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Chinese Commodities Strategy - Food For Thought

Posted on 27 September 2016 by VRS  |  Email |Print

China is the world’s most populous nation with over 1.37 billion people. China is a significant producer of raw materials - the country has tremendous reserves of minerals and metals and the capacity to produce enormous quantities of agricultural products.
However, with around 18.7% of the world’s people, commodity production within Chinese borders is not enough to meet requirements each year. Aside from the population numbers, the Chinese economy has one of the fastest growth rates in the world. While the economy has cooled over recent years and double-digit economic growth appears to be in the nation’s rear-view mirror, in 2015 China grew by 6.9% and in 2016 it is likely that the economy will grow by more than 6%……………………………………..Full Article: Source

Forex Trading Has Gone Social

Posted on 27 September 2016 by VRS  |  Email |Print

Forex social trading is a rapidly growing trend across the globe. Social investment networks allow investors to copy profitable trading strategies from other investors in their network or share their market knowledge with other traders, sometimes for a profit.
What social trading platforms do is provide an avenue for retail traders to learn from expert and talented peers so that they can minimize investment risks and boost returns. The reason forex social trading is on the rise is that it is perceived to produce more winners compared to conventional forex trading platforms where you have to rely on individual efforts to beat the market and that is sometimes hard for new traders……………………………………..Full Article: Source

Here’s what to expect from OPEC oil-output-freeze talks

Posted on 23 September 2016 by VRS  |  Email |Print

One day major oil producers support a production cap, and the next day they don’t. Members of the Organization of the Petroleum Exporting Countries and Russia will meet on the sidelines of the International Energy Forum in Algeria on Sept. 28 and it could end just like the summit in Doha did last spring—without an agreement to limit production—as producers haggle over who makes the first move.
As was the case ahead of the April meeting, comments from big oil producers have fed volatility in the market, with large price swings for crude oil in either direction becoming the norm since early August, when OPEC announced plans for the gathering………………………………………Full Article: Source

Commodity Traders Face Tougher Rules as EU Curbs Speculation

Posted on 22 September 2016 by VRS  |  Email |Print

Traders in commodities from sugar to oil may face tougher regulation in the European Union as policy makers wrangle over new rules intended to curb speculation. European Parliament lawmakers warn that the EU’s latest proposals for preventing market abuse and spikes in food prices aren’t strict enough.
They delivered that message to Valdis Dombrovskis, the bloc’s financial-services chief, in a closed-door meeting earlier this month. Dombrovskis said he would “reflect on the points raised” and come out with a fresh proposal “soon.”……………………………………Full Article: Source

Gold Seen Entering a Long-Term Bull Cycle

Posted on 22 September 2016 by VRS  |  Email |Print

Gold will likely soar to a record within five years as asset bubbles burst in everything from bonds to credit and equities, forcing investors to find a haven, according to Old Mutual Global Investors’ Diego Parrilla.
The metal is at the start of a multi-year bull run with a “few thousand dollars of upside” in a world of “monetary policy without limits” where central banks print lots of money and low or negative interest rates prevail, said Parrilla, who joined the firm as managing director of commodities last month. He’s worked at Goldman Sachs Group Inc. and Bank of America Merrill Lynch…………………………………….Full Article: Source

Is global trade suffering from ‘cardiac arrest?’

Posted on 22 September 2016 by VRS  |  Email |Print

Global trade is stuck in a deep malaise and may even be suffering from “cardiac arrest.” That’s the grim warning in new research released by the Organisation for Economic Co-operation and Development (OECD), which warns of serious consequences for living standards if trade growth does not rebound.
OECD researchers found that annual growth in global trade has fallen dramatically from 3.4% before the financial crisis, a catastrophic economic event that marked the end of two decades of rapid expansion………………………………………Full Article: Source

Commodities are in a ‘mini-renaissance’ that will last for some time yet

Posted on 21 September 2016 by VRS  |  Email |Print

To the surprise of many, 2016 has turned out to be a bonanza for metals and bulk commodity prices, recovering strongly from the lows seen in the early parts of the year. It’s been such a dramatic turnaround that analysts at Macquarie Wealth Management have dubbed the recovery as a “mini-renaissance” for commodity markets, suggesting that demand, rather than supply, has helped to drive prices higher over the past six months.
Front-and-centre of that improved demand, says Macquarie, stems from the largest end consumer globally for commodities, China………………………………………Full Article: Source

Brexit drives up gold prices

Posted on 16 September 2016 by VRS  |  Email |Print

The trajectory of gold prices in the months after Brexit improved what was already an accommodating climate for the precious metal. Lest we forget, on one Thursday in late June, most journalists were poised around midnight with articles half at the ready about the victory for a Remain vote in the UK referendum. The result caught almost everyone off guard, after it emerged a small majority wanted out.
The pound crashed, panic ensued, and yet few were surprised to hear gold prices had soared. As unexpected as the referendum result was, the sudden spike is largely in keeping with a rally going back to before the start of the year………………………………………..Full Article: Source

Commodities may be a sweet spot for blockchain

Posted on 15 September 2016 by VRS  |  Email |Print

Distributed ledger technology – popularly known as blockchain – has the potential to become a massively disruptive force in financial services. By enabling ‘smart contracts’ with automated post-trade processing, for example, the technology could eliminate the need for clearing houses.
Big banks and exchanges are paying attention. “On the blockchain front, [the second quarter of 2016] saw a number of banks and financial institutions globally begin focusing on proof-of-concept initiatives, moving from initial ideas to actual pilot-testing of solutions,” said a report on fintech investment published last month by KPMG and CB Insights, a New York-based research firm………………………………………..Full Article: Source

Will Commodities End the Year at a High? (Video)

Posted on 15 September 2016 by VRS  |  Email |Print

Bloomberg’s Caroline Abramo discusses the outlook for oil supplies and commodities with Bloomberg’s David Gura and Vonnie Quinn on “Bloomberg Markets.”.………………………………………Full Article: Source

Oil Glut Bomb: New Data Suggests Global Economy Too Weak To Hold Up Oil Prices

Posted on 15 September 2016 by VRS  |  Email |Print

IEA and EIA dropped an oil-glut bomb this month. Their September monthly reports indicate that the world continues to have a glut of oil with little hope of a balanced market in the near future.
IEA’s Oil Market Report focused on weakening demand growth for oil. Their quarterly data shows that year-over-year demand growth has decreased consistently from 2.3 mmb/day in the third quarter of 2015 to 1.4 mmb/day for the second quarter of 2016 (Figure 1). The forecast for the third quarter is only 1.2 mmb/day………………………………………..Full Article: Source

Gold Would Perform Well Under Trump Presidency - Gartman

Posted on 14 September 2016 by VRS  |  Email |Print

Gold would do well under a Trump presidency because the metal likes confusion, said market commentator Dennis Gartman. “[G]old likes political descent and would do rather well in a Trump administration,” Gartman said. He explained that Trump is a bit more hawkish and more likely to make a protocol mistake and this would be price supportive for gold.
On the other hand, “[A] Trump presidency would be enormously bearish for stocks,” Gartman said. “He’s a wild card and the market hates wild cards.”……………………………………….Full Article: Source

Destructive nature of China’s soft commodities imports revealed

Posted on 13 September 2016 by VRS  |  Email |Print

China’s imports of soft commodities are causing massive damage to the environment, the extent of which is revealed in a new report. For every US dollar of soft commodities imports, 7,467kg of embodied emissions are released into the atmosphere. This is well over three times the second-highest emitting import, mining and quarrying products.
Deforestation is the second biggest culprit in carbon emissions after power generation. The report, by the Cambridge Institute for Sustainable Leadership (CISL), the Banking Environment Initiative (BEI) and the Research Centre for Climate and Energy Finance (RCCEF – a Beijing-based organisation), reveals that 50% of illegal deforestation in the tropics is for agricultural purposes………………………………………..Full Article: Source

Legendary Investor Stan Druckenmiller Is Increasing Commodity Exposure

Posted on 13 September 2016 by VRS  |  Email |Print

If the investing community’s track record is ultimately the only thing that matters, and Stan Druckenmiller has one (since 1986, he has averaged returns of 30%) without posting a single down year (he returned 11% during the market meltdown in 2008).
Druckenmiller closed down his $12 billion fund, Duquesne Capital Management, in 2010 and currently manages his own fortune via Duquesne Family Office. With Druckenmiller’s track record, it is wise to watch his moves, and recent disclosures from Duquesne Family Office indicate that Druckenmiller has taken positions in several Canadian names, and these names are largely in the commodity space………………………………………..Full Article: Source

Commodities investing only a mother could love

Posted on 12 September 2016 by VRS  |  Email |Print

There is a long-term, buy-and-hold case for natural resources equities. The man who runs this summer’s best-performing large US mutual fund did a smart thing at the start of the year. Shanquan Li, manager of the Oppenheimer Gold & Special Minerals fund, switched out a large holding of gold, which he owned through an exchange-traded fund, for stakes in some of the world’s big gold mining companies.
As the gold price rose, those mining shares rose by even more. Between the Memorial day and Labor day holidays, when gold was up 9.3 per cent, Mr Li’s fund was up 27.4 per cent………………………………………..Full Article: Source

Cobalt – Tightness looms for the new 100,000 tonne market

Posted on 08 September 2016 by VRS  |  Email |Print

Global demand for refined cobalt will exceed the 100 kt mark for the first time next year and could exceed 150 kt by 2025. The rapid growth in demand is attributed to the increasing popularity of Li-ion batteries in electric vehicles and a range of modern electronic devices (mobile phones, tablets, portable PCs, power tools).
CRU forecasts cobalt demand for these applications to grow by 8% per annum for the next five years. If mining and refining capacity growth fails to keep pace we could see a considerable deficit opening in the market before the end of the decade………………………………………..Full Article: Source

Report shows low commodity prices weighing on U.S. producers

Posted on 07 September 2016 by VRS  |  Email |Print

Declining commodity prices weighed on U.S. farmer sentiment during August, according to the Purdue University/CME Group Ag Economy Barometer. Producer sentiment fell 17 points between July and August to 95, the largest one-month decline since November 2015.
The Purdue University/CME Group Ag Economy Barometer is a nationwide measure of the health of the U.S. agricultural economy. On the first Tuesday of each month, the Ag Economy Barometer provides a sense of the agricultural economy’s health with an index value. The index is based on a survey of 400 agricultural producers on economic sentiment each month………………………………………..Full Article: Source

Q4 commodity trends: What’s next for gold?

Posted on 07 September 2016 by VRS  |  Email |Print

The fourth quarter poses possible challenges to gold’s price growth, which, unlike many other commodities, has actually seen a strong 17 per cent price rise over the last year. While other commodity classes struggle amid slowing global growth and reduced demand, gold shines brightly as a safe-haven beacon in a stormy investment environment.
The big question now is whether the storms will continue into the next quarter, thereby increasing gold’s attractiveness, or whether they will abate, thus reversing gold’s relatively-bullish trend………………………………………..Full Article: Source

Global economy needs a reboot now

Posted on 07 September 2016 by VRS  |  Email |Print

The G20 summit took place in China with rising populist sentiment discouraging leaders from making difficult commitments, and a stumbling push for a Syria ceasefire and Asia’s territorial disputes intruding on the agenda.
“We have agreed… to support the multilateral trade system and oppose protectionism,” said China’s President Xi Jinping after hosting the gathering in the scenic eastern city of Hangzhou………………………………………..Full Article: Source

China ‘must open up further’ to become commodity price-setter

Posted on 06 September 2016 by VRS  |  Email |Print

China’s influence on the commodities market have grown in recent years but it must do more to open up its economy before it can become a price-setter, panellists at the FT Commodities Asia Summit said here.
Chinese demand has driven commodity prices for several years and this trend will continue, Craig Pirrong, professor of finance and energy markets director of the Global Energy Management Institute at the Baur College of Business – part of the University of Houston – said on Monday………………………………………..Full Article: Source

G-20 Reaches ‘Broad Consensus’ on Supporting Global Economy, China’s Xi Jinping Says

Posted on 06 September 2016 by VRS  |  Email |Print

China rallied the Group of 20 around a call to use new levers to revive global growth, though the group’s nine-page statement was short on concrete steps and there were few signs that Beijing would lead by example.
Chinese President Xi Jinping said leaders would put in place guidelines on global investment and explore structural overhauls, acknowledging the need for measures beyond low interest rates to prop up the global economy amid growing resentment of globalization’s effects………………………………………..Full Article: Source

Mitsubishi sees 3 years period for shift from commodities

Posted on 05 September 2016 by VRS  |  Email |Print

Japan’s biggest-trading house has had its fill of commodities. After posting the first annual loss in its post-World War II history amid the collapse in commodity prices, Mitsubishi Corp is shifting away from raw materials to make sure it never happens again.
That process is going to take at least three years, according to Chief Financial Officer Kazuyuki Masu. “We can’t post a second net loss,” Masu said in an interview in Tokyo. “We are balancing our portfolio so that if the price of resources fall again, we won’t be seeing red. To put it simply, we aren’t going to boost our current balance of resources assets” over the next three years………………………………………..Full Article: Source

Gold shines on disappointing US data

Posted on 05 September 2016 by VRS  |  Email |Print

Gold prices, which have been trending down over the last couple of weeks and threatening to decline below the psychological $1,300 per ounce mark, found respite after a strong bounce-back on Friday. This was thanks to the weak US job numbers released on Friday, which dimmed the prospects of a US Fed rate hike.
The global gold spot prices fell to a low of $1,302 on Thursday and reversed sharply higher, recovering all the losses made during the week to close at $1,325. Prior to this reversal the yellow metal was trading under pressure as the dollar index had surged after US Federal Reserve Chair Janet Yellen’s Jackson Hole speech on August 26. Yellen had indicated that the case for the next rate hike had strengthened in recent months………………………………………..Full Article: Source

The new drivers of emerging market growth

Posted on 02 September 2016 by VRS  |  Email |Print

Perceptions about emerging markets (EM) usually lag behind reality, sometimes by decades. Nowhere is this more evident than in the perception about EM equities, where the consensus opinion remains that EM equities - and the MSCI EM in particular - is primarily a commodities and cyclical play.
This view is outdated and wrong. Today, the structural growth drivers constitute more than 50% of the MSCI EM equity index, while the cyclical share is down to 20%. The commodity component has fallen to just 14%, which is less than half of its share a decade ago. Moreover, the tech share of the MSCI EM now constitutes 23%, which is greater than the tech share of the S&P 500………………………………………..Full Article: Source

Global economy faces multiple crises as G20 gathers in Hangzhou

Posted on 02 September 2016 by VRS  |  Email |Print

The 11th G20 summit is scheduled to be held in East China’s Hangzhou on Sunday and Monday. Against the backdrop of anti-globalization sentiment spreading across the world, how the summit will influence the global economy has garnered wide attention. This is also the first time that the summit will be hosted by an emerging economy.
High expectations have been placed on the summit to inject new vigor and vitality into the G20. Worryingly, opposition to globalization is growing, especially in developed economies. Since the 1990s, transnational corporations have established a global production chain with the help of information and communication technologies………………………………………..Full Article: Source

Latin America Currency Divergence Tells Tale of Two Commodities

Posted on 01 September 2016 by VRS  |  Email |Print

The only thing they had in common this month was the name. As the Colombian peso posted the best performance in emerging markets in August, propelled by a jump in crude oil, a plunge in the price of copper pushed the Chilean peso to its worst monthly performance since May.
Oil is Colombia’s biggest export, while Chile is the world’s biggest producer of the industrial metal. “Oil helped the Colombian peso and copper didn’t help the Chilean peso,” said Mario Castro, a strategist at Nomura Holdings Inc. in New York. ……………………………………….Full Article: Source

Global growth: Still made in China

Posted on 01 September 2016 by VRS  |  Email |Print

China is perfectly capable of addressing all sets of challenges simultaneously. Despite all the hand-wringing over the much vaunted China slowdown, the Chinese economy remains the single largest contributor to world gross domestic product growth.
For a global economy limping along at stall speed - and most likely unable to withstand a significant shock without toppling into renewed recession - that contribution is all the more important………………………………………..Full Article: Source

Biggest African Economies Stall on Politics, Commodity Slump

Posted on 31 August 2016 by VRS  |  Email |Print

Africa’s two largest economies are stalling amid slumping commodity prices and political infighting that’s hampering decision making. A government report on Wednesday will probably show Nigeria contracted for a second consecutive quarter in the three months through June as the price and output of oil, its main source of revenue, were squeezed.
While South Africa may have avoided falling into a recession, according to the median estimate of five economists surveyed by Bloomberg, the continent’s most-industrialized economy will not grow this year, the nation’s central bank said last month……………………………………….Full Article: Source

Why Gold Will Likely Be Much Higher 10 Years From Now

Posted on 31 August 2016 by VRS  |  Email |Print

US government debt should exceed $20 trillion next year. Domestic infrastructure is falling apart and more spending (debt) is badly needed. The Federal Reserve will not be able to significantly raise interest rates due to a systemically weak US economy which is likely to stay “weaker for longer.”
Low and even negative interest rates mean the cost of buying and holding gold is negligible. Long term, gold is going much, much higher. Many goldbugs and analysts watch the price of gold very closely and try to time trades based on the latest economic data or Federal Reserve statements……………………………………….Full Article: Source

Southeast Asia to lead charge in commodities as China’s economy slows

Posted on 30 August 2016 by VRS  |  Email |Print

China may be slowing, but a commodities rebound is under way and the world’s biggest miner knows where the next growth story is building - emerging economies in Southeast Asia.
Combined gross domestic product in the ASEAN-5 nations - Indonesia, Thailand, Malaysia, the Philippines and Vietnam - will rise about a third to US$3 trillion in the five years to 2020, fueling commodities-intensive infrastructure projects. Momentum like this across Asia will help maintain and increase commodity demand, BHP Billiton Ltd.’s Chief Executive Officer Andrew Mackenzie said this week………………………………………..Full Article: Source

1 Fact and 2 Forecasts for the Global Economy

Posted on 30 August 2016 by VRS  |  Email |Print

Global economic growth is slowing. The world economy continues to expand, but at a smaller growth rate than in recent years. The outlook isn’t much better. In fact, the IMF keeps revising its forecast downwards, as do the forecasters tracked by FocusEconomics.
It turns out that the expected growth isn’t much off than the historical average. Advanced economies are will not accelerate from current tepid growth, but emerging economies will gradually improve………………………………………..Full Article: Source

Commodities Are the Best Bargain Now: Here’s What to Buy

Posted on 29 August 2016 by VRS  |  Email |Print

What kind of investor are you? Are you the buy-high-sell-higher (trend continuation) type? Or are you a bargain hunter who likes beaten-down (trend reversal) opportunities? The former type of investor is now in heaven. With the stock market at new highs, there are many stocks on fire.
But if you’re looking for bargains, the pickings are pretty slim. Don’t worry. There are still many places to invest your money. I’m talking about hard assets, aka commodities. Hard assets go well beyond real estate and gold. They include all types of natural resources like oil, wheat, copper, timber, coffee, zinc, and pork bellies………………………………………..Full Article: Source

Commodity Prices And The Fed: What’s Happening Man?

Posted on 29 August 2016 by VRS  |  Email |Print

Markets went up on Janet Yellen’s speech yesterday, and then went down on Stanley Fischer’s clarification of Janet Yellen’s speech. The stock market and the commodities market acted like “asset bubble” markets yesterday and reflect how dependent the markets are on Federal Reserve support.
The Fed will probably not raise its policy rate in September; its officials are not ready for an increase and the Fed, usually, does not move just before an election. The headlines on the front page of the Wall Street Journal, front and center, read “Yellen Sends Strong Signal on Rates.”……………………………………….Full Article: Source

Hedge Funds Are Shrinking, Not Dying

Posted on 26 August 2016 by VRS  |  Email |Print

Ouch! Actually, that didn’t hurt so much. News that hedge funds suffered redemptions of $25.2 billion last month may translate into some individual shops closing, but for the industry as a whole, it’s a drop in the ocean.
The bad news is that this latest bloodletting won’t be a cure. Managers have a clouded future to contemplate.For hedge funds worldwide, July was the worst month for redemptions since February 2009, according to an eVestment report………………………………………..Full Article: Source

Corruption costs global economy $2.6tn yearly – Kerry

Posted on 25 August 2016 by VRS  |  Email |Print

US Secretary of State, John Kerry, has said corruption is the root of many development challenges, adding that it costs the global economy an estimated $2.6trn yearly. He stressed that Nigeria needed to tackle bribery, fraud, and other forms of corruption which he said were “dangerous” and undermined efforts to ensure a peaceful world.
He spoke on Tuesday when he visited the Sultan of Sokoto, Alhaji Sa’ad Abubakar. Among those that received Kerry were the Sokoto State Governor, Aminu Tambuwal, and his Zamfara State counterpart, Abdulaziz Yari………………………………………..Full Article: Source

Commodities down in July

Posted on 24 August 2016 by VRS  |  Email |Print

Scotiabank’s Commodity Price Index posted its first monthly loss in July since February. The index was down 1% from June as metals strength (+4.6% month over month) was overwhelmed by weakness in the Oil & Gas (-4.7%) and Agriculture (-5.2%) segments.
Virtually all base and precious metals saw gains last month. Nickel prices gained 15% over June thanks to nickel ore supply concerns in the Philippines, while zinc prices gained 9% due to supply constraints. Copper rose 5%, “but the outlook remains lackluster given the absence of any sustained supply response and weaker global demand prospects,” says a Scotiabank report on the commodity index………………………………………..Full Article: Source

Commodities Are The Best Bargain Now

Posted on 23 August 2016 by VRS  |  Email |Print

What kind of investor are you? Are you the buy-high-sell-higher (trend continuation) type? Or are you a bargain hunter who likes beaten-down (trend reversal) opportunities? The former type of investor is now in heaven. With the stock market at new highs, there are many stocks on fire.
But if you’re looking for bargains, the pickings are pretty slim. Don’t worry. There are still many places to invest your money. I’m talking about hard assets, aka commodities. Hard assets go well beyond real estate and gold. They include all types of natural resources like oil, wheat, copper, timber, coffee, zinc, and pork bellies………………………………………..Full Article: Source

Trudeau’s Cure: Canada to Push Away From Commodities (Video)

Posted on 23 August 2016 by VRS  |  Email |Print

The two-year oil slump has mired Canada in one of the weakest stretches of growth in its history. So there’s some urgency to the search for alternative models. And Prime Minister Justin Trudeau has staked out his version: an economy built on an army of highly educated white-collar workers. Bloomberg’s Danielle Bochove reports on “Bloomberg Markets.”.………………………………………Full Article: Source

Gold price must improve to incentivise industry recovery: Holland

Posted on 23 August 2016 by VRS  |  Email |Print

The world’s gold industry will need the price of its metal to improve further in order to support investment in fresh resources, said Gold Fields CEO, Nick Holland. Making a return to the Melbourne Mining Club some four years after first addressing it, Holland said cost savings as well as currency and oil price weakness had served as tailwinds to the industry.
The average net cash flows of some of the industry’s biggest gold miners, including Barrick Gold, Newcrest Mining, AngloGold Ashanti and Gold Fields itself, had fallen to about $4bn in 2013………………………………………..Full Article: Source

Commodities’ rebound is accelerating in China

Posted on 22 August 2016 by VRS  |  Email |Print

China may be slowing, but a commodities rebound is under way and the world’s biggest miner knows where the next growth story is building – emerging economies in Southeast Asia.
Combined gross domestic product in the Asean-5 nations – Indonesia, Thailand, Malaysia, the Philippines and Vietnam – will rise about a third to $3tn in the five years to 2020, fuelling commodities-intensive infrastructure projects. Momentum like this across Asia will help maintain and increase commodity demand, BHP Billiton’s Chief Executive Officer Andrew Mackenzie said last week………………………………………..Full Article: Source

Is India’s love affair with gold over?

Posted on 22 August 2016 by VRS  |  Email |Print

India’s gold demand fell significantly in the first half of 2016. World Gold Council data show the combined demand for jewellery and investment at only 247 tonnes. Import during January-June was 248 tonnes, 42 per cent lower than the corresponding period last year and lowest since 2009.
Even in calendar years 2013 and 2014, when the trade was under severe regulatory stress in India, demand and imports were higher than seen in 2016 so far. Estimates peg imports in 2016 at 650 tonnes, after taking into account some recovery expected in rural demand, led by a good monsoon. However, this will be the lowest after 2009, when imports were 559 tonnes………………………………………..Full Article: Source

Conditions right for commodities to rally

Posted on 19 August 2016 by VRS  |  Email |Print

The outlook for commodities is favourable, despite the fact most of them are trading below their 15-year median level, says Columbia Threadneedle. Commenting on the state of global equities, Columbia Threadneedle chief investment officer Mark Burgess noted that while commodities were trading at a lower level than in previous years, recent market signs indicated improvement may be just around the corner.
“Commodities stand out as one asset class that has yet to see an uplift. We see commodities as a useful portfolio diversifier and are mindful of its ‘catch-up’ potential, so we have lifted our allocation to the asset class,” Mr Burgess said………………………………………..Full Article: Source

New OPEC Freeze Wouldn’t Be So Potent as Gulf Rivals Pump More

Posted on 19 August 2016 by VRS  |  Email |Print

Even if OPEC strikes a deal with Russia next month in Algiers to freeze oil production, success will mean a lot less than when they tried and failed four months ago. Oil has rallied more than 10 percent since the Organization of Petroleum Exporting Countries said that it will hold informal meeting in the Algerian capital, fanning speculation the group could complete a supply agreement with rival producers that sputtered in April.
Iran may now drop its refusal to join a freeze after restoring most of the crude output curbed by sanctions, a development analysts say makes a deal more likely, but also less worthwhile………………………………………..Full Article: Source

Rally in gold may continue

Posted on 19 August 2016 by VRS  |  Email |Print

There may be further upside, as negative real interest rates in developed world unlikely to end soon. Gold has risen about 26.1 per cent year-to-date in 2016. The strong rally in yellow metal has raised three questions for investors: Will the rally continue? Will it be prudent to make fresh investments at current levels? And, should existing investors stay put or book profits?
Recent data from the World Gold Council for the first half of 2016 show the upsurge in demand for gold was driven primarily by investment demand from investors in the developed world — US, Europe and Japan. The investment demand of 1,063.9 tonnes during the first half of 2016 was 16 per cent more than the previous high in the first half of 2009 (after the financial crisis)………………………………………..Full Article: Source

After years of pain, coal becomes one of the hottest commodities of 2016

Posted on 18 August 2016 by VRS  |  Email |Print

Less than a year after the coal industry was declared to be in terminal decline, the fossil fuel has staged its steepest price rally in over half a decade, making it one of the hottest major commodities.
Cargo prices for Australian thermal coal from its Newcastle terminal, seen as the Asian benchmark, have soared over 35 per cent since mid-June to more than one-year highs of almost $70 a tonne, pushed by surprise increases in Chinese imports………………………………………..Full Article: Source

Will OPEC agree to freeze output in Sept? Kemp

Posted on 17 August 2016 by VRS  |  Email |Print

OPEC and non-OPEC countries are again flirting with the idea of a production freeze to accelerate oil-market rebalancing, according to recent statements by several oil ministers. “Rebalancing is already taking place,” Saudi Energy Minister Khalid Al-Falih observed in comments published on Saturday, which had already leaked on Thursday.
“We are on track and prices should reflect that,” the minister explained. Current prices were unsustainably low and the minister blamed the “large short positioning” in the oil market for causing prices to “undershoot”………………………………………..Full Article: Source

Drop in Venezuela investment could have impact on world’s oil supply

Posted on 17 August 2016 by VRS  |  Email |Print

Venezuela’s oil crisis goes far beyond a simple problem of low prices and threatens the world’s supply of oil because of mismanagement of the country’s state-run oil company, a new report from Columbia University concludes.
Oil production in Venezuela, which boasts the world’s largest oil reserves, has plunged to alarmingly-low levels, the report found, worsening the country’s dire economic crisis that already has led to food and medicine shortages………………………………………..Full Article: Source

What’s Currently Driving Gold?

Posted on 17 August 2016 by VRS  |  Email |Print

Precious metals have seen a tremendous rise in price, mostly due to a lower possibility of a US interest rate hike. Added uncertainty in the Markets due to the Brexit vote and other start-of-the-year issues such as the crude oil rout and the Chinese turbulence also played on gold. As a result, these triggered the haven appeal.
Gold and silver have risen about 26% and 43%, respectively, this year. Expectations that the Federal Reserve will hold off further interest rate hikes gave these metals some breathing room. The higher rate of interest offered on Treasuries raised the opportunity cost of holding non-yield-bearing precious metals………………………………………..Full Article: Source

Will Rising Oil Boost the Global Economy? (Video)

Posted on 16 August 2016 by VRS  |  Email |Print

All it took was a few words from OPEC to encourage oil bulls. Money managers increased wagers on rising crude prices by the most since January as futures rebounded from a three-month low.
Prices jumped after OPEC’s president said Aug. 8 the group will hold informal talks in Algiers next month and Saudi Arabia signaled Aug. 11 it’s prepared to discuss taking action to stabilize markets. RBC Europe Chief European Macro Strategist Peter Schaffrik discusses oil and the outlook for the European economy with Bloomberg’s Francine Lacqua on “The Pulse.”……………………………………….Full Article: Source

Commodities may see rally of up to six months at the most

Posted on 15 August 2016 by VRS  |  Email |Print

According to Barclays, inflows into commodities this year has been the most since 2009, with total assets under management rising to US$235 billion (HK$1.83 trillion) from US$161 billion at the end of 2015.
That rising trend may last three years if one looks back to 2009, so the sector is worth looking at in the next six months. Of course, this plunge is not fueled by an improving economy or real demand. With quantitative easing, people naturally seek out investment opportunities, especially with commodities at low levels………………………………………..Full Article: Source

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