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Investors Head for Exit as Commodities Extend Slump

Posted on 01 October 2014 by VRS  |  Email |Print

Investors are betting that the worst isn’t over for commodity prices that already are the lowest in five years. About $907 million was pulled from U.S. exchange-traded products backed by raw materials this month, the most since April, data compiled by Bloomberg show.
Expanding surpluses, a surging dollar and slowing growth in China helped send the Bloomberg Commodity Index to the lowest since 2009, reversing first-half gains fueled by a polar vortex and dead pigs in the U.S., and escalating tensions in Ukraine and the Middle East………………………………………..Full Article: Source

An already ugly September for commodities just got real

Posted on 01 October 2014 by VRS  |  Email |Print

September was already shaping up as a brutal month for most major commodites. For some markets, it just got a lot uglier. What’s slamming broad swaths of the commodities market? Everything from supply gluts to the dollar’s Samson-like strength of late.
More specifically, oil has been weighed down by a supply glut tied partly to growing U.S. shale production and waning global demand. Gold futures have slumped amid lackluster physical buying, while grain futures have been slipping due to bountiful crop………………………………………..Full Article: Source

Can Precious Metals Have A Solid Last Quarter In 2014?

Posted on 01 October 2014 by VRS  |  Email |Print

Spare a thought for gold and silver, the assets left behind in a summer of gung-ho action for several indices, currencies and shares. A bad 2013 has now been consolidated, with growth in the spring months reversed and gold headed perilously close to a new low for the year (hit on January 1st).
For silver, the picture is even worse and at $1840 the metal is (at time of writing) at its lowest point for over four years. Overall, gold is down over 25% from the beginning of last year, and silver 40%; they have dropped 8% and 16% respectively since July 1. And this bad run of form has come during a summer filled with events that would traditionally have been a boon for safer investments………………………………………..Full Article: Source

Russia is making a comeback on the global rare earth metals market

Posted on 01 October 2014 by VRS  |  Email |Print

In the next three years, the Urals will launch production using new technology to extract rare earth metals from uranium ore. Scientists expect the project to help Russia return to a market that not so long ago was completely dominated by China.
Scientists from the Ural Federal University have developed a unique technology to extract rare earth metals from uranium ore. Their scientific acumen lies in the creation of a sorbent that makes the extraction possible. Pilot production will be set up using this technology in the near future. According to the scientists, this will slash the Russian market’s need for rare earth metals by a third, reduce the dependence of many industrial sectors on imports and put pressure on China, which has a monopoly on the world rare earth metals market………………………………………..Full Article: Source

Rising political risk could lure commodity investors

Posted on 30 September 2014 by VRS  |  Email |Print

Commodities may be out of favour but the political landscape could change that. The macroeconomic environment and the outlook for the geopolitical landscape will often dictate whether investors flock to perceived safe haven assets such as gold. Geopolitical tensions have been escalating in recent months in Ukraine and Russia, as well as in the Middle East, while the Scottish referendum created some uncertainty in the markets.
Meanwhile, central banks continue to diverge when it comes to monetary policy. In spite of all these factors, investors have turned their backs on precious metals, leaving gold out in the cold………………………………………..Full Article: Source

The worrying slide in oil prices and demand

Posted on 29 September 2014 by VRS  |  Email |Print

While the price slide has slowed and some crude oils witnessed a rise due to a sudden and unexpected stock drawdown in the US, analysts still see the price direction as headed downward. The price of Brent oil rose to $97 (Dh356) a barrel on September 25 while the Opec basket of crude oils declined slightly to $94.25 a barrel. The US Energy Information Administration (EIA) now expects oil prices to stay below $100 a barrel until the end of the decade.
The signals that Opec may reduce its production ceiling by 0.5 million barrels a day (mbd) at the next ministerial meeting in November may not be enough to stabilise the market, especially if further declines are seen from now up to the date of the C meeting. If Opec is serious about price maintenance at some level — and thereby arrest further price erosion — it would be a good idea to start now to seek co-operation from other producers………………………………………..Full Article: Source

Falling commodity prices flash warning on widening global divergences

Posted on 26 September 2014 by VRS  |  Email |Print

Global gloom-mongers have something new to worry about – falling commodity prices. The closely watched Bloomberg Commodity index, which tracks 20 commodity prices, has dropped this week to a fresh four-year low.
Tumbling prices for metals, oil and agricultural products fit with a narrative of a slowing China and of growth spluttering in advanced economies, despite exceptional levels of central bank support. It is hard, however, to find anyone in equity, bond or currency markets getting seriously concerned – yet. If anything, the opposite is the case………………………………………..Full Article: Source

Commodity Outliers Attract Investors

Posted on 26 September 2014 by VRS  |  Email |Print

Hedge funds and other money managers are flocking to small markets ranging from cocoa to coffee to cattle that have defied a broader plunge in raw-materials prices. These investors are betting on goods that are seeing demand soar as emerging-market countries become wealthier and their middle classes expand, increasing demand for products such as chocolate and hamburgers.
Investors and economists view demand for these products as less vulnerable to a slowdown in China’s growth. Demand in China for higher-end foodstuffs is still strong, and the ascent of other emerging markets will help alleviate any pullback, they say………………………………………..Full Article: Source

Gold likely to fall further, says Goldman’s Currie

Posted on 26 September 2014 by VRS  |  Email |Print

Goldman Sachs’ Jeffrey Currie says the worst isn’t over yet for gold after prices for the metal erased almost all of this year’s gain. “Risks are significantly skewed to the downside,” said Currie, who told investors to sell last year before gold’s biggest collapse since 1980.
“Much of the support was coming from political uncertainty in Ukraine and what was going on in Middle East,” and those concerns have faded, he said. Currie heads the bank’s global commodities research team. After bullion’s rally in the first half of the year beat gains for commodities, equities and US Treasuries, the metal is heading for its first quarterly decline in 2014………………………………………..Full Article: Source

Best Cure For High Commodity Prices

Posted on 25 September 2014 by VRS  |  Email |Print

During the previous decade, there was lots of buzz about the commodity super-cycle. In my opinion, super-cycles should last at least 20 years. If so, then the latest one in commodities wasn’t so super. I reckon it lasted about 10 years, kicked off by China’s joining the World Trade Organization in December 2001 and starting to peter out when China’s industrial production growth peaked at a record 20.7% on a y/y basis during February 2010.
It was down to 6.9% last month. The proponents of the super-cycle assumed that rapidly growing demand for commodities in China would outstrip supplies for a very long time, pushing prices higher. They did rise for a while. But as they say in the commodity pits, the best cure for high commodity prices is high commodity prices………………………………………..Full Article: Source

Commodities: Cereal excess

Posted on 24 September 2014 by VRS  |  Email |Print

Global grain supplies are soaring, which will cause an eventual slowing of food price inflation. Towering like a missile above the Illinois prairie town of Monticello, the galvanised metal silo that Topflight Grain Co-operative has just added to its storage complex can hold an awful lot of corn: 19,000 tonnes.
Yet after a mild, wet summer – perfect for growing chunky ears of yellow corn – the extra space may not be enough. Derrick Bruhn, Topflight’s grain merchandiser, warns some of it will end up piled high in outdoor mounds as farmers dump their harvests. “It will be difficult to find a place to put everything,” he says………………………………………..Full Article: Source

Commodities warn of correction repeat

Posted on 24 September 2014 by VRS  |  Email |Print

“History is a vast early warning system.” - Norman Cousins. Commodities were once one of the hottest areas to invest in, as China led the super cycle with infrastructure building, increasing demand and investment-driven GDP growth. Much has changed, however, since 2011.
By and large, commodities have been an awful investment with the benefit of hindsight, as a glut overwhelmed the marketplace, combined with slower growth in emerging economies and Europe. From an inter-market analysis standpoint, commodity movement is important to watch as it can provide a sense of whether cost-push inflationary pressures are either rising or falling………………………………………..Full Article: Source

Commodities Funds Soar As Retirement Asset Niche

Posted on 24 September 2014 by VRS  |  Email |Print

The value of commodities funds soared by 45 percent from 2010 to 2012 in 401(k) and defined contribution plans, asset research firm BrightScope disclosed Tuesday using the latest Labor Department data. Despite the surge, these funds continue to be a niche holding for retirement savings, accounting for just over 1 percent ($3.8 billion) of retirement assets.
Pimco was the most popular sponsor of the funds, taking three of the top five places. The company’s Commodity Real Return Strategy Fund retained the No. 1 ranking for the second year in a row with a gain of more than $100 million in retirement accounts, rising to a total of $587 million………………………………………..Full Article: Source

Why Oil Prices Are Dropping Despite Mideast Unrest

Posted on 23 September 2014 by VRS  |  Email |Print

Canada’s oilpatch is basking in an extended sweet spot of sorts. Commodity prices aren’t spiking in a way that’s sure to sink the global economy, nor are they plumbing depths that would force small producers out of business and big players to start tightening their belts and cutting jobs.
The global oil market, however, is changing and nowhere are the signs more evident than the reaction to what’s happening in the Middle East. In the past, military conflicts in the Middle East and the attendant threat of supply disruptions would send oil prices soaring. Today, oil prices are falling even as the region is seemingly unraveling………………………………………..Full Article: Source

Saudi Arabia plays a complicated game with oil prices

Posted on 22 September 2014 by VRS  |  Email |Print

The recent sharp fall in oil prices shows a game within a game. Brent crude has lost nearly US$20 since June to fall below $100 a barrel, its lowest level for two years, even as Saudi Arabia cut 400,000 barrels per day from its production. The Saudis compete against non-Opec producers, while playing both with and against their Opec peers.
Saudi Arabia has a particularly complicated task at the moment. It firstly has to take the lead in deciding on a reasonable overall Opec production level. This never-ending question is one in which it is well versed in answering………………………………………..Full Article: Source

The Inexorable Rise of Asian Commodities Buyers

Posted on 19 September 2014 by VRS  |  Email |Print

Labeling importers in Asia Pacific as keen buyers of commodities, especially crude oil and natural gas, is right on the money and somewhat unremarkable. Emerging markets are all about development and growth plans needing materials and fueled largely by hydrocarbons.
Purchasing power of commercial buyers always matters, but what I encountered on back-to-back visits to Hong Kong, Shanghai and Tokyo, earlier this month was the indisputable clout of those seeking minerals and materials. This palpable shift in power from West to East has gone well beyond setting prices and is inevitably extending to dictating terms and rules of engagement in the physical commodities market……………………………………..Full Article: Source

Commodities: Back On A Steady Course‏

Posted on 19 September 2014 by VRS  |  Email |Print

Overall, we are looking for higher global economic growth next year - however, recently worries have emerged that economic growth in China is slowing down. In turn, the acceleration of growth expected in Q3 has failed to materialise and we could see a further decline in growth in Q4.
However, we expect the Chinese government and central bank to keep growth stable next year. Besides the renewed focus on the risk of lower growth in China, the main factor driving commodity markets currently is abundant supplies, in particular in the global energy and grain market. Overall, we expect commodity markets to remain well supplied in 2015. However, low prices may begin to be an issue for producers as they take their toll on profits……………………………………..Full Article: Source

Calm before the storm? Commodity volatility mired at low levels

Posted on 18 September 2014 by VRS  |  Email |Print

Commodity traders curse it while industrial users of oil, metals and grains applaud it. Several years of low volatility on commodity markets have hammered profits for speculators and constricted trading opportunities, while providing stability for firms that buy such goods.
But both camps may get more than they bargained for when the current period of extraordinarily narrow price movement ends, entering uncharted territory after a number of banks departed the sector…………………………………….Full Article: Source

Commodities May Be Bottoming

Posted on 18 September 2014 by VRS  |  Email |Print

There’s been a dramatic collapse in commodities since the April/May timeframe. Grains have gotten absolutely crushed. Corn, wheat, and soybeans all were looking promising earlier in the year and then they got taken to the woodshed. Copper has followed the opposite path, slammed early in the year, then recovered nicely even with the dollar rallying.
Coffee had a massive rally early in the year and has been consolidating since then. Sugar and cotton have both been crushed since April. Precious metals have had a volatile 2014, with two strong rallies and two grinding declines…………………………………….Full Article: Source

Commodities brace for more woe

Posted on 17 September 2014 by VRS  |  Email |Print

Major commodity markets, many already trading near multi-year lows, could face more pressure should the US Federal Reserve fuel fresh gains in the US currency this week, weighing on dollar-priced raw materials. The mere prospect of a climb in US interest rates has lifted the dollar to multi-month highs, and it may rise further if the Fed confirms on Wednesday after its policy meeting that a rate hike may come sooner rather than later.
This would be bad news for commodities, analysts and investors said, due to their strong negative correlation with the US dollar. Precious metals may be the most susceptible, as gold prices in recent days have shown their strongest negative correlation with the dollar in two years, at over minus 0.94, indicating a nearly matching fall in gold as the dollar rises………………………………………Full Article: Source

Can Gold Recover?

Posted on 17 September 2014 by VRS  |  Email |Print

Gold recently fell to its lowest level in seven-and-a-half months as the dollar rose to a 14-month high. Easing tensions in Ukraine and the Middle East also acted as a drag on gold and Silver prices. Investors have been asking the obvious question as to whether gold can recover from here and if a bottom of at least short-term duration is imminent?
Dollar strength has been especially hard on the precious metals of late. Commodity prices in general have been beaten up in recent weeks by the surging U.S. dollar index, as sagging gold and silver prices attest……………………………………..Full Article: Source

Commodities Extend Decline to Lowest Since July 2009

Posted on 16 September 2014 by VRS  |  Email |Print

Commodities rose after touching the lowest level in more than five years on signs demand growth is weakening in China, the biggest consumer of energy and metals, and on speculation U.S. borrowing costs may rise next year.
The Bloomberg Commodity Index of 22 futures dropped as much as 0.4 percent to 120.7641, the lowest level since July 2009, before trading at 121.3571 at 3:41 p.m. in New York. The gauge has lost 3.5 percent in 2014 and is set for a fourth year of decline. Brent crude fell to the lowest in more than two years as corn and soybeans traded near 2010 lows………………………………………..Full Article: Source

Commodities Fall to 5-Year Low With Plenty of Supplies

Posted on 12 September 2014 by VRS  |  Email |Print

Commodities fell to a five-year low on speculation abundant supplies and slowing economic growth outside of the U.S. will curb demand for raw materials. The Bloomberg Commodity Index declined to the lowest since July 2009. Brent oil traded at the cheapest since 2012, wheat, corn and soybeans retreated to four-year lows, and gold slumped to a seven-month low.
Weak economic growth in Europe and Japan is leading to lower energy prices and interest rates in the U.S. at a time when the U.S. corn crop is a record high and U.S. oil production is poised to be the most in 45 years………………………………………..Full Article: Source

Commodity prices slip on waning global appetite

Posted on 12 September 2014 by VRS  |  Email |Print

Commodity prices are falling, the second time around in 2014. In the current quarter, till date, the Thomson Reuters CRB Commodity Index, a broad indicator, has declined by 7.7%. A similar indicator, the S&P GSCI Index, has fallen by 10.4%. What has contributed to this fall? Food prices are a reason. On Thursday, the UN’s Food and Agriculture Organization said its food price index fell to 196.6 points in August, a level last seen in September 2010.
The index fell by 3.6% over July. Surplus conditions in commodities such as cereals (except rice), dairy products, sugar and oils have contributed to this decline. Crude prices have seen a sharp decline in recent months, with Brent crude prices down by 12.7% in a three-month period. The Dow Jones Commodity Index–Energy has declined by 12.3% in this period. Coal prices also continue to decline, though the degree is lower as they have been falling for a much longer period………………………………………..Full Article: Source

Global Food prices continue to delcine on good weather, harvests

Posted on 12 September 2014 by VRS  |  Email |Print

FAO’s monthly food price index registered another drop in August, continuing a 5-month downward run and reaching its lowest level since September 2010. The index’s August average of 196.6 points represents a decrease of 7.3 points (3.6 percent) from July. With the exception of meat, prices for all of the commodities measured by the index dipped markedly.
Dairy led the pack, with FAO’s sub-index for dairy products averaging 200.8 points in August, down 25.3 points (11.2 percent) versus July and 46.8 points (18.9 percent) compared to a year ago — the result of abundant supplies for export coupled with reduced import demand………………………………………..Full Article: Source

Commodities send worrying signal

Posted on 11 September 2014 by VRS  |  Email |Print

Bulls of growth-focused assets may care to consider some signals from the commodity sector. Early on Wednesday, Brent crude dropped below $99 a barrel for the first time since May 2013; Tokyo-traded rubber prices hit a five-year trough; China-based steel rebar futures for January delivery hit a contract low; and, before recovering into the close, the Dalian Commodity Exchange’s January iron ore price also fell to a record low.
These are products with a high sensitivity to perceived industrial and construction activity in China, source of a high proportion of expected global growth………………………………………..Full Article: Source

Commodities suffer as dollar accelerates

Posted on 08 September 2014 by VRS  |  Email |Print

Weakness across the commodity space resumed this week with the broad-based Bloomberg Commodity index falling by more than 1 percent. Multiple factors drove the weakness, not least the continued surge in the dollar, which gathered additional momentum following the intervention on rates and bonds from the European Central Bank on Thursday.
The announcement by Mario Draghi that the ECB had cut rates to a record low, while pledging to buy hundreds of billions of bonds to support the Eurozone, triggered a major move in the dollar, with the euro falling to a near 14-month low against the greenback. Given the dollar’s adverse relation to dollar-denominated commodities, the impact was felt across all sectors……………………………………….Full Article: Source

OPEC Exports Drop on U.S. Shale

Posted on 08 September 2014 by VRS  |  Email |Print

“I know Putin is a hot topic right now, but oil exports from Russia have no effect on us. What about the big players like Saudi Arabia?” writes Sheldon, a concerned Energy and Capital reader. He emailed his query after reading this week’s columns from both me and Jeff Siegel on Russia, the civil war in Ukraine, and their bearing on the Chinese and European energy sectors.
And while Putin is attempting to harness control over two continents, Sheldon’s email got me thinking more broadly about U.S. oil and our evolving relationship with the Organization of Petroleum Exporting Countries (OPEC)………………………………………..Full Article: Source

Outlook turns bleak for gold

Posted on 08 September 2014 by VRS  |  Email |Print

The easing of tension in Ukraine, the stimulus announced by the European Central Bank (ECB) and the subsequent strength in dollar have worked to the disadvantage of gold. The yellow metal cut its key support at $1,260/ounce and fell to a low of $1,257 last week.
But as the US jobs data released on Friday was not as strong as expected, the metal recovered slightly and closed at $1,268.8/ounce, down 1.4 per cent for the week. The US non-farm payroll report showed that 1,42,000 jobs were added, lower than the street’s expectations of 2,25,000 jobs………………………………………..Full Article: Source

Can Gold And Silver Ever Make A Full Recovery?

Posted on 08 September 2014 by VRS  |  Email |Print

The bear market in gold, silver and mining shares continues as we start the month of September. We have recent calls from investment banks for ever lower prices, perhaps more a symbol of how out of favor this sector is, than any accurate comment on future values. We also have news this week pointing towards more monetary easing in Europe at the same that (supposedly) central bankers in the US are going to be able to begin tightening.
Other apparently bullish news for the US economy and its currency comes from those calling for an age of American energy independence. While the greenback has hardly exhibited the kind of bullish moves higher one would expect during a secular bull market in stocks (the dollar is basically stuck in the same range as that of the last 6 years), hope springs eternal for those bulls who want to make the case that a new era of a strong dollar is going to be the final nail in the coffin for the precious metals………………………………………..Full Article: Source

Obama’s Oil Boom – Global Warming Be Damned

Posted on 05 September 2014 by VRS  |  Email |Print

Considering all the talk about global warming, peak oil, carbon divestment, and renewable energy, you’d think that oil consumption in the United States would be on a downward path. By now, we should certainly be witnessing real progress toward a post-petroleum economy. As it happens, the opposite is occurring. U.S. oil consumption is on an upward trajectory, climbing by 400,000 barrels per day in 2013 alone — and, if current trends persist, it should rise again both this year and next.
In other words, oil is back. Big time. Signs of its resurgence abound. Despite what you may think, Americans, on average, are driving more miles every day, not fewer, filling ever more fuel tanks with ever more gasoline, and evidently feeling ever less bad about it………………………………………..Full Article: Source

Century-old London gold price benchmark starts makeover

Posted on 05 September 2014 by VRS  |  Email |Print

The operator of the London gold price benchmark said on Thursday it formally started the process to find a new administrator for the century-old mechanism that will halt the telephone call that four institutions enter twice a day in favour of an electronic solution.
The London Gold Market Fixing Ltd (LGMFL), along with the London Bullion Market Association (LBMA), said in a statement that the choice will be announced in October, and implementation will be complete by the end of 2014………………………………………..Full Article: Source

As US dollar soars, commodities get crushed

Posted on 04 September 2014 by VRS  |  Email |Print

The hottest trade of the past two months has been a surprising one: Going long the U.S. dollar against other currencies. And the recent dollar strength appears to have had a profoundly negative impact on commodity prices.
Since the end of June, the U.S. Dollar Index (which compares the dollar to a basket of other currencies) has risen 3.5 percent, bringing the index to a 52-week high. And while the weakness in the widely watched euro has certainly contributed to the move, the dollar has also shown considerable strength against currencies like the British pound, the Canadian dollar and the Japanese yen………………………………………..Full Article: Source

Risks associated with investing in commodities right now ‘have diminished’

Posted on 04 September 2014 by VRS  |  Email |Print

The risks associated with investing in commodities have ‘diminished’ in recent months, according to Evy Hambro, manager of the £900 million BlackRock World Mining investment trust. Hambro commented, ‘The mining sector has significantly lagged the general equity market in recent years. However, a number of the downside risks for this sector have reduced, albeit not disappeared.
‘The industry has made good progress in refocusing its strategy: operating costs have been aggressively targeted and investment in projects reassessed. Many commodities are trading close to or below their marginal cost of production, implying that price downside should be limited, in the absence of a collapse in demand.’……………………………………….Full Article: Source

Africa likely to experience oil and gas boom

Posted on 04 September 2014 by VRS  |  Email |Print

Africa’s energy industry could see a major boost in the coming years, a fresh study by PriceWaterhouseCoopers has suggested. Mozambique and Tanzania were highlighted as the countries with the most potential.
A study released by PriceWaterhouseCoopers (PwC) on Wednesday concluded that Africa had the potential to experience a major mid-term energy boom. The survey forecast demand for oil on the continent would “rise significantly” over the next two decades, driven by larger populations, urbanization and the emergence of a wealthier middle class………………………………………..Full Article: Source

How OPEC missed the North American shale revolution

Posted on 03 September 2014 by VRS  |  Email |Print

As an oil cartel, the Organization of Petroleum Exporting Countries is a fixture of the world’s energy system – not particularly liked, but begrudgingly accepted. The national oil companies within the sphere of OPEC, with their opaque accounting practices and byzantine corporate structures, monopolize vast reserves of easy oil and repatriate to their home treasuries gargantuan stores of western currency.
In an increasingly global, transparent and unconventional energy age, OPEC goes against the grain. The untold mineral riches of its member nations, most of which are Middle Eastern, has given them a sense of confidence – some might say arrogance – that lets them, by and large, ignore energy developments elsewhere in the world and continue on with business as usual………………………………………..Full Article: Source

IEA predicts slowdown in global renewable energy expansion through 2020

Posted on 02 September 2014 by VRS  |  Email |Print

A new report from International Energy Agency (IEA) has revealed that the annual growth in new renewable power will slow and stabilize after 2014 due to policy uncertainty and the absence of grid integration measures. The agency warns that it may fall short of delivering the generation required to meet global climate change objectives.
Wind, solar and hydro and other renewables will account for approximately 26% of global electricity generation by the end of 2020 from about 22% in 2013. The report said the expansion will slow in the next five years unless policy uncertainty is diminished………………………………………..Full Article: Source

How the US found an extraordinary solution to oil supply risk

Posted on 01 September 2014 by VRS  |  Email |Print

A new report from the US Energy Information Administration highlights the extraordinary rise in US liquid fuel production over the past few years and how it has helped off-set unplanned supply disruptions which are running at the highest level since the Iraq-Kuwait war some 24 years ago.
The report has done a very good job in clearly describing what we already knew, namely that oil markets since 2011 have become less price sensitive to actual and potential supply disruptions. Especially to those numerous geopolitical events that has taken place since the Arab spring and the overthrow of Libya’s Muammar Gaddaffi in 2011………………………………………..Full Article: Source

Falling Oil Prices Could Force Venezuela to Veer off the Chávez Formula

Posted on 29 August 2014 by VRS  |  Email |Print

Venezuela’s embattled Nicolás Maduro has spent most of his 19-month presidency fighting to avoid changing any of the economic policies he inherited from his predecessor, the late Hugo Chávez. Maduro has repeatedly told his countrymen that Chávez’s socialist blueprint is working in spite of mounting shortages, soaring inflation, and two maxi-devaluations in the past two years. Now falling oil prices may force his hand.
The price of Venezuela’s benchmark basket of crude and petroleum products fell on Aug. 22 to $90.89, a two-year low. Since the end of last month, the price has fallen 10 percent, tracking a surprising drop in international prices in spite of Mideast tensions………………………………………..Full Article: Source

Global green energy growth threatened by policy uncertainty, IEA warns

Posted on 29 August 2014 by VRS  |  Email |Print

Global green energy expansion may stall unless governments can put in place more stable and long-term policies, the International Energy Agency (IEA) warned.
Its third annual Medium-Term Renewable Energy Market Report outlines how renewable sources of energy such as wind, solar and hydropower have made strong progress worldwide to make up around 22 per cent of global power generation, roughly on a par with electricity from gas………………………………………..Full Article: Source

Silver Pricing Change Takes Effect; Other Metals to Follow

Posted on 29 August 2014 by VRS  |  Email |Print

With the launch in mid-August of a new system to arrive at the price for silver, precious metals investors are dealing with the first in a series of changes in how the market prices of silver, gold, platinum and palladium are reached.
More change is coming, since the other three metals have yet to go through the process, but what’s happened so far is this: Concerns about price fixing after everything from LIBOR to currency were found to have been manipulated led to accusations about the gold and silver markets, and in January of this year Germany’s financial regulator Bafin said that the manipulation of precious metals prices was worse than that occurring with LIBOR………………………………………..Full Article: Source

Commodities Volatility Shakes Up Hedge Funds

Posted on 22 August 2014 by VRS  |  Email |Print

Jumpy commodities markets are taking hedge funds for a wild ride. A spate of unpredictable U.S. weather, a surprise record harvest and even a pig virus are giving commodities traders exactly what they craved: volatility. But a few big names are on the wrong side of this summer’s topsy-turvy moves.
Unlike in years past, when star managers scored megapaydays in high-profile markets such as oil and gold, some of the biggest winners in recent months are in commodities like corn, soybeans, natural gas and electricity………………………………………..Full Article: Source

Three reasons why gold is set to rally for the rest of 2014

Posted on 22 August 2014 by VRS  |  Email |Print

Scott Winship, portfolio manager of the Investec Global Gold fund, explains why gold is set to build on a strong first half of the year. In recent months there has been renewed investor interest in gold, with the first half of 2014 seeing the gold price rise by 10 per cent.
Investors have also tempered their gold ETF selling year on year. Last year saw global gold ETF holdings decline by 33 per cent as investors priced in tapering of QE and higher interest rates, but this year has seen a change in sentiment as year-to-date ETF holdings have only declined by 1.8 per cent………………………………………..Full Article: Source

Commodities: You don’t need to know them to trade them

Posted on 21 August 2014 by VRS  |  Email |Print

While there are more opportunities to trade commodities these days, investors remain reluctant to jump on board, citing a lack of understanding about what they are as a key reason. Commodities include products such as gold, silver, oil, wheat, sugar, cattle and pork bellies. OANDA senior technical analyst Stuart McPhee says he finds retail investors aren’t generally interested in trading commodities.
“Anecdotally, when you talk about trading something like sugar or wheat, people say they don’t understand it and wouldn’t know how to trade it. Our trading activity reflects this.” This is despite there being more ways to trade them, he says………………………………………..Full Article: Source

Peak Gold? Russia To Surpass Australia As World No 2 Gold Producer

Posted on 21 August 2014 by VRS  |  Email |Print

Another important player in the gold market at the moment is Russia. Their intentions are more realistic and not as ambitious of those of China. However, Russia sees gold as a valuable monetary asset that will protect the ruble in the continuing currency wars.
This is why, Russia has been one of the largest buyers of gold in recent months (see chart) - largest sovereign buyer and one of the largest buyers in general. Although we do not know how much gold the People’s Bank of China is quietly accumulating. Russia now looks set to become the world’s second largest producer of gold, after China and surpassing current world number two gold producer Australia………………………………………..Full Article: Source

Should Investors Fear Global Tensions?

Posted on 20 August 2014 by VRS  |  Email |Print

Over the past few months, geopolitical crises seem to have proliferated. First, in March, long-simmering tension between Russia and the Ukraine metastasized to a full-blown crisis after the government of Ukraine was toppled by a popular revolt.
That then led to the Russian annexation of Crimea, which was followed by sanctions imposed by the Western states, armed conflict between Russian separatists and the Ukrainian government in eastern Ukraine, and even more sanctions. Then, in June, we witnessed the sudden eruption of another brief, intense war between Israel and Hamas-controlled Gaza, which saw daily scenes of bombs and missiles and reports of death and mayhem………………………………………..Full Article: Source

Fracking – another commodity bubble of our times

Posted on 18 August 2014 by VRS  |  Email |Print

Here’s a Dutch phrase for you, Gouden Eeuw. No, nothing to do with the currently controversial topic of cheese, it rather means Golden Age. Nowadays, the Netherlands is best known for “whacky-baccy” and a liberal take on life – it is a significant trading economy but hardly a global leader. However, in the 17th century it was the USA of its day, the foremost economic and maritime power in the world in a time when size did not matter.
Holland did this by being the first European power to gain a foothold in Asia, including a monopoly on trade with Japan through the Dutch East India Company and dominating inter-European trade, fuelled by cheap energy from Windmills. Then everybody went nuts, completely insane actually or “krankzinnig” as they would say themselves………………………………………..Full Article: Source

Gold falls globally on declining investor demand

Posted on 18 August 2014 by VRS  |  Email |Print

Gold fell the most this month on signs of waning investor demand from the US to China. The metal pared losses amid rising tensions in Ukraine. Violent conflicts in the Middle East and Eastern Europe helped boost prices 8.6 per cent this year.
Investors haven’t been enticed by the gains, sending open interest in New York futures and options to the lowest since 2009 and money managers have trimmed their bullish wagers. Demand for the precious metal fell 16 per cent in the second quarter, led by declines in India and China, the World Gold Council said this week………………………………………..Full Article: Source

World Awash in Oil Shields Markets From 2008 Price Shock

Posted on 14 August 2014 by VRS  |  Email |Print

Fighting across Iraq, Libya, Ukraine and Gaza, and an accelerating economy, should mean higher oil prices. Yet crude is falling. Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear program and the world economy had just seen the strongest period of sustained growth since the 1970s.
Now, West Texas Intermediate, the U.S. benchmark price, has traded below $100 for 10 days and Brent, the European equivalent, tumbled to a 13-month low………………………………………..Full Article: Source

Miners Have Already Rallied: Will Metals Follow?

Posted on 14 August 2014 by VRS  |  Email |Print

When one looks at gold and silver prices and their moves yesterday, it might seem that nothing happened in the precious metals market. That’s far from the truth because the real action took place in mining stocks. Several weeks ago, it was miners’ strength that heralded the rally in the whole sector. Will we see one also this time?
Miners moved higher and the volume that accompanied this move was rather average. It was not high enough to confirm the direction of the move by itself, but it was not low enough for us to say that the move was fake………………………………………..Full Article: Source

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