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Commodity prices collapse to lowest in 12 years

Posted on 30 January 2015 by VRS  |  Email |Print

The Bloomberg Commodity index, which tracks the global prices of 22 different commodities such as gold and oil, collapses to lowest level since August 2002. The world’s leading index of commodity prices has slumped to its lowest level in more than 12 years as China slows and America hints at tightening monetary policy.
The Bloomberg Commodity index, which tracks the prices of 22 different commodity prices such as gold, natural gas and oil, fell 0.3pc to 99.84 in early trading, the lowest point since August 2002………………………………………..Full Article: Source

Will commodity continue to slide?

Posted on 29 January 2015 by VRS  |  Email |Print

Bloomberg Commodity Index has declined by 28% from April 2014 till date. Commodities were underperformers last year while the same is expected to continue this year. The Bloomberg commodity index is hit hard by tumbling oil prices followed by metals. The fall in oil started with geo political concerns in Middle East dragging prices from the high of $115 to $70.
With falling oil prices to its lowest level OPEC continues to stand on its production cost which made it eventually weaker, quoting at $45 per barrel, at six year low Metals faltered on the back of slow down in China. China which is Worlds second largest economy and largest consumer of metals was hit hard in manufacturing sector which came below the level 50 separating it from expansion and contraction………………………………………..Full Article: Source

Copper Rises

Posted on 29 January 2015 by VRS  |  Email |Print

Copper rose for the second time in three days amid speculation that the metal’s slump to a five-year low will encourage miners to reduce output, pointing to tighter supplies. Freeport-McMoRan Inc., the world’s largest publicly traded producer, said this week it expects to spend about 20 percent less on mining and energy projects this year than forecast in October.
Rio Tinto Group, the second-biggest global mining company, said Jan. 20 its production of the metal fell in the three months through Dec. 31. Copper prices are trading near the lowest since 2009………………………………………..Full Article: Source

Goldman Downgrades Commodity Outlook as Energy, Metals Tumble

Posted on 28 January 2015 by VRS  |  Email |Print

Goldman Sachs Group Inc. downgraded its three-month commodity outlook to underweight as mounting global supply gluts sent energy and metals prices tumbling this year. There is a greater risk that raw material prices may drop in the near term than rise, Goldman strategists and analysts including Christian Mueller-Glissmann, Peter Oppenheimer and Jeffrey Currie wrote in a research report.
The Bloomberg Commodity Index of 22 components reached a 12-year low this week, with crude oil, hogs and copper leading losses in 2015. Inventories of grains, metals and energy are rising after a decade-long bull market for commodities spurred miners, drillers and farmers to increase production………………………………………..Full Article: Source

Russia buys more gold reserves, Netherlands steady

Posted on 28 January 2015 by VRS  |  Email |Print

Russia extended its buying spree of gold to a ninth straight month, and the price of gold rose for the first time in five months, data from the International Monetary Fund showed on Tuesday. The global financial institution later on Tuesday confirmed the Netherlands did not increase its bullion holdings in December, contrary to the IMF’s earlier report that the bank had raised gold holdings for the first time in 16 years.
The Dutch central bank, the world’s ninth-biggest official sector gold holder, has kept its holdings unchanged since late 2008. The bank earlier on Tuesday denied that it bought more gold last year………………………………………..Full Article: Source

Commodities Signaling Global Growth Warning

Posted on 27 January 2015 by VRS  |  Email |Print

Commodities across the board are signaling there are major risks to global growth. Whether it is copper hitting a 5-and-a-half year low, or oil or even soft products, grains and meats, it is clear that commodities are sending clear economic warning signs. Now we have the results of the Greek election, with the anti-austerity party Syriza taking power, as well as the failure of peace talks in Ukraine and a Russian offensive that will no doubt bring more growth slowing sanctions.
Don’t just blame the dollar for commodity weakness; it is what the dollar is saying about growth in the rest of the world that really matters. Crude closed near a 6-year low on Friday as King Salman of Saudi Aribia, in his first kingly proclamation, assured the markets that there would be no change in oil ministers or oil policy. What that means is OPEC price war continues………………………………………..Full Article: Source

Will Global Commodities Reverse the Crunch of 2014 Final Quarter?

Posted on 27 January 2015 by VRS  |  Email |Print

In analyzing the global fourth quarter crash of the commodity markets, it has become quite obvious that the bulk of the un-natural depth of the slump was caused by a desperate attempt by Saudi Arabia to undercut the incredible growth of America’s hydraulic fracturing, which had added a million barrels a day throughout 2014.
While $100 per barrel had become a stable target for most of 2013 and the first eight months of 2014, the sudden crash right after Labor Day was no coincidence. Although a $30 per barrel low of crude oil for both foreign Brent crude and domestic West Texas Intermediate (WTI) had been expected in the depths of the great financial recession in March 2009, this was a far cry from the relatively moderate supply/demand imbalance that ostensibly caused the “halving” of oil prices in 2014’s last four months………………………………………..Full Article: Source

Oil Is Never Going To Reach $200, Not For Any Length Of Time At Least

Posted on 27 January 2015 by VRS  |  Email |Print

We’ve two interesting announcements from various players in Opec today, one that the oil price might have hit bottom just at the moment and the second that oil might reach $200 at some point in the future. It’s possible that oil might have reached bottom: but the idea that oil will ever reach $200 a barrel in real terms for any significant length of time is extraordinarily unlikely.
It’s as if people really still don’t get the deep economic change that has happened in the oil market as a result of the fracking revolution. We are simply no longer in a world where the development of an oil field is a tens of billions of dollars problem taking a couple of decades to bring to fruition. Because we’re no longer in that world we’re simply not going to end up with the sort of supply and demand mismatches that could lead to a $200 oil price………………………………………..Full Article: Source

As Commodities Fall, Some Investors See Reasons to Buy

Posted on 26 January 2015 by VRS  |  Email |Print

A few brave investors are betting the gloom oppressing global commodity markets is on the verge of lifting. The world’s farmers, mining companies and oil producers spent billions of dollars over the last decade to increase output. The result: huge surpluses and sharply lower prices for commodities ranging from oil to sugar to iron ore.
The magnitude of the decline has exceeded the expectations of the vast majority of investors and analysts. The Bloomberg Commodity Index, tracking 22 commodities, fell for a fourth straight year in 2014 and is down 3.1% this year. But some investors see the seeds of a recovery in daily reports of plunging prices. They are buying some of the hardest-hit commodities, in a bet that low prices will quickly force producers to cut back, erasing the global surpluses behind the multi-year slide………………………………………..Full Article: Source

Hedge Funds Bet Oil Has Further to Fall as Glut Grows: Energy

Posted on 26 January 2015 by VRS  |  Email |Print

Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001. Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks.
U.S. crude supplies rose by 10.1 million barrels to 397.9 million in the week ended Jan. 16 and the country will pump the most oil since 1972 this year, the Energy Information Administration says………………………………………..Full Article: Source

All of the major commodities may fall in price this year, World Bank says

Posted on 23 January 2015 by VRS  |  Email |Print

This year could mark the rare occurrence when all of the nine major commodity price indexes decline, according to a World Bank forecast released Thursday. The latest report on commodities comes at a time when oil prices have seen a 55% drop over the past seven months, only topped by the 75% drop during the Great Recession, and the 67% drop from November 1985 to March 1986.
John Baffes, senior economist in the World Bank’s development prospects group, says he hasn’t seen a decline in all of the major commodities simultaneously in at least the past 12 years. Though changes in index composition make comparisons difficult, the last time there was the simultaneous decline could have been the Asian financial crisis or the downturn in 1984 and 1985………………………………………..Full Article: Source

How Low Can Oil Go? And When’s It Going Back Up?

Posted on 20 January 2015 by VRS  |  Email |Print

What a difference a year makes. In January 2014, Goldman Sachs said it did not “expect a material collapse in oil prices,” citing Saudi Arabia’s preference for prices of around $100 per barrel, and the country’s position on being ready to cut production to support those levels. One year later, crude prices are hovering around $50 a barrel and the Saudi Arabia-led Organization of the Petroleum Exporting Countries has repeatedly declined to cut the supply.
Consequently, Goldman slashed its 2015 oil price forecasts last week, predicting that “this bear market will likely be characterized by more of a U-shaped recovery and will likely rebound to far lower price levels from where they sold off.”……………………………………….Full Article: Source

Commodities Are Pulling Chile And Brazil Lower

Posted on 19 January 2015 by VRS  |  Email |Print

For much of the past several months, investors have been keeping a close eye on plunging commodity prices and trying to decipher how lower prices will influence the value of their investments. South America is rich in oil and base metals, commodities that have been particularly hard hit recently, and the region is popular for investors interested emerging markets.
In the article below, we’ll take a look at several key exchange traded funds (ETFs) that are used by traders to track the performance of primary South American markets and see if the bottom is priced in or whether the momentum will continue to send prices lower………………………………………..Full Article: Source

Why commodity exporters may get a tailwind

Posted on 19 January 2015 by VRS  |  Email |Print

Conventional wisdom suggests commodity exporters will take price declines on the chin, but Morgan Stanley expects they’ll benefit most. It’s all about curing the Dutch Disease, Morgan Stanley said in a note last week, referring to the negative economic impact of increasing natural resources investment at the expense of other sectors.
“If left uncured, the net effect is usually a decline in productivity that tends to hurt growth over longer periods,” the bank said. “Commodity exporters face a difficult transition, some a recession, and even after that, a few could lapse back into mediocre growth and low productivity,” it said………………………………………..Full Article: Source

Latin America 2015 outlook darkens as commodities sink

Posted on 16 January 2015 by VRS  |  Email |Print

Latin America has embarked on a painfully long period of greater austerity, and lower commodity prices and economic growth will barely pick up speed this year, a Reuters poll found Thursday. With nose-diving oil and metal prices weighing on government finances and jeopardising investments, economists in the quarterly poll chopped 2015 growth forecasts again for the region’s seven largest countries, from Mexico to Argentina.
Brazil is now expected to grow a meager 0.5 percent in 2015, down from an estimate of 1.1 percent in the prior survey and barely up from an expected 0.2 percent growth in 2014………………………………………..Full Article: Source

2015 Oil and Gas Trends

Posted on 16 January 2015 by VRS  |  Email |Print

Leave the worrying about the highs and lows of oil prices to obsessed analysts and headline writers. That volatile aspect of the energy business is largely out of the control of industry leaders. Instead, oil and gas companies (producers or refiners) whose strategic future is still a puzzle should be asking a couple of simple questions, mostly divorced from the cost of oil:
Where do we go to lock in demand? Are we prepared to thrive in a business environment that is oversupplied? If both questions are adequately — and, in some cases, fearlessly — addressed, oil and gas companies should be able to forge a pathway for success, no matter how uncertain the prices for their products………………………………………..Full Article: Source

This is Why Trees Come Down When the Gold Price Goes Up

Posted on 16 January 2015 by VRS  |  Email |Print

A new study establishes a connection between demand for gold and deforestation. The steep rise in the price of gold is a factor in the heightened rate of deforestation in South America, a new study has found.
The study, conducted by researchers from the University of Puerto Rico, says small-scale miners now find it profitable to try and extract the metal from low-grade seams underneath the region’s rain forests………………………………………..Full Article: Source

Oil Continues Down Its Slippery Slope: Where’s The Bottom?

Posted on 15 January 2015 by VRS  |  Email |Print

A fundamental shift is underway in the energy complex. The price of oil, as measured by West Texas Light Sweet Crude, has fallen from its most recent high near $107 per barrel in late June of last year, to a current level under $47. This represents a decline in excess of 55%. What’s causing this most precious commodity to plummet?
Perhaps more importantly, where’s the bottom of the barrel for crude? In this article, we’ll look at a the factors behind the slide and explore a more clandestine point of view. On August 25, 2014, the 50 day exponential moving average on oil fell below the 200 day moving average, marking what technical analysts refer to as the death cross………………………………………..Full Article: Source

Is a global economic recession coming? Copper price say ‘yes’

Posted on 15 January 2015 by VRS  |  Email |Print

The market for copper, a metal that two years ago was being stolen by thieves looking for big profits, is crashing – the latest in a string of commodities nosedives that have experts worried about the broader implications for the global economy. The copper market crashed overnight to its lowest level since the middle of the financial crisis in 2008, fueling fears that the global economy is slowing more sharply than many experts had anticipated.
Wednesday’s drop is the sixth consecutive decline in copper prices. Currently trading at around $5,560 a ton, the prices are causing significant pain to mining companies like Glencore, whose stock responded to the copper crash by hitting a record low………………………………………..Full Article: Source

Why the extremes in the commodities complex?

Posted on 14 January 2015 by VRS  |  Email |Print

Another morning of extremes, at least in the Treasury and commodity complexes. 10-year bond yields are at 18-month lows. Gold touched a 12-week high. Oil plumbed a nearly 6-year low. Copper is down another 2.5 percent at a 5.5-year low, with similar weakness in Nickel and Zinc. Aluminum has also fallen 1.4 percent.
The drop in copper comes despite good news out of China, where December exports rose 9.7 percent year over year and imports contracted 2.4 percent, both better than expected. However, total Chinese trade increased only 3.4 percent in 2014, well short of the 7.5 percent goal. China should release its annual GDP figure for 2014 next week………………………………………..Full Article: Source

Oil Prices And The Significant, Long-Lasting Impact On The Economy

Posted on 14 January 2015 by VRS  |  Email |Print

In 2014, a number of events will go down in history as major, market-moving events. From an economic viewpoint, though, perhaps no other event will have a more significant and long-lasting impact than the collapse of oil prices. At this time last year, oil was trading well above $100 per barrel. Last week, the price of a barrel of West Texas Intermediate oil traded at less than $50.
Over the years, oil prices have fluctuated. The last two major oil price declines were driven by central bank policy errors – monetary contractions which led to global economic recessions. During an economic recession, the world economic activity contracts and demand for oil declines. When demand for any commodity contracts, prices decline………………………………………..Full Article: Source

Market doomsayer Marc Faber: Gold will rally 30% in 2015

Posted on 14 January 2015 by VRS  |  Email |Print

Gold has absorbed its fair share of the commodities-market blows in recent years, but now is the time to move back into the precious metal, according to superbear Marc Faber. “I’m positive [that] gold GCG5, -0.03% will go up substantially [in 2015] — say 30%,” Faber, whose investment letter is called the Gloom Boom Doom Report, said at Société Générale’s global strategy presentation in London on Tuesday.
“My belief is that the big surprise this year is that investor confidence in central banks collapses. And when that happens — I can’t short central banks, although I’d really like to, and the only way to short them is to go long gold, silver and platinum,” he said. “That’s the only way. That’s something I will do.”……………………………………….Full Article: Source

The Economic Impact Of Falling Oil Prices: ‘Expansionary Disinflation’

Posted on 13 January 2015 by VRS  |  Email |Print

Forget about the “secular stagnation” theory of an ailing U.S. economy. Accordingly to the Labor Department, payrolls grew at a seasonally adjusted increase of 242,000 in December adding to the soaring U.S. job growth of 2014 which represents the strongest annual job creation since 1999. The unemployment rate also fell to 5.6% in December, down from 7% a year earlier and far below predictions made by economists at the beginning of 2014.
In addition, the past 2 quarters of GDP growth have been well above an annualized 4%. What complicates this rosy picture however for the Federal Reserve and its dual mandate is that core CPI inflation has fallen to 1.3%, well below the Fed’s 2% target and will likely continue to fall given the recent significant decline in the price of crude oil, an input to several products included in core inflation………………………………………..Full Article: Source

Why Africa is becoming less dependent on commodities

Posted on 12 January 2015 by VRS  |  Email |Print

For decades commodities have shaped Africa’s economic growth. When prices were high, growth was good; when prices dipped, so did the continent. But that is slowly changing. Despite big commodity-price falls this year—oil is down by 50%—the continent will probably grow by 5% in 2015 (and more in the following years). While lots of African currencies lost value in 2014, they have performed much better than during other periods when commodity prices were falling.
Few African countries will fall into recession in 2015—unlike other commodity exporters such as Russia and Venezuela. Why is Africa doing better than many expected? Two reasons stand out. First, the continent’s economic growth is coming from other places. Governments have worked hard to make life easy for investors. Second, many African governments are better at managing the inevitable booms and busts of commodity markets………………………………………..Full Article: Source

Commodities Fall as Stockpiles Mount Up

Posted on 12 January 2015 by VRS  |  Email |Print

Two years ago, Daniel Nilsson ’s family bought a hotel in the town of Pajala, Sweden, some 50 miles above the Arctic Circle. The nearby Kaunisvaara iron-ore mine had just started production, and the Nilssons installed new meeting facilities and revamped the nightclub. “We wanted to give the locals and the people working in the mines a great hotel to come to,” said Mr. Nilsson, its 28-year-old manager. “That’s why we bought it—we saw a future for it.”
But the price of iron ore sank last year, and with it the Lapland River Hotel’s fortunes. In October, the mine’s owner, Northland Resources , stopped operations. Two months later, Northland filed for bankruptcy………………………………………..Full Article: Source

Commodity prices face more pressure as China’s growth to fall

Posted on 12 January 2015 by VRS  |  Email |Print

Prices for iron ore and other commodities exposed to China’s building sector will remain under pressure this year as construction falls and the Chinese government holds firm in its push to become a more services-orientated economy, a leading economist has warned.
Ahead of UBS’s annual conference beginning in Shanghai today, the bank’s chief economist for China, Wang Tao, said the ­nation’s property construction “adjustment” would continue this year as developers lighten inventories to improve cashflow………………………………………..Full Article: Source

Most developing countries will benefit from oil price slump

Posted on 12 January 2015 by VRS  |  Email |Print

Gains from low oil prices can be substantial for developing-country importers if supported by stronger global growth, says a World Bank Group analysis of the oil price decline, contained in the latest edition of Global Economic Prospects.
The decline in oil prices reflects a confluence of factors, including several years of upward surprises in oil supply and downward surprises in demand, receding geopolitical risks in some areas of the world, a significant change in policy objectives of the Organization of the Petroleum Exporting Countries (OPEC), and appreciation of the U.S. dollar. Although the relative strength of the forces driving the recent plunge in prices remains uncertain, supply related factors appear to have played a dominant role………………………………………..Full Article: Source

Ten things to watch in commodities in 2015

Posted on 09 January 2015 by VRS  |  Email |Print

From Opec to Glencore, the outlook for the year ahead. Commodities as an asset class: Making long-only investments in commodity futures came into vogue about a decade ago, based on the premise that they offered inflation protection and equity-like returns without being correlated to stock markets.
On that score, this premise has certainly held true: with inflation modest, the Bloomberg Commodity Index has dropped 27 per cent in the past five years in an unflattering lack of correlation with soaring equities. Watch for more portfolio managers throwing in the towel on commodity indices and virtual silence in world capitals about problems caused by speculators………………………………………..Full Article: Source

Dependency on commodities

Posted on 09 January 2015 by VRS  |  Email |Print

Commodities are sirens: alluring, yet dangerous. When prices are high, politicians in commodity-exporting countries rejoice. Proceeds from the export of oil, gas and metals fill state coffers. Foreign cash floods in and well-paid jobs are created. Such countries’ governments often neglect other parts of the economy, believing that the good times will never end. But they always do.
As commodity prices tumble, many countries are learning what happens when an economy is too reliant on natural resources. Venezuela, with the world’s largest oil reserves, is on the verge of defaulting. Brazil and Norway, two other big oil exporters, have seen their growth forecasts cut. The Russian president, Vladimir Putin, will watch his economy shrink by 5% in 2015, according to central-bank estimates. His government’s debt is likely to be downgraded to “junk” status………………………………………..Full Article: Source

The long shadow of the commodity bust

Posted on 08 January 2015 by VRS  |  Email |Print

The commodity boom of the past decade had all the hallmarks of a typical bubble: massive retail participation (through ETFs, mutual funds etc…), large pension fund involvement, a widespread belief that ‘this time, things were different’ and that a ‘commodity super-cycle’ was unfolding.
But like all bubbles, this one too has come to an end. There were plenty of potential triggers in the shape of (i) the Federal Reserve’s decision to stop printing money; (ii) China’s slowdown and associated anti-corruption drive which means that managers at state firms have no incentive to bid up commodity-producing assets;……………………………………….Full Article: Source

Australia trade deficit widens as commodities drop

Posted on 07 January 2015 by VRS  |  Email |Print

Australia’s trade deficit widened in November from October as falling prices for key resources such as iron ore overshadowed rising commodity export volumes as mining companies continued to ramp up production.
The seasonally adjusted trade deficit widened to A$0.93 billion from a revised A$0.88 billion in October, according to the Australian Bureau of Statistics. It is the eighth trade deficit in a row. Economists had been expecting a shortfall of A$1.6 billion in November………………………………………..Full Article: Source

Not just oil: Are lower commodity prices here to stay?

Posted on 07 January 2015 by VRS  |  Email |Print

Oil isn’t the only commodity that’s gotten cheaper. From nickel to soybean oil, plywood to sugar, global commodity prices have been on a steady decline as the world’s economy has lost momentum. That lower demand helps explain, in part, why nearly everything from crude oil to cotton has been getting cheaper.
Sure, some commodity prices are rising. Local supply constraints have pushed prices higher in some parts of the world; transportation costs can also have a big impact on local prices. In the U.S., for example, a drought in California caused the price of vegetables and other food products to spike last year………………………………………..Full Article: Source

Why China couldn’t corner the market on high-tech metals

Posted on 07 January 2015 by VRS  |  Email |Print

Despite controlling some 70% of production, China has quietly conceded its inability to control the market for rare earth elements, which are used in a variety of high-tech devices and manufacturing processes.
China’s announcement that it will end export quotas on the elements comes after an August WTO finding that the limits violated global trade rules. But the real nail in the coffin was the power of the market: China didn’t appeal the decision because the quotas did little to affect the market for the metals………………………………………..Full Article: Source

Commodities fall biggest since 2008

Posted on 06 January 2015 by VRS  |  Email |Print

Commodity prices suffered their greatest fall in six years in 2014 and dealt a hit to the Australian economy, but there is scope for optimism. Multinational bank HSBC has calculated that commodity prices fell 30 per cent in 2014, with oil’s plunge the biggest driver. The price falls are reducing Australia’s export earnings by tens of billions of dollars.
The news is not all bad, with HSBC predicting a slight recovery this year for iron ore, the nation’s most valuable export, and extra income from the ramp up in natural gas exports………………………………………..Full Article: Source

Industrial Metals Looking Up Amid Some Worry

Posted on 06 January 2015 by VRS  |  Email |Print

Industrial metals are used in a wide variety of applications, including numerous construction and manufacturing businesses. The rise in global population, growth in the Chinese economy and increasing requirements from the developed countries had created an unprecedented demand for minerals and metals.
However, over the last couple of months, a stronger greenback, falling oil prices and a slowdown in the Chinese economy have emerged as major headwinds for the global metal industry………………………………………..Full Article: Source

Another challenging year for commodities

Posted on 05 January 2015 by VRS  |  Email |Print

Investors in commodities should brace themselves for another challenging year in 2015, a Credit Suisse Private Banking report has warned. Commodity markets are still facing oversupply owing to “excessive” capital expenditure over the past few years, said commodity strategy analyst Stefan Graber.
Since demand for commodities does not seem to be picking up, prices will have to fall further until production declines, he said. “As commodity projects have long lead times, this process will take time.” This subdued forecast comes after a tough year for commodities investors, with the biggest drag coming from oil………………………………………..Full Article: Source

Top Five Factors Affecting Oil Prices In 2015

Posted on 05 January 2015 by VRS  |  Email |Print

As we ring in the New Year, let’s take stock of where we are at with the oil markets. 2014 proved to be a momentous one for the oil markets, having seen prices cut in half in just six months. The big question is what oil prices will do in 2015. Oil prices are unsustainably low right now – many high-cost oil producers and oil-producing regions are currently operating in the red.
That may work in the short-term, but over the medium and long-term, companies will be forced out of the market, precipitating a price rise. The big question is when they will rise, and by how much. So, what does that mean for oil prices in 2015? It is anybody’s guess, but here are the top five variables that will determine the trajectory of oil prices over the next 12 months, in no particular order………………………………………..Full Article: Source

Gold outlook: Prices could recover in 2015

Posted on 05 January 2015 by VRS  |  Email |Print

The fundamentals of the global gold market could point to modestly higher prices in 2015, according to a commodities analyst. Victor Thianpiriya, commodity strategist at ANZ Bank, expects gold prices to average around $1,238 per ounce for 2015, an increase of over 3.5% from 2 January’s spot price, which hovered at $1,194.10 at midday.
Thianpiriya, in ANZ’s 2015 outlook report, published last month, also said the Australian bank expects Chinese demand for physical gold to remain consistent in 2015, but that prices needed to move up to attract new buyers to the market place………………………………………..Full Article: Source

Commodities will continue to struggle in 2015: Credit Suisse

Posted on 02 January 2015 by VRS  |  Email |Print

Commodities have had a bad run last year and their losing streak could linger on into 2015, Credit Suisse Private Banking said in a report. Commodity prices fell this year and markets are still facing oversupply, commodity strategy analyst Stefan Graber noted.
He said that the oversuppy was due to “excessive” capital expenditure over the past few years. Since demand for commodities does not seem to be picking up, prices will have to fall further until production declines, he said, adding: “As commodity projects have long lead times, this process will take time.”……………………………………….Full Article: Source

Heed These Commodity Market Lessons in 2015

Posted on 02 January 2015 by VRS  |  Email |Print

It might seem counterintuitive, but the start of a new year is the perfect time to reflect on lessons learned in commodity marketing. Analysts say several fundamental messages become apparent for crop and livestock producers during 2014.
For row-crop producers, lessons stem from basic principles of risk management. “Watch your volatility,” advises Bill Biedermann, Allendale, Inc. “Try to manage around that.” Referencing the dramatic downturn in crop prices, Angie Maguire of Citizens LLC says 2014 proved to be “the same as ’12, just the opposite” from a price perspective………………………………………..Full Article: Source

What’s next for OPEC as lower oil prices extend into 2015?

Posted on 02 January 2015 by VRS  |  Email |Print

The oil price decline of 2014 upended the geopolitical chessboard. Worth watching in 2015 will be who can recover and dominate play — OPEC, Vladimir Putin or U.S. shale drillers.
Oil’s international benchmark price dropped as much as 49 percent in 2014. Those looking for a quick rebound may be disappointed, as world consumption growth slowed to the least since 2009, U.S. companies pumped more than they have since the 1980s and a price war broke out among members of the Organization of Petroleum Exporting Countries………………………………………..Full Article: Source

Commodities outlook 2015: Economic prospects

Posted on 23 December 2014 by VRS  |  Email |Print

Following a number of years of sluggish performance, the UK economy finally seems to be heading in the right direction. But consumers continue to feel the pinch on spending, and with the European economy still depressed, selling into both domestic and export markets remains challenging, says Richard King, head of Andersons’ business research.
UK GDP growth improved to an estimated 3% in 2014 – and is forecast at 2.6% in 2015. “While this growth is good news, it may prove problematic to agriculture in the form of a stronger pound and bank base rate increases,” says Mr King………………………………………..Full Article: Source

Saudis See Oil Recovery as U.A.E. Urges Non-OPEC Cuts

Posted on 23 December 2014 by VRS  |  Email |Print

Saudi Arabia and the United Arab Emirates reiterated pledges to keep pumping the same amount of crude, blaming non-OPEC producers for the glut of oil that’s driven prices to the lowest in five years.
Suppliers from outside the Organization of Petroleum Exporting Countries should cut “irresponsible” output, U.A.E. Energy Minister Suhail Al Mazrouei said in Abu Dhabi yesterday. Even if non-OPEC producers were to offer cuts, OPEC probably wouldn’t follow suit, Saudi Oil Minister Ali Al-Naimi said. The two countries account for about 40 percent of OPEC supply………………………………………..Full Article: Source

Global economy growth likely to be weaker than 2014: QNB

Posted on 23 December 2014 by VRS  |  Email |Print

As 2014 comes to an end, the global economy shows signs of weakness with significant downside risks. Some of these risks are likely to materialise next year, leaving the global economy in worse shape than in 2014, QNB said in its Economic Commentary yesterday. It made five predictions that will expected to shape the global economic outlook for 2015 and beyond.
“Looking back, our expectations for 2014 were for a moderate recovery in the world economy that would enable an orderly exit from US Quantitative Easing (QE) and a resumption of global growth to its pre-crisis levels. The reality turned out to be quite different,” the Economic Commentary said………………………………………..Full Article: Source

Amid gloom, some commodities show mettle

Posted on 22 December 2014 by VRS  |  Email |Print

The year 2014 has been a forgettable one for most commodities with many such as crude oil, copper, steel, rubber and cotton seeing their prices head relentlessly south. China cutting back on commodity imports, Europe and Japan slipping again on growth, and the US Fed rolling back its easy money policy affected all commodities. But amidst all the gloom, a few bucked the trend.
From being among the worst performing metals last year, nickel, used mainly for making stainless steel, emerged as one of the top gainers of 2014. Following the Indonesian government’s ban in January on export of unprocessed nickel ore, supplies from the world’s largest producer shrank drastically………………………………………..Full Article: Source

A falling oil price is good for the world economy

Posted on 22 December 2014 by VRS  |  Email |Print

Lower oil prices are not a good thing for Vladimir Putin, Russia’s president: that much is clear. But what about for everyone else? The sharp fall in crude over the past three months has produced an unusual amount of concern that, with inflation already dangerously low across much of the developed world, cheaper oil will worsen the problem.
Such fears are misplaced. To think that lower oil prices are a net negative for the world economy, and particularly for the advanced economies, is to misunderstand the problem with deflation and the cures for it………………………………………..Full Article: Source

Price of Silver in 2015: Why It Could Bounce Higher

Posted on 22 December 2014 by VRS  |  Email |Print

In 2014, silver once again suffered a substantial loss, following up a 36% crash in prices during 2013 with more double-digit percentage declines. Yet even though investors have had to live through a crushing precious-metals market environment during the past two years, many investors now believe that the price of silver in 2015 could finally bounce higher and give bullion owners some long-awaited relief.
Let’s look more closely at what’s moving silver prices, and how those factors are likely to affect silver prices in 2015 and beyond. Can the price of silver in 2015 really rise? Silver offers a unique mix of attributes of both precious and industrial metals. On one hand, silver has traditionally moved closely with gold, given the two metals’ historical use in monetary systems around the world………………………………………..Full Article: Source

Why Gold Could Continue To Fall

Posted on 22 December 2014 by VRS  |  Email |Print

Gold prices remain under selling pressure. Receding U.S. inflation could continue in 2015. As the dollar strengthens, and disinflation begins, expect gold to sell-off further. The price of gold could continue to decline as inflation expectations fall, alongside a stronger dollar and interest rate hike expectations. SPDR Gold Shares is down 14% since March.
The initial fear is that gold could continue to decline as inflation pressures remain subdued, with the dollar rising, and interest rate hikes taking place. On Friday, Minneapolis Federal Reserve Bank President Narayana Kocherlakota stated that he feared a premature rise in interest rates, prior to inflation growth, could do real damage to the economy………………………………………..Full Article: Source

All’s not lost: Commodities ex-oil stage comeback

Posted on 19 December 2014 by VRS  |  Email |Print

Focus may be on volatile oil prices right now, but investors shouldn’t overlook the strong performance in other commodities, one expert warns. Ten commodities were in backwardation this month, a sign that markets outside of oil are recovering, according to a recent note from S&P Dow Jones Indices: copper, corn, cocoa, silver, coffee, live cattle, feeder cattle, heating oil, Kansas wheat, and lean hogs.
Backwardation occurs when the present spot price of a commodity is higher than the futures price, typically signaling a surge in demand and shortages in supply………………………………………..Full Article: Source

Commodity markets limp into 2015

Posted on 19 December 2014 by VRS  |  Email |Print

A freefall in commodity prices has come to a head at the end of 2014 as crude oil, iron ore and coal prices, among others, took a significant tumble and served to bring one global giant – Russia, the world’s ninth-largest economy – to its knees.
The problem facing most resources is that high levels of production have seen supply outstrip global demand, resulting in low commodity prices. Resource giants with low production costs will weather the storm until supply tapers and prices pick up again. High cost producers will probably fall over. The commodity fall can largely be attributed to slowed demand from China which is switching from an investment-focused economy to a consumer-oriented one………………………………………..Full Article: Source

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