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Influence of banks, hedge funds on commodities lowest since 2008

Posted on 17 April 2014 by VRS  |  Email |Print

United Nations economists who previously called for government intervention to tame volatile swings in commodity prices say banks and hedge funds have since reduced their influence to the lowest level since 2008.
In a 2012 report for the UN Conference on Trade and Development (UNCTAD), David Bicchetti and Nicolas Maystre said the rise of financial players in commodities markets over the previous decade had moved prices of oil and grains away from the fundamentals of supply and demand………………………………………..Full Article: Source

Material gains

Posted on 17 April 2014 by VRS  |  Email |Print

Commodities: As commodity prices become decoupled from equities, certain resources should again prove their worth as part of a diversified portfolio this year. After a lacklustre few years, commodities have had a short but strong run over the first few months of 2014.
Unfortunately, the recent bounce in the prices of selected resources probably does not represent the start of another bull market for commodities, but rather reflects more idiosyncratic influences on the supply-and-demand outlook for individual commodity groups. Broadly, commodities are unlikely to make up for past losses in 2014, although they should have a better year as the global economic outlook strengthens………………………………………..Full Article: Source

China’s gold demand stagnates in 2014, a year after gold rush fueled by ‘grannies’

Posted on 17 April 2014 by VRS  |  Email |Print

China’s gold-loving grannies bought enough gold last year to see them through this year, and perhaps longer. Despite prices lower than this time a year ago, when the gold rush in the world’s second-largest economy began, demand is likely to remain level this year, the first time it has not increased since 2002.
“We expect 2014 to be a year of consolidation,” a report from the World Gold Council, the trade group, said Tuesday. “The sudden price drop in 2013 meant some Chinese consumers brought forward jewelry and bar purchases, which may limit growth in demand in 2014.”……………………………………….Full Article: Source

China underinvestment affects commodities in South Africa

Posted on 16 April 2014 by VRS  |  Email |Print

A long-term investment in South African commodities — especially gold — is expected to produce a sizable payoff, according to a CCTV Africa report. Standard Bank Commodities Analyst, Walter De Wet, expects that prices will continue to rise as stocks mature and production heightens. More importantly, with the increased investment of China, commodities in Africa — and on a global scale — will edge toward stability.
“We think that China is underinvested in this metal. We do think the physical demand from west to eats will continue. Once the U.S. market is normalized and stabilized, we do think that gold will continue to grind higher,” De Wet said. ”We think long-term price for gold is closer to $1,500 than $1,100.” ……………………………………….Full Article: Source

China to witness sustained growth in gold demand: WGC

Posted on 16 April 2014 by VRS  |  Email |Print

In a major report published on Monday by the World Gold Council “China’s gold market: progress and prospects” suggests that private sector demand for gold in China is set to increase from the current level of 1,132 tonnes(t)1 per year to at least 1,350t by 20172.
Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth. The report examines the factors that have driven China’s rise to become the number one producer and consumer of gold since the market began liberalising in the late 1990s………………………………………..Full Article: Source

With commodities surging take a look at industrial metals

Posted on 16 April 2014 by VRS  |  Email |Print

Stocks have been taking a beating and the dreaded “correction” has been tossed around a lot. There is one group of assets however that are squarely in the middle of their own bull market – metals. Sure, gold and silver grab all the headlines, but industrial metals can make for some great investment plays too.
Jonathan Hoenig of CapitalistPig.com weighed in on Breakout. “Even in the first quarter of 2014 a lot of the commodities in general have been in legitimate bull markets,” he says before listing the likes of tin, nickel, zinc, copper, and lead as potential boons………………………………………..Full Article: Source

Commodities: A lacklustre outlook?

Posted on 14 April 2014 by VRS  |  Email |Print

Even though the main commodity index, the UBS Bloomberg CMCI Composite, has risen modestly recently there have been relatively few gains outside of agriculture. Indeed, it was the only main sector to show positive returns as continuing poor weather conditions led to further rises in many grain prices. Elsewhere, the only moves of note were a sizeable fall in copper and renewed weakness in the gold price.
A global economic background of slower emerging market growth, combined with the reform and rebalancing of a Chinese economy generating a significantly lower trend growth rate, presents a more difficult medium term backdrop for many commodity producers. This represents a departure from the structural bull market witnessed during the last decade and will lower potential returns until capacity tightens again………………………………………..Full Article: Source

OPEC cautious on economy, sees lower demand for its oil

Posted on 11 April 2014 by VRS  |  Email |Print

OPEC lowered the expected demand for its crude oil in 2014 and ended a run of upward revisions to global consumption growth, highlighting concerns over the economy and pressure on its market share from rival producers.
In a monthly report on Thursday, the Organization of the Petroleum Exporting Countries forecast demand for its crude oil in 2014 would average 29.65 million barrels per day (bpd), down 50,000 bpd from the previous estimate………………………………………..Full Article: Source

Why Asian shoppers should blast gold prices sky high

Posted on 11 April 2014 by VRS  |  Email |Print

A backcloth of rampant investor confidence in the global economic recovery, combined with expectations of Federal Reserve monetary tapering, prompted a monumental shift in global gold demand last year.
The safe-haven metal shed more than 27% in 2013 — the first annual drop for 12 years — as investors flocked to riskier assets such as stocks and out of gold exchange traded funds (ETFs)………………………………………..Full Article: Source

China commodity demand not peaking, says IMF

Posted on 10 April 2014 by VRS  |  Email |Print

China’s economic deceleration has spooked commodity markets. But the International Monetary Fund, in its latest global economic report, said China’s demand for commodities is far from peaking.
The IMF noted China’s rebalancing away from an investment-led economic model does not mean its consumption of commodities will tail off. Looking at growth trajectories in China, South Korea and Japan, the fund found that China’s per capita gross domestic product would need to double before that started to happen. (GDP per capita stood at $6,600 in 2013, the IMF estimates.)……………………………………….Full Article: Source

GCC economies immune to oil price shock

Posted on 10 April 2014 by VRS  |  Email |Print

The International Monetary Fund (IMF) has said that most GCC economies continue to have “substantial buffers” to cope with short-lived oil price shocks despite an expected drop in their current account surpluses.
In its World Economic Outlook, published ahead of its spring conference in Washington, the IMF said economic growth in most of the GCC economies is to hover near the rates registered in 2013, with Saudi Arabia, the largest Arab economy, expanding by 4.1 per cent in 2014, compared to 3.8 per cent in 2013………………………………………..Full Article: Source

Bank reform seen by Schreiber pushing commodities into opacity

Posted on 09 April 2014 by VRS  |  Email |Print

Banks pulling out of commodity trading because of rules on proprietary investing and capital requirements are pushing raw-material trade into less regulated and more opaque territory, investor Eric Schreiber said.
Regulations such as Basel III and the Dodd-Frank Act have a “significant impact” on banks, pushing commodity business to trading houses, according to Schreiber, the former head of commodities at Swiss wealth manager Union Bancaire Privee………………………………………..Full Article: Source

China’s changing commodities demand

Posted on 09 April 2014 by VRS  |  Email |Print

Following three decades of rapid growth in China of about 10 percent a year on average, the recent slowdown has raised many concerns. Among them are the implications for global commodity markets: China’s demand rebalancing may lead to lower commodity consumption and prices and thus create adverse spillovers to commodity exporters.
The analysis finds that China’s commodity consumption is unlikely to have peaked at current levels of income per capita. Moreover, the pattern of its commodity consumption closely follows the earlier paths of other rapidly growing Asian economies. However, recent shifts in the composition of China’s commodity consumption are consistent with nascent signs of demand rebalancing—private durable consumption has started to pick up, while infrastructure investment has slowed………………………………………..Full Article: Source

Coal is rallying, is now the time to buy?

Posted on 09 April 2014 by VRS  |  Email |Print

Ukraine has announced that they have taken back control of the facilities which were overrun by the pro-Russian forces recently. There are still those calling for Russia to send the troops into eastern Ukraine, but after the annexation of Crimea we have to imagine that Russia has very little political capital left to use for another deployment into Ukraine.
It made some sense to annex Crimea, however the argument to annex other areas of Ukraine is much weaker and would surely draw the ire of Europe and its allies. The tensions in Ukraine continue to buoy the gold market with the precious metal rising back above the $1,300/ounce level………………………………………..Full Article: Source

Money is leaving emerging markets for riskier bets at the investment frontier

Posted on 08 April 2014 by VRS  |  Email |Print

Many of Africa’s roads are scarred with potholes, so the fresh tarmac on the drive between Ndola and Kitwe, two cities in Zambia’s copper belt, is something of a treat. The country’s roadbuilding is financed by a $750m Eurobond (as dollar bonds issued outside America are known) issued in September 2012. The timing was perfect.
The Federal Reserve had an open-ended commitment to buy Treasuries to keep yields low. Investors in America and Europe were hungry to buy dollar-denominated debt offering juicy yields. Zambia drew $12 billion of orders for a ten-year bond paying only 5.4%. Spain could not borrow as cheaply at the time………………………………………..Full Article: Source

Happy days are here again:Commodities spring back to life

Posted on 07 April 2014 by VRS  |  Email |Print

Happy news! Investors are coming back to commodities. Barclays pointed out that there has been a huge increase in hedge funds length across commodity markets in 2014 with more investors likely to raise their commodity exposure in the next twelve months.
Volatility is back, returns are strong and declining correlations with other asset classes- the mood is improving. Barclays survey showed that financial investors are optimistic and raised their exposure to US commodities futures to a post financial crisis peak in recent weeks………………………………………..Full Article: Source

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

How American energy independence could change the world

Posted on 03 April 2014 by VRS  |  Email |Print

If the bookies are to be believed, Chelsea Clinton could turn out to be luckiest US president in history. The holy grail of American leaders over the past four decades, from Richard Nixon to Barack Obama, has been energy independence, and thanks to shale oil and gas, the dream could soon become reality.
The International Energy Agency (IEA) and oil giant BP certainly think so - they believe the US will be energy independent by 2035. As Mr Obama said in his State of the Union address last year: “After years of talking about it, we are finally poised to control our own energy future.”………………………………..Full Article: Source

Commodities gone wild

Posted on 02 April 2014 by VRS  |  Email |Print

Commodities are finally doing what they are supposed to do. Going up, yes, but more importantly, behaving unpredictably. Besides China’s growth, commodities’ popularity has owed much to the idea that their prices often move on random, unconnected events—war, for example—rather than just, say, economic forecasts. So, in theory, they help diversify a portfolio, enhancing risk-adjusted returns.
Prior to 2009, the Dow Jones-UBS Commodity Index’s 90-day correlation with the S&P 500 swung roughly between 0.2 and negative 0.2, close to zero and indicating no relationship. A score of one denotes lock-step correlation, negative one perfect inverse correlation………………………….Full Article: Source

A U.S.-Saudi move to lower oil prices?

Posted on 28 March 2014 by VRS  |  Email |Print

Could the U.S. unleash a flood of oil from the strategic petroleum reserve that would drive down prices in order to punish Russia? While the idea has been kicked around over the last few weeks – most recently by George Soros – it has also been dismissed as not a serious option.
Some say the impact of an oil sale, if it actually succeeded in lower prices, would be temporary. Saudi Arabia could cut back on production to keep oil prices at their current levels. Others decried the idea as contrary to the objective of the SPR, which has been setup to be used only in cases of emergency………………………………Full Article: Source

Are we trying to fight Russia through commodity prices?

Posted on 27 March 2014 by VRS  |  Email |Print

Although Russia has shown its might through hosting the Winter Olympics, followed by its annexation of Crimea, it’s still in a precarious position because of its reliance on taxes collected from the oil and natural gas industry.
The country receives over half of its revenue from oil taxes, and the country needs Brent crude prices of over $110 to balance its budget this year. In the face of Russian aggression, is the United States subtly pressuring Russia by threatening to flood the crude oil market, leading to falling prices? Additionally, is this week’s conditionally authorized approval of Jordan Cove LNG facility to non-Free Trade Agreement countries another warning shot to Russia?………………………………..Full Article: Source

China’s ‘airpocalypse’ good news for commodities

Posted on 27 March 2014 by VRS  |  Email |Print

The mining industry may be in the doldrums but Robert Friedland, the executive chairman and founder of Ivanhoe Mines, remains undaunted and sees commodity prices bouncing back in two or three years.
We make no apologies for giving you yet more of him, as he tells the best stories in the sector. Of hard and soft rocks, mineral grades and so on, he gives you all that, but tells you why it is important, and where this stuff is being used…………………………………Full Article: Source

Gold demand surge in China

Posted on 27 March 2014 by VRS  |  Email |Print

China’s Gold import from Hong Kong was reported to surge in February after more banks were permitted to import gold by the government amid the increasing demand for gold, the Chinese government gave authorized permission for more banks to carry out import of precious metals because of which Gold import in the country climbed a record high last month and is expected to continue.
According to expert analyst report, net import of China in February reached a total of 109.2 mt when compared to the 83.6 mt in January a year ago………………………………..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

Is gold back?

Posted on 26 March 2014 by VRS  |  Email |Print

After slumping in 2013, gold has moved higher this year on worries over the Ukraine crisis and U.S. economic growth. While miners have welcomed the rally, the battle between the gold “bugs” and bears still appears far from decided.
“Gold excites people,” Nick Sheard, chairman of Australian minerals explorer Carpentaria Exploration, told The Diplomat. “If you’ve ever panned gold, when you see that speck of gold you get quite excited and it’s the same with investors.” He added, “Gold is still considered a reserve currency and whenever there’s a crisis you see strong buying.”………………………………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

Global LNG demand set to tumble from April, China Coal demand weak: PIRA Energy

Posted on 21 March 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group believes that global LNG demand is set to tumble. In the U.S., Thursday’s EIA report highlighted the market’s continued above-normal reliance on inventories. In Europe, PIRA remains relatively unconcerned about a cut-off in gas flows through Ukraine. Specifically, PIRA’s analysis of natural gas market fundamentals has revealed the following:
Global demand is set to tumble starting next month and weak signals from key counter-seasonal markets like Brazil and India are emerging too. Spot price floors will be kept by a strong round of seasonal maintenance in Qatar in particular………………………………………..Full Article: Source

ETP volatility as market uncertainty continues

Posted on 21 March 2014 by VRS  |  Email |Print

Investors have been returning to exchange-traded products, backed by physical commodities, as geopolitical and economic turbulence unsettles the market, the associate director, research, at ETF Securities has said.
Nitesh Shah said over the past few months, investors have been building ‘long positions’ in physical commodities, such as silver ETFs, long copper ETFs and aluminium as a hedge against equity market fluctuations………………………………………..Full Article: Source

More volatility ahead for commodities

Posted on 20 March 2014 by VRS  |  Email |Print

A gradual unwinding of Chinese commodity finance deals - which have attracted as much as an estimated $US160 billion in ‘hot money’ - is likely to weigh on prices of the diverse range of commodities used as collateral.
The use of commodities such as gold, copper and iron ore, but also soybeans and rubber, as collateral for loans has become widespread over the past year in China, where tightly controlled lending policies restrict the amount of money that can be borrowed………………………………………..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

Tide is turning in favour of commodities

Posted on 18 March 2014 by VRS  |  Email |Print

The resources team at Barclays think “the tide may at last be starting to turn for commodity investment flows”. Total commodity assets under management (AUM) rose by $13bn in February, they note, the first AUM growth since last August.
“This was mainly driven by price appreciation, but the $2bn net inflow of new investments, though modest, was notable because it included the first positive monthly net flow into physical gold assets for more than a year.”……………………………………….Full Article: Source

Commodity returns up, correlations down, flows stabilising

Posted on 18 March 2014 by VRS  |  Email |Print

Analysts at Barclays think the tide may at last be starting to turn for commodity investment flows. The three key positives so far this year are: very strong benchmark returns in the year-to-date; the return to negative correlations with other assets, and the consequent re-establishment of commodities as a viable alternative asset; plus the end to a long period of gold liquidation.
In February, total commodity assets under management grew $13bn, the first expansion since August 2013. This was mainly driven by price appreciation, but the $2bn net inflow of new investments, though modest, was notable because it included the first positive monthly net flow into physical gold assets for more than a year, as well as small allocations to commodity beta, the first in many months………………………………………..Full Article: Source

Is the commodities supercycle really over?

Posted on 17 March 2014 by VRS  |  Email |Print

Looking ahead to the rest of the year, commodities face a structural demand decline driven by emerging market slowdown, energy efficiency targets and environmental objectives. This supply will adapt but there will be a multi-year response lag.
On the demand side, emerging market growth and structure of growth have fuelled the supercycle and relate directly to emerging market urbanisation, changing dietary habits (more protein supporting grain prices as feedstock for cattle) and lifestyle choices, which seek to imitate those of the developed markets………………………………………..Full Article: Source

Stability and commodities put the squeeze on dollar

Posted on 13 March 2014 by VRS  |  Email |Print

Global stability concerns coupled with heavy losses in commodity prices have seen investors shift away from riskier assets and push the Australian dollar lower in the process.
Over the past 24 hours, the local currency has slumped close to US1¢. Chinese credit and growth worries have pushed commodity prices lower, and teamed with geopolitical events like the situation in Ukraine to weigh on the Aussie………………………………………..Full Article: Source

Fracking is turning the US into a bigger oil producer than Saudi Arabia

Posted on 12 March 2014 by VRS  |  Email |Print

The expansion in volumes of oil and gas produced by hydraulic fracturing is taking experts and politicians by surprise, with profound consequences for US geopolitics, and even Europe’s reliance on Russian gas.
Thanks to the success in pushing the frontiers of hydraulic fracturing, or “fracking”, to access reserves of oil trapped in shale formations, notably here in Texas and North Dakota, America is poised to displace Saudi Arabia as the world’s top producer. With that could come a hobbling of Opec and unforeseen shifts in US foreign policy………………………………………..Full Article: Source

China Gold Association forecasts 17pct drop in 1Q gold demand, annual demand steady – HSBC

Posted on 12 March 2014 by VRS  |  Email |Print

China Gold Association says gold demand may fall 17%, to 250 metric tons, in the first quarter of 2014, versus 300 tons in the first quarter of 2013, HSBC says, citing a Bloomberg News story. In the Bloomberg story, Zhang Yongtao, CGA’s vice chairman, said 2014 annual demand is forecast to be unchanged at 1,176 tons versus 2013, and 2014 annual mine supply is expected to remain mostly unchanged at 428 tons versus 2013, HSBC says.
“A simple math calculation based on Mr. Zhang’s forecast would indicate that China’s gold demand should be stronger for the rest of 2014 after 1Q, when compared to the same period in 2013. This may indicate that China’s strong appetite for gold is likely to be sustained well into 2014, in our view,” HSBC adds………………………………………..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

2014: A tough year for commodity prices

Posted on 11 March 2014 by VRS  |  Email |Print

Going into 2014, it looked like it would be a relatively benign year for commodity prices, aside from beef. However, prolonged droughts in California and Brazil, porcine epidemic diarrhea virus outbreaks, and instability in Ukraine have all conspired to make 2014 a food buyer’s nightmare.
California’s drought is driving up cattle, dairy and produce prices. Brazil’s drought has lit a fire under coffee, sugar and soybeans. Both corn and wheat have been affected by Russia’s meddling in Ukraine………………………………………..Full Article: Source

Why Ukraine and Russia matter to commodity markets

Posted on 10 March 2014 by VRS  |  Email |Print

Oil, gold and wheat prices are in the limelight after Russia’s invasion of Ukraine’s Crimea region, but the conflict may have significant consequences for other commodities too — including natural gas, palladium and potash.
“Concerns over economic sanctions against Russia will put short-term pressure on [commodities] supplies,” said Jeffrey Sica, president and chief investment offer of Sica Wealth Management. “There is certain to be a significant element of the stockpiling of commodities in anticipation of escalation in the conflict.”……………………………………….Full Article: Source

Commodities trade in Ukraine goes on

Posted on 10 March 2014 by VRS  |  Email |Print

Steel, grain and other commodity export deals are yet to be significantly affected by the growing crises in Ukraine which escalated on 6 March with a US restriction on visas for Russians and Ukrainians threatening Ukrainian sovereignty and the imposition of sanctions by the EU on 18 Ukrainians including ousted president Viktor Yanukovich, the former Prosecutor General, the Head of Security Service, Minister of Justice and some of their relatives or associates.
The presence of Russian troops in Crimea and in particular of Russian ships in the port of Sevastopol are a concern, particularly as Russia is now claiming sovereignty over Crimea and by extension, of all its ports………………………………………..Full Article: Source

‘China factor’ continues to determine future of commodities outlook

Posted on 07 March 2014 by VRS  |  Email |Print

Chinese demand for metals and minerals remains robust, although the pace of uptake is moving towards a plateau as the country enters a more mature economic phase, delegates at the Prospectors and Developers Association of Canada were told.
“There is a very clear correlation between Chinese gross domestic product [GDP] growth and commodity prices,” BCA Research chief strategist of the China Investment Strategy Yan Wang said. “When Chinese growth accelerates that’s good news for commodity prices, and when Chinese growth slows that’s bad news for commodity prices.”……………………………………….Full Article: Source

After buying up the world’s commodities, China gears up to trade more of them

Posted on 06 March 2014 by VRS  |  Email |Print

The Hong Kong Exchange is moving into commodity trading this year to cater to the changing needs of “China Inc.,” the bourse’s exuberant chief executive Charles Li told analysts and reporters in Hong Kong on March 4. “China’s commodity business needs to internationalize and we’ll be here,” he said, with “new products, new members and new partners,” including potential tie-ups with the mainland’s fast-growing commodity trading platforms.
His announcement is the latest sign that after investing heavily around the world to buy and mine the world’s raw materials, China’s next step is to plan an even bigger role in trading them………………………………………..Full Article: Source

Commodity prices rising In 2014, industrial metals are lagging behind

Posted on 06 March 2014 by VRS  |  Email |Print

After three years of weakness, commodity prices are finally showing some life. The new upward move has been reflected in commodity indexes such as the Thomson Reuters/Jefferies CRB commodity index, which provides dynamic representation of broad trends in overall commodity prices.
The two big gainers are coffee and natural gas, which are benefiting from a drought in Brazil and an unusually cold winter, respectively. Apart from the big gains in the agricultural and energy sector, the broad majority of food commodities are also reaching new highs. Precious metals are also showing strength since the start of the year………………………………………..Full Article: Source

Commodities’ base is crumbling

Posted on 05 March 2014 by VRS  |  Email |Print

Commodity bulls live and die by metrics of Chinese demand. So the analytical folks at Sanford C. Bernstein reviewed the scope of that demand through another, less-used indicator: China’s completion and announcement of infrastructure projects.
Big-ticket projects such as nuclear plants and high-speed rail that took off during Beijing’s stimulus splurge to fend off the financial crisis are winding down. The appetite to replace these with similar-sized projects is waning, Bernstein’s Michael Parker says. New ventures coming up are mostly smaller scale, such as subway tracks and electrical transmission lines………………………………………..Full Article: Source

Ukraine crisis flares up commodities prices

Posted on 05 March 2014 by VRS  |  Email |Print

The deployment of Russian military in Crimea is making global commodities markets traders jittery. As the tension between Russia and Ukraine flared up, speculative long positions were built in gold, which is generally seen as a safe haven during military hostilities.
It is still early days but if the situation gets out of hands and turns into a conflict then it will lead to rally in precious metals and create trouble for the Emerging Markets………………………………………..Full Article: Source

Ukraine and global commodities

Posted on 05 March 2014 by VRS  |  Email |Print

The crisis in Ukraine has introduced new event risk for commodity markets. Commodities play an important role for the Ukrainian economy since exports account for around 50% of Ukrainian GDP, of which commodities account for around 60% of all exports: Deutsche Bank Report.
The country’s commodity exports include agriculture, chemicals, metals and timber products. However, the country’s strategic position when it comes tonatural gas flows is, in our view, the most relevant………………………………………..Full Article: Source

No, China is not the ‘cookie monster’ of global commodities

Posted on 03 March 2014 by VRS  |  Email |Print

China’s coming for your water. Your food. Your oil. Your iron ore. The country has a “voracious appetite.” At least that’s the drumbeat you’ve been hearing in headlines over the last several years. With nearly 1.4 billion people and a surging economy, it’s easy to see why China’s resource demand has shaken world markets and generated outsized fears.
After all, oil prices spiked to an all-time high in 2008. Food prices hit a record high in 2011. True, China has launched an impressive series of projects to secure mines, farmland, and water resources, from Brazil to Zimbabwe to Papua New Guinea………………………………………..Full Article: Source

Keeping the faith in commodity trading

Posted on 28 February 2014 by VRS  |  Email |Print

The commodities trading landscape is changing. Faced with rising costs, increased regulation and directionless markets, big banks such as Deutsche Bank are retrenching or retreating from the sector. It is a trend that looks set to continue.
“Sentiment-driven and largely directionless markets, alongside declining client interest, has seen total revenues for the leading 10commodities investment bank businesses across the globe fall to just below a third of their peak, from $14.1bn in 2008 to $4.5bn in 2013, with no foreseeable prospect of recovery,” the UK’s financial watchdog, the Financial Conduct Authority, said……………………………………….Full Article: Source

Commodities forecast suffers

Posted on 27 February 2014 by VRS  |  Email |Print

As rising supplies and slowing demand compound dips that led to last year’s bear market in gold, copper and corn, Bloomberg reports that banks expect commodities to head that way again in 2014.
The super cycle that led commodities to almost quadruple since 2001 is reversing, with prices set to drop 3% in 12 months, reports Goldman Sachs Group Inc………………………………………..Full Article: Source

Several reasons why commodities prices could fall soon

Posted on 27 February 2014 by VRS  |  Email |Print

Commodities as a whole are outperforming the equity benchmark S&P 500 index so far this year. But can it last? Both gold and silver are up around 9% or so in 2014. On the energy side, crude oil gained 4% while natural gas has gained nearly 15%. As for stocks, the S&P 500 is just about flat for the year.
That may change, says commodities expert and portfolio manager John Stephenson of First Asset Investment Management. The author of “The Little Book of Commodity Investing” believes commodities may be a long-term buy but, for the time being, are not………………………………………..Full Article: Source

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