published an interesting note comparing the current 2014 rally with the rally in 2009, both of which were preceded by a 29-percent drop from the highs during those times. Equities have outperformed bullion by roughly 14 percent during this 2014 rally, still shy of the 32 percent outperformance during the 2009 rally………………………………………..Full Article: Source

Barclays ups 2014 crude oil prices above forecast

Posted on 04 March 2014 by VRS  |  Email |Print

Barclays raised its 2014 crude oil price forecasts on expected higher oil demand and investor interest levels, coupled with low inventory figures and high geopolitical risks. The bank raised its average WTI price forecast for 2014 to $99 per barrel from the earlier estimated $97, and its average 2014 Brent price rose to $106 per barrel from $105.
“Global supply trends have also been supportive recently,” the bank said, adding that the high level of OPEC outages have been “cushioning downward price pressure and supporting the economic viability of extra incremental US oil”………………………………………..Full Article: Source

World energy issues

Posted on 27 February 2014 by VRS  |  Email |Print

Each year, the World Energy Council releases its World Energy Issue Monitor and highlights what the global energy industry needs to consider when developing and expanding. Below are brief discussions of some of those issues.
Uncertainty surrounding the global climate framework is top on many priority lists. Negotiations around policies and carbon tax as well as involvement in initiatives such as the Kyoto Protocol is never certain. The time frame in which decisions will be made is also uncertain as each individual nation has different criteria they wish to fill………………………………………..Full Article: Source

UBS raises its gold forecasts

Posted on 21 February 2014 by VRS  |  Email |Print

Commodities remained in a holding pattern on Thursday ahead of a raft of economic data due out on Thursday, alongside a smattering of Fed speakers and, of course, the release of the minutes of the FOMC’s last policy meeting, which were due out in the evening.
West Texas crude futures were up by 17 cents to the $103.31/barrel level on the NYMEX. Three month LME copper futures slipped a tad, by 0.19% towards $7,181/metric tonne………………………………………..Full Article: Source

Commodities rise to 2014 high as Goldman maintains bearish view

Posted on 13 February 2014 by VRS  |  Email |Print

Commodities climbed to the highest since December as extreme weather fueled supply concerns for crops and energy at a time of rising imports by China. Goldman Sachs Group Inc. says this year’s gains will be short-lived.
The Standard & Poor’s GSCI Spot Index of 24 commodities gained 0.2 percent to settle at 636.22 yesterday, after touching 639.93, the highest since Dec. 30. Coffee led gains, and cocoa reached the highest since 2011. Gold capped the longest rally since June 2012………………………………………..Full Article: Source

Commodities back in favour, says ETF Securities

Posted on 13 February 2014 by VRS  |  Email |Print

Cyclical commodities, especially industrial metals were favoured by investors. Platinum, copper and silver were the top three individual picks with platinum coming out well on top with 31% choosing it as their favourite, followed by copper at 26%. Silver followed suit with an average of 15% choosing it as a top performer in 2014. Gold also saw strong interest (with 13%) concluding the metal is still seen as a hedge against potential growth and financial risks in 2014.
The results confirm earlier predictions that if global economic growth remains on track, commodity performance will follow. Platinum and silver exchange-traded products (ETPs) received the largest inflows in 2013 with $1.3 billion and $841 million respectively as investors shifted away from gold towards commodities more positively correlated with the global industrial cycle………………………………………..Full Article: Source

Commodity outpeformance may bring mixed fortunes for investors: Barclays

Posted on 04 February 2014 by VRS  |  Email |Print

Commodities have turned outperformers so far in 2014 compared to equities and other assets but this may be good news for some but painful for investors who have been switching exporsure out of commodities into other assets especially equities, according to a weekly report by Barclays.
The S&P500 is down 3% in the year-to-date, whilst both the DJUBSCI and the CRB index are both in modest positive territory and the S&PGSCI is down lees than one percent. Emerging market equities are weak with BRIC-40 having declined 8%. These nations account for 50% of commodity demand and hence this outperformance in commodities looks very robust in comparison, Barclays added………………………………………..Full Article: Source

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EY forecasts improvement in mining deals in 2014

Posted on 04 February 2014 by VRS  |  Email |Print

“The mining and metal sector is entering 2014 with a more positive outlook: confidence in the global economy is improving, companies have taken action to deleverage balance sheets and the industry-wide focus on productivity and efficiency should begin to yield results,” says consultancy EY.
In their report, EY mining analysts advised “…we expect the gradual strengthening of mining and metals equity valuations to continue and the increased availability of capital.” Nevertheless, the analysts cautioned, “As supply and demand struggle to return to post-supercycle equilibrium, we expect further price volatility to occur for at least the next two years. This will see caution prevail: any uplift in M&A activity and improvement of capital raising conditions will be gradual and will require innovation in pricing to tame volatility.”……………………………………….Full Article: Source

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Commodities poised for a comeback

Posted on 29 January 2014 by VRS  |  Email |Print

U.S. growth and a steadying Chinese economy are giving a boost to beaten-up commodities, slowing a multiyear slide that has weighed on Canada’s most important exports. Commodity prices have been on a downward slope for the better part of three years, as limping western economies and a slowing China curbed demand for raw materials.
More recently, however, signs of stability in key commodity-consuming regions have provided some optimism that the worst could be over. The widely watched Thomson Reuters-Jefferies CRB index of commodities has climbed 4 per cent from its recent low earlier this month. Natural gas has been a standout among commodities, surging about 25 per cent since early December………………………………………..Full Article: Source

Commodities expected to rebound: Scotiabank

Posted on 29 January 2014 by VRS  |  Email |Print

Gold prices are set to rebound in 2014 as commodity markets in general get a boost from the U.S. economic recovery and a more stable Chinese economy, says Patricia Mohr, commodities specialist at Scotiabank Capital Inc.
“While gold is vulnerable to further rounds of Fed tapering through 2014 (that is, reduced ‘liquidity’), chances are good that gold has bottomed,” Ms. Mohr said in her latest report to clients. “Gold is currently trading at US$1,261 (bid as a ‘safe-haven’ amid fresh emerging-market concerns) and should rally to US$1,375 in 2015, on prospects for higher inflation in the second half of the decade.”……………………………………….Full Article: Source

10 things to watch for in the commodities space

Posted on 29 January 2014 by VRS  |  Email |Print

Citi commodity research has come out with a report highlighting 10 areas that should be watched as they will have an impact on the world’s largest commodity consumer with 40 per cent market share. These factors could shape commodity prices and demand outlook in the coming months and years.
Environmental initiatives: Environmental pressures are in the spotlight as never before, particularly for coal and steel, where the strictest measures yet were implemented in 2013. There remains a lack of top-level direction, but mid-level officials have begun to push………………………………………..Full Article: Source

Global market forecasts 2014 for stocks, bonds, currencies and commodities

Posted on 29 January 2014 by VRS  |  Email |Print

Dear investor, Consider yourself warned. The global market outlook is far less rosy than the so-called experts would have you believe. Global stocks have set record highs, yet sentiment readings have hit off-the-charts extremes.
Gold, silver and bonds are in multi-year bear markets. Investors in major markets around the world are exposing their money to unprecedented (and mostly unknown) risks. Regional economies recently said to be “recovering” are slipping back into recession. And despite widespread excitement for stocks, Main Street is still struggling………………………………………..Full Article: Source

Commodity-driven economies are tanking

Posted on 28 January 2014 by VRS  |  Email |Print

Argentina, a commodity-driven economy that is facing all the negatives of weak commodity prices and poor economic policies, devalued its currency on the 23 January. The peso lost 15% against the dollar and Argentina’s central bank had to step in to stem the fall by selling from its depleted currency reserves. Argentina’s currency reserves have more than halved over the last one year.
Commodity-driven economies are under pressure, as they have not diversified to other streams to lower dependence on commodity exports for revenues. Economies from Brazil to Russia are really under pressure as their economic growth has fallen sharply on the back of lower commodity prices and on the back of China, the world’s largest consumer of commodities, seeing its economic growth come off from double-digit levels to 7.7% for 2013………………………………………..Full Article: Source

Commodities continue to underperform on supply pressures: Barclays

Posted on 27 January 2014 by VRS  |  Email |Print

Commodities continue to underperform despite some positive trends in global economy due to extended period of supply gains, according to Barclays Research. Commodities have been underperforming equities and pricing in below levels unwarranted by the uptick in industrial production, manufacturing indices and the business sentiment indicators.
The HSBC China flash Purchasing Managers Index (PMI) data and US Markit PMI has been below consensus but business confidence is set to be positive in January………………………………………..Full Article: Source

Gold will continue to face pressure

Posted on 24 January 2014 by VRS  |  Email |Print

The platinum group of metals holds promise this year for investors compared to gold or silver, according to the London Bullion Merchants Association’s (LBMA) annual forecast. Over 25 analysts, taking part in a poll for the forecast, have said gold and silver will continue to face pressure, while platinum and palladium will average higher than last year.
Gold, which dropped 25 per cent last year, is seen heading lower mainly on the US Federal Reserve tapering its stimulus programme. The Fed, which has already cut the programme to boost US economy to $75 billion a month, is likely to review the stimulus at the open market committee meeting during January 28-29………………………………………..Full Article: Source

Gold near bottom in 2014; nurses biggest loss in 32 years

Posted on 22 January 2014 by VRS  |  Email |Print

Gold in 2014 will not push much lower from current levels around $1,250, although investors hoping last year’s 28 per cent battering will bring a bounce back face disappointment, consensus estimates in a Reuters poll show.
Gold last year hit its lowest since August 2010 at $1,180.71 an ounce. That blew away expectations of analysts polled this time last year, who had forecast a modest 6 per cent rise from 2012’s average……………………………..Full Article: Source

Gold analysts most bearish since 2002

Posted on 22 January 2014 by VRS  |  Email |Print

Gold analysts are more bearish than at any time since 2002 and expect an average price of $1,219 a troy ounce this year, according to a survey of industry forecasts by the London Bullion Market Association (LBMA).
The modest forecast price – lower than the spot price of $1,240 on Tuesday afternoon – is a reflection of the dismal recent performance of the yellow metal. After 12 consecutive years of price rises, gold tumbled nearly 30 per cent in 2013 amid a sell off in gold-backed exchange traded funds……………………………..Full Article: Source

LBMA survey: Gold, silver seen flat in 2014; PGMs expected to rise

Posted on 22 January 2014 by VRS  |  Email |Print

Analysts taking part in the annual London Bullion Market Association survey look for gold and silver prices to be “broadly flat” in 2014 but look for “modest” increases in platinum group metals, the organization said Tuesday.
Collectively, participants in the survey look for gold to average $1,219 an ounce in 2014, which would be 0.9% lower than the first week of the year, the LBMA said. Gold closed 2013 at $1,201.50 an ounce, which was 28% lower than the first week of 2013 and ended 12 consecutive years of price growth. The average forecast range for 2014 was listed at $1,067 to $1,379……………………………..Full Article: Source

Commodities market awaits flow of positive macro data

Posted on 20 January 2014 by VRS  |  Email |Print

In the first fortnight this year, gold has demonstrated surprising resilience. Prices have rebounded from the low $1200s of the year-end. Will the trend continue or is it a temporary blip in an otherwise falling market?
With global economic growth showing signs of revival under lead of the US, will investors turn more positive towards base metals? China is the mover and shaker of the global commodity market. If China sneezes, the market catches cold………………………………………..Full Article: Source

Forget Mideast turmoil—oil moving lower: Analysts

Posted on 16 January 2014 by VRS  |  Email |Print

Despite ongoing and unpredictable turmoil in the Middle East, analysts say oil is heading lower in 2014. Over the last several weeks, crude has been whipsawed by conflicting expectations out of the Middle East: Iran is seen as potentially increasing exports as it reaches a deal that curbs its nuclear ambitions, but at the same time, instability in Iraq and Libya have knocked more than 1 million barrels per day (bpd) of oil offline.
Regardless of whether violence in the Middle East takes a toll on supply, analysts say structural factors argue against crude moving higher from current levels. With or without the addition of Iranian supply, production elsewhere is expected to remain fairly consistent………………………………………..Full Article: Source

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IMF: Silver-linings over commodity price clouds

Posted on 15 January 2014 by VRS  |  Email |Print

The IMF’s latest forecast of commodity price outlook shows the global economy is unlikely to see a quick revival in 2014. Futures markets show most commodity prices remaining flat or declining over the next 12 months, with the exception of gasoline, natural gas and some food products, IMF said in the report.
Going by the latest commodity price trends, it is likely that global GDP growth rates may fall short of IMF’s October forecast of 3.6% for 2014. But there is some good news for India. First, IMF forecast oil prices, both WTI and Brent, are expected to decline due to an expected rise in non-OPEC supplies, and possible recovery from outages in OPEC nations………………………………………..Full Article: Source

JPMorgan commodity risk higher in fourth-quarter

Posted on 15 January 2014 by VRS  |  Email |Print

JPMorgan Chase & Co slightly raised its commodity trading risk for the first time since last spring in the fourth quarter, even as it exits the physical commodities trading business, its quarterly results showed on Tuesday.
Value-at-Risk (VaR) in commodities at JPMorgan, the largest U.S. bank, rose to $15 million in the fourth quarter, from $13 million, unchanged during the previous two quarters, and up $1 million from the fourth quarter of 2012. VaR is the most that can be lost on 95 percent of trading days within a given period………………………………………..Full Article: Source

Commodities super cycle over, says Goldman Sachs

Posted on 15 January 2014 by VRS  |  Email |Print

The “super cycle” that sent commodity prices climbing nearly four-fold over a 10-year period is reversing and raw materials are now in a structural bear market, according to Goldman Sachs.
In a report uploaded on Sunday last, the bank writes that expansion of US shale oil production will suppress energy prices, bolstering economic growth and leading to more QE tapering. As a result, emerging market currencies will depreciate further, encouraging growth in raw materials production in those countries………………………………………..Full Article: Source

BMO lowers 2014 gold forecast to $1,250, cites stronger dollar

Posted on 15 January 2014 by VRS  |  Email |Print

A stronger U.S. dollar will weigh on gold values in 2014, BMO Capital Markets said in a research note on Tuesday, lowering its average gold forecast price to $1,250 an ounce from $1,275. BMO left its 2014 forecasts for silver and platinum unchanged. For 2015, it raised its forecasts for silver and palladium, but left gold and platinum unchanged.
The firm said it hiked its 2015 silver forecast “to reflect stronger (industrial) demand expectations from the U.S., as well as further cuts to mine supply forecasts from primary operations.” BMO upwardly revised its 2014 palladium forecast, saying mid- to long-term prices reflect a significant deficit market and it wants to retain a two times platinum to palladium ratio………………………………………..Full Article: Source

Gold price to go up 50pct

Posted on 15 January 2014 by VRS  |  Email |Print

Goldcorp forecast that the company’s gold production will grow by 13-18 per cent this year to between three million and 3.5 million ounces. In a press release issued, the Mexican mining company with concessions across South America predicted gold production would increase by 50 per cent over the next two years along with a reduction in an all-in sustaining cost of 15-20 per cent during that period.
For 2014, the company estimates that all-in sustaining costs will decrease to between $950 and $1,000 per ounce, compared to $1,065 per ounce in 2013. “Decreasing costs are expected to be driven by increasing grades and by-product production, lower costs of production Goldcorp’s continued overall focus on cost efficiencies through the Operating for Excellence programme,” said Goldcorp………………………………………..Full Article: Source

Commodity market increased in December due to positive fundamentals

Posted on 14 January 2014 by VRS  |  Email |Print

Commodities were higher in December due to positive fundamentals supporting the energy and industrial metals sectors. Nelson Louie, Global Head of Commodities in Credit Suisse’s Asset Management business, said, “The 2014 global economy looks to be the most orderly in several years, centering on modest yet stable growth. We expect global growth to accelerate gradually in 2014, with most of the pick-up occurring in developed market economies, narrowing the growth gap with the Emerging Markets. We believe this steady uptick in growth may be beneficial to commodities.”
Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, “Amid macroeconomic improvements in the US and abroad, correlations between commodities and traditional asset classes have been decreasing. We expect individual commodities to continue to be increasingly driven by fundamental factors rather than macroeconomic headlines. While broad macroeconomic trends continue to be important, they will likely impact asset classes in different ways. We continue to expect commodities to provide valuable diversification benefits going forward………………………………………..Full Press Release: Source

Optimistic outlook for NZ commodities

Posted on 14 January 2014 by VRS  |  Email |Print

Analysts are predicting a positive outlook for New Zealand-produced agricultural commodities in 2014 as demand continues to outstrip supply of dairy, beef and wool.
Milk powder prices should hold up “pretty well” this year and any significant easing would not occur until the second and third quarters of 2014, Rabobank director of dairy research Hayley Moynihan said. “Our commodity price in US dollars still has whole milk powder sitting at US$4500 per tonne by the time it gets to the third quarter of the year.”……………………………………….Full Article: Source

Gold to tank in 2014: Goldman Sachs

Posted on 14 January 2014 by VRS  |  Email |Print

Bad news for “gold-bugs”—bullion’s current beginning-of-the-year rally will not only lose steam, but prices could drop sharply by the end of 2014, according to Goldman Sachs’ Jeffrey Currie.
Currie, Goldman’s head of commodities research, told CNBC on Monday he had an end-of-year price target of $1,050 per ounce for gold, a 16 percent drop based from current prices of $1,251. The main culprit? Economic recovery………………………………………..Full Article: Source

Uranium bull market to gather steam over next 18 months - Scotiabank

Posted on 14 January 2014 by VRS  |  Email |Print

Scotiabank analysts are bullish uranium. They have been for some time. As we noted in early 2013, Patricia Mohr, Scotiabank’s vice-president economics and commodity market specialist, made the case that uranium prices, decimated by the 2011 Fukushima Dai-Ichi nuclear disaster, would rebound mid-decade.
It’s not a position that has changed. In her latest commodities report on December 19, 2013 she labelled uranium a “turnaround story” for the mid-2010s. Her thesis - as outlined at the AME BC Roundup conference last year - is heavily contingent on three factors:……………………………………….Full Article: Source

Barclays raises 2014 zinc, copper price outlook on higher demand

Posted on 14 January 2014 by VRS  |  Email |Print

Barclays on Monday raised its zinc and copper price forecasts for 2014 citing improved demand outlook for the industrial metals. The bank sees zinc at $2,138 per tonne in 2014 and forecasts copper at $7,125 per tonne this year, it said in a note.
“We expect the global refined zinc surplus to shrink markedly this year and for the market to move into its first deficit in almost a decade in 2015,” it said. Barclays said it expects copper to move into surplus in 2014, weighing on prices, though it said the surplus would likely be small and short-lived. ……………………………………….Full Article: Source

New year may prove positive for commodities

Posted on 13 January 2014 by VRS  |  Email |Print

For a major part, the year 2013 was characterised by several uncertainties covering global economic growth, geopolitics, monetary policy, currency dynamics and weather.
Mercifully, the current year has begun with a somewhat clearer picture. Although still not really back to trend, global economic growth has begun to gather momentum under the lead of the US. Geopolitical tensions stand substantially reduced although there is always an undercurrent of uncertainty………………………………….Full Article: Source

Hermes sees commodities returning most in four years on growth

Posted on 10 January 2014 by VRS  |  Email |Print

Commodities will gain the most since 2010 this year and climb at a faster pace next year as the global economy strengthens, Hermes Fund Managers Ltd. said.
The Standard & Poor’s GSCI Total Return Index of 24 commodities will rise 2.7 percent this year and 6.7 percent in 2015, Hermes said in a report today. While it expects gold to remain under pressure, platinum and palladium “look more attractive” and sugar should rebound later this year, it said……………………………..Full Article: Source

EIA: Global oil demand to rise 1.2 million b/d in 2014

Posted on 09 January 2014 by VRS  |  Email |Print

Global liquid fuels consumption is forecast to increase by 1.2 million b/d in 2014 and by another 1.4 million b/d in 2015, according to the US Energy Information Administration’s Short-Term Energy Outlook (STEO), released this month.
Countries outside of the Organization for Economic Cooperation and Development, led by China, account for nearly all consumption growth over the forecast period, EIA said. OECD consumption is expected to decline by 0.1 million b/d in 2014 and remain flat in 2015………………………………………..Full Article: Source

Moody’s drops gold price assumption to $1,100 an ounce

Posted on 09 January 2014 by VRS  |  Email |Print

A major ratings agency says the credit worthiness of several Canadian miners is under threat as it lowers its forecast of where it expects gold prices to be for the next several years to $1,110 US an ounce. Moody’s has reduced its assumption for the average price of gold and silver in 2014 and beyond to $1,100/oz and $18/oz, respectively. Both figures are about 10 per cent below previous expectations.
After peaking at over $1800 an ounce in 2012, gold prices have steadily declined, with the spot price dropping by 30 per cent last year alone. Gold miners spent heavily seeking out new production when prices were high, and are now saddled with high costs for those projects even as their revenue declines because of the lower price………………………………………..Full Article: Source

Miners’ credit ratings at risk as Moody’s cuts gold price forecast

Posted on 09 January 2014 by VRS  |  Email |Print

Moody’s Investors Service will use a lower gold price on which to base its ratings of producers of the precious metal. Delivering another blow to the struggling gold industry, the credit rating agency said it will now use $1,100 (U.S.) an ounce instead of $1,200 to reflect the significant deterioration in gold prices.
Last year’s 30-per-cent drop in bullion to around $1,200 an ounce triggered gold producers to overhaul operations, write down assets, cut jobs, and suspend dividends and projects. The move puts the credit ratings of Canada’s largest gold producers in jeopardy………………………………………..Full Article: Source

Citi not bullish on gold’s outlook

Posted on 09 January 2014 by VRS  |  Email |Print

Citi is not bullish on gold at this stage. The early signs of growth in Europe, the pickup in growth in the U.S. and the improvement in global economy suggest that people are becoming more risk seeking. Hence in all probabilities, they may shed their gold holdings, which normally are considered as defensive bet.
According to Citi data, FII flows slowed across Emerging Markets. At this point, FIIs prefer Developed Markets over Emerging Markets. The global firm also believes that flows into India will be slow when compared to relative markets………………………………………..Full Article: Source

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