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Why the Dollar Rally Is Hurting Your Commodities

Posted on 12 March 2015 by VRS  |  Email |Print

During the past few trading days, it has become increasingly clear that the impending market volatility that I’ve been warning about lately has arrived. Here’s the long and short of what is happening with the market right now…
Any time the dollar rallies — it had a dramatic rally on Friday and another dramatic rally yesterday — the market pulls back because commodities (oil, gold, aluminum, etc.) are priced in U.S. dollars. So, when the dollar rallies, commodity prices — especially oil prices — fall. I recommend a handful of commodities-related stocks, and we’re seeing the strong dollar weigh on these stocks in the near-term………………………………………..Full Article: Source

Gold price: Apple Watch ‘will boost gold price’

Posted on 11 March 2015 by VRS  |  Email |Print

The languishing gold price could soon be on the rise, some analysts predict, as Apple starts stoking demand with its new gold smartwatch. As well as becoming one of the most sought-after tech devices of the year, the new Apple Watch could become the “world’s biggest gold price catalyst” in 2015, MoneyMorning.com suggests.
The high-end Watch Edition will have a case made of 18-carat gold and will start at $10,000. Even under the most conservative sales projections and estimates of how much gold will be used in the production of each Watch, the device is likely to have an impact on gold prices, the site suggests………………………………………..Full Article: Source

Global Commodities Under Pressure

Posted on 10 March 2015 by VRS  |  Email |Print

With the dollar’s renewed strength and slower global demand, commodities are under pressure again. The situation in Brazil is not helping as the weak Brazilian real encourages producers to dump commodities at lower prices (in dollar terms). And Brazil is one of the largest commodity exporters in the world (from Corn to iron ore).
While the dollar rally and the weakness across the energy patch are pressuring commodities, other drivers exists as well. One specific commodity to watch closely is lumber. And China’s recent growth downgrade is sending iron ore futures to multi-year lows……………………………………….Full Article: Source

China Commodities Imports Slow as Lunar New Year Cools Trade

Posted on 10 March 2015 by VRS  |  Email |Print

China’s commodity trade slowed in February as the Lunar New Year holiday crimped imports of oil, iron ore, copper and soybeans while exports of aluminum and steel fell. Inbound shipments of copper tumbled by the most in four years, soybeans to the least since October, while oil and iron ore imports slowed to the weakest in three months, according to customs data released Sunday in Beijing.
Steel exports fell for the first time since August and the country shipped the smallest amount of aluminum products in four months. The slowdown in raw materials trade reflects the impact of the country’s most-important festival, when factories and output slow before and during the weeklong holiday………………………………………..Full Article: Source

GCC’s rich confident about local economies despite oil price fall

Posted on 09 March 2015 by VRS  |  Email |Print

The majority of GCC’s high net worth individuals (HNWIs) are more optimistic about the economic situation in the region than global growth prospects, a new survey showed. According to a report by Emirates Investment Bank, almost 55 per cent of those polled said that the economic condition in the Gulf was improving compared to jus t 31 per cent who were optimistic about the global economy.
HNWIs are defined as individuals with $2 million or more in investable assets. The survey was conducted among GCC’s HNWIs in the fourth quarter of 2014, a period characterised by falling oil prices………………………………………..Full Article: Source

OPEC Chief Says Cartel Is Hurting U.S. Shale Producers

Posted on 09 March 2015 by VRS  |  Email |Print

OPEC’s top official said Sunday that the cartel’s decision to keep pumping crude in the face of collapsing prices is hurting the U.S. shale-oil industry and a global pullback on investment could lead to a shortage that will push the market upward again.
“Projects are being canceled. Investments are being revised. Costs are being squeezed,” said Abdalla Salem el-Badri, the secretary general of the Organization of the Petroleum Exporting Countries, at the Middle East Oil and Gas conference in Bahrain. “If we don’t have more supply, there will be a shortage and the price will rise again.”……………………………………….Full Article: Source

Specialty funds let you play with the pros in commodities sandbox

Posted on 05 March 2015 by VRS  |  Email |Print

As the Crimean crisis raged last summer, Tyler Mordy and his colleagues at Hahn Investment Stewards made a tactical call in the commodities market. Believing that Russia’s aggression would stoke a major political crisis, they invested in palladium, a silvery-white metal essential in the production of catalytic converters, fuel cells and countless types of electronics.
Russia is the largest source of palladium, and investors speculated about supply disruptions and dwindling stockpiles, sending prices skyward. “Palladium took off like a scalded cat. It worked out incredibly well for us last year,” recalls Mr. Mordy, who is director of research and co-chief investment officer at the Toronto-based firm………………………………………..Full Article: Source

Economist’s faith in oil price rebound vindicated

Posted on 03 March 2015 by VRS  |  Email |Print

Oil prices have been climbing steadily since the end of January, a rebound that has brought some cheer to TAC Economics chairman Thierry Apoteker. Not because the chief economist of the French-based research firm had bet big on the nascent rally that has taken the shine off naysayers’ predictions that oil prices would stay depressed.
Instead, he can afford to breathe just a tad easier as he believes he has been proved right in his predictions. At the start of the year, as oil prices languished in the doldrums with doomsday predictions of a plunge to US$20 a barrel, Dr Apoteker was the odd man out………………………………………..Full Article: Source

India’s Gold Buying to Pick Up After Budget

Posted on 03 March 2015 by VRS  |  Email |Print

Traders are bracing for a short-term bump upward in India’s gold demand after the world’s largest consumer of the precious metal maintained an import duty in a budget unveiled Saturday. In the weeks leading up to the budget announcement, India’s gold imports slowed. Some wholesalers delayed purchases, anticipating that the government would announce a cut in taxes on gold imports.
Imports in January totaled around 39 metric tons, according to Macquarie Group Ltd. That compares with a monthly average of 81 tons in the second half of 2014. Data for February isn’t available, but traders and analysts said imports remained subdued last month………………………………………..Full Article: Source

Commodities languish but signs of recovery emerge

Posted on 02 March 2015 by VRS  |  Email |Print

Is this as bad as it gets? The question is suggested by the fact that, even while commodities are performing poorly, green shoots of hope are emerging (as oil prices have been showing). Canada’s Scotiabank reports its commodities index plunged again in January, dropping below the April 2009 low (post the GFC). Commodity prices are now at ­levels last seen in January 2007.
The bank’s commodity analyst Patricia Mohr says that, while global economic conditions are better than in 2009, an extended period of sub-par world GDP growth has triggered intensely competitive global markets, ­taking the steam out of commodity prices………………………………………..Full Article: Source

Explaining the global oil-price drop

Posted on 02 March 2015 by VRS  |  Email |Print

The Middle East is burning. Jets fighter from Saudi Arabia, Jordan, the United Arab Emirates (UAE) and Egypt have attacked numerous Islamic State (IS) movement targets in Syria, Iraq and Libya, mainly in response to the sadistic killing of a captured Jordanian pilot, Moaz al-Kasasbeh.
In this hostile conflict, begun in June 2014, oil prices have dropped significantly, from the highest level of more than US$100/barrel in 2010 to approximately $50 this year. Yet Saudi Arabia, the biggest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) did not do anything to cut oil supply, to stabilize prices………………………………………..Full Article: Source

Commodities Bust Leaves Latin America with a Hangover

Posted on 27 February 2015 by VRS  |  Email |Print

Five years ago spirits were soaring across Latin America. The region’s economies were bouncing back with startling speed from the global financial crisis to post their strongest growth rates in more than a decade. Robust Chinese demand for copper, iron ore, oil, soybeans and other commodities was filling government and private sector coffers and lifting millions of people into the ranks of the middle class.
Companies like Brazilian aircraft maker Embraer, Chilean fashion retailer Falabella and Mexican bakery goods manufacturer Grupo Bimbo were extending their reach across the region and around the world. The Economist boldly proclaimed the region to be on the verge of a Latin American decade………………………………………..Full Article: Source

Hedge Fund Returns Falter, Yet Money Continues to Flow In

Posted on 27 February 2015 by VRS  |  Email |Print

Another year, and another mediocre performance by hedge funds, to put it kindly. The Barclay Hedge Fund Index gained a meager 2.89 percent in 2014, while the Standard & Poor’s 500-stock index gained over 13 percent and the Barclays United States Aggregate Bond Index rose over 5 percent.
Even as their high fees have minted scores of new billionaires, hedge funds have now substantially underperformed a simple blend of index funds — 60 percent stocks and 40 percent bonds — for three-, five- and 10-year periods. And the 10-year numbers cover the period of the financial crisis and the sharp decline in stocks — the very calamity that hedge funds are supposed to protect against………………………………………..Full Article: Source

Commodity crash reflects global economic slump

Posted on 25 February 2015 by VRS  |  Email |Print

Global commodity prices have tumbled to levels below the depths of the Great Recession, underscoring the widespread difficulties facing the global economy. While crude oil’s price collapse has been in the spotlight, a wide range of other commodities are suffering as well, including natural gas, coal, iron ore, copper, grain and pulp and paper.
The commodity crash is the result of too little demand for raw goods now in plentiful supply after producers ramped up capacity in recent years in anticipation of steady global growth. But trouble spots are everywhere. Commodity markets have declined during worldwide turbulence as the pace of growth in China continues to slow, Russia grapples with an imploding economy and ruble and Greece struggles through an economic crisis that Europe must solve. ……………………………………….Full Article: Source

Oil continues to fall, and Opec isn’t helping

Posted on 24 February 2015 by VRS  |  Email |Print

It was another down day in the oil market: Crude prices fell more than 2 per cent on Monday, with WTI finishing Feb. 23 below US$50 a barrel for the first time in almost two weeks. For a moment, things looked like they might go the other way. Opec President Diezani Alison-Madueke said in a Financial Times report on Monday that she would call an emergency meeting of the Organization of Petroleum Exporting Countries if prices continue to fall. Oil prices reacted sharply to the news-until they fell again.
In addition to being Opec president, Alison-Madueke serves as Nigeria’s oil minister, and cheap oil has helped sow crisis in Nigeria. The Nigerian currency, the naira, is at all- time lows against the US dollar, terrorist attacks by the Islamist group Boko Haram have worsened, and national elections were recently postponed more than a month………………………………………..Full Article: Source

What looks attractive in commodities investment?

Posted on 23 February 2015 by VRS  |  Email |Print

Investors in the equity markets pained by the sideways movement in stocks, have attractive options in another universe called commodities. Even though commodities as an asset class has reached an end of the super bull cycle, there are enough opportunities in the market, which investors can profit from such as industrial and precious metals.
Bullish copper: Fundamentally, a reduction in the surplus situation and supply worries could support copper, the major industrial metal, going forward. Though Chinese consumption and growth have been a major concern, China’s efforts to prop up growth by way of fresh stimulus will deter a further sell-off, analysts say………………………………………..Full Article: Source

With OPEC Taking Away the Punch Bowl, U.S. Oil Companies Are Sobering Up

Posted on 23 February 2015 by VRS  |  Email |Print

America’s energy industry hadn’t been having this much fun since Ronald Reagan was in the White House. With the price of oil intoxicatingly high over the past few years, oil companies have been using it to fuel one of the greatest oil production booms in the country’s history. In just a few short years, we’ve wiped out decades of declines and are now producing more oil than we have since the 1980s.
There’s just one problem, and that’s the fact that the world didn’t yet need all of the oil we’re now producing. But, few could see that, because everyone was a bit too tipsy on the intoxicating allure of the profits that could be made from triple-digit oil prices. It’s a price no one expected to see go away, as the group with the most control over the price of oil, OPEC, was enjoying the $100 vintage just as much as the next guy………………………………………..Full Article: Source

Oil giant BP predicts Opec comeback as Brent crude price rises

Posted on 23 February 2015 by VRS  |  Email |Print

Saudi Arabia and its fellow Opec members are set to make a massive comeback and regain control of the world’s crude oil market, and could be in their previous position of influence as early as next year. The prediction, published by oil giant BP, is based on growth in America’s production of shale gas slowing down.
The US shale boom is partly behind a collapse in global oil prices over the past six months. BP believes the Organisation of Petroleum Exporting Countries (Opec) will be back on top within the next 15 years. The firm stated that Opec will regain its traditional 40 per cent market share by the end of 2035………………………………………..Full Article: Source

Gold – Forming a base as selling abates

Posted on 20 February 2015 by VRS  |  Email |Print

Gold remained under pressure in the final quarter of 2014 on dollar strength and growing demand for higher-yielding risk assets. Technical selling was also a feature after gold breached double bottom chart support around $1,180. The price weakness stimulated physical demand as gold entered its seasonal peak demand period.
Demand is expected to remain strong early this year while Chinese demand is boosted by New Year-related purchases. Further asset diversification among emerging market central banks has also been evident, absorbing continued liquidation from western institutional investors, also a trend we expect to continue in 2015………………………………………..Full Article: Source

OPEC is going to make a massive comeback, BP predicts

Posted on 19 February 2015 by VRS  |  Email |Print

One of the big stories of the past few years has been the boom in unconventional gas and oil extraction outside the traditional oil-producing countries. The explosion of fracking in the U.S. seemed as if it was dislodging the old oil-producing countries permanently.
But that is not likely, according to BP’s latest 20-year outlook for the energy market. BP says the Organisation of Petroleum Exporting Countries (OPEC) isn’t going anywhere, and it will actually make a comeback. BP is forecasting “OPEC’s market share by the end of the Outlook is around 40%, similar to its average of the past 20 years.”……………………………………….Full Article: Source

Australia’s tycoons suffer commodities hangover

Posted on 18 February 2015 by VRS  |  Email |Print

The commodities slump has dented economies, capital expenditure and profits. Now it is scything the wealth of some of Australia’s most colourful tycoons. Andrew “Twiggy” Forrest, the founder and chairman of Fortescue, has seen the value of his one-third shareholding in the iron ore miner fall to A$2.65bn, down from A$6.2bn a year earlier.
The latest Forbes rich list, which was published last month, ranks Mr Forrest as the 10th richest Australian, down from fifth last year. Gina Rinehart remains Australia’s richest, although her wealth fell to US$11.7bn, down US$6bn on the previous year………………………………………..Full Article: Source

BP’s 2035 outlook sees OPEC oil gaining ground as U.S. shale slows

Posted on 18 February 2015 by VRS  |  Email |Print

OPEC will regain ground and exceed its historic record production levels by 2030 as U.S. shale oil growth flattens out in the coming years, energy company BP said on Tuesday. In the near term, demand for oil from the Organization of the Petroleum Exporting Countries (OPEC) is likely to remain under pressure as U.S. shale oil production remains strong, BP said in its annual benchmark Energy Outlook 2035.
Production of tight or shale oil in the United States has been the main driver in supply growth that prompted the near halving of oil prices since July as OPEC opted not to cut its own production………………………………………..Full Article: Source

Gold has bullish hopes, sobering current reality

Posted on 17 February 2015 by VRS  |  Email |Print

The price of gold appears caught in a holding pattern, stuck between what is actually happening to demand and what potentially may happen. The World Gold Council’s latest quarterly report provides a snapshot of the different dynamics at work in the gold market, and goes some way to explain why the precious metal has been marooned in a fairly narrow range for almost two years.
The broad picture from the council’s Gold Demand Trends 2014 report is that last year was the weakest since 2009. This fits in with spot gold’s modest 1.8 percent decline over the year, but the breakdown of that demand shows where the pressure points are located………………………………………..Full Article: Source

Is Productivity Responsible For Drop In Commodity Prices?

Posted on 16 February 2015 by VRS  |  Email |Print

Is there a productivity force at work driving commodity prices lower? Why might lumber prices be higher? What industry cousin might offer clues about innovation in commodity markets? One of the more perplexing developments in this economic recovery is the collapsing prices of commodities.
During an economic expansion demand for commodities typically rises, sending prices higher. That has not been the case in this recovery. Metals, agriculture, energy, livestock and cotton - all of these commodities are trading at prices well below levels at the start of 2012. How could this be?……………………………………….Full Article: Source

Commodities are down-but hardly out

Posted on 13 February 2015 by VRS  |  Email |Print

Do commodities still have a place in the average investor’s portfolio? The 2007-09 recession caused everyone to re-evaluate their tolerance for risk, and nowhere was this felt more strongly than in the commodities arena, where anything from a coffee-eating pest to severe drought could cost an investor hundreds of thousands of dollars.
Several years of negative returns for most commodities haven’t endeared the asset class to investors: For the three years through January, the S&P GSCI Commodity Index posted a negative return of 40 per cent. That came after a 52 per cent decline between June 2008 and June 2011………………………………………..Full Article: Source

Rising Oil Lifts All (Commodity) Boats

Posted on 13 February 2015 by VRS  |  Email |Print

In the commodity markets, a rising price of oil lifts all boats. The 24 commodities in the S&P GSCI index aren’t directly correlated with oil prices, as each raw material moves on its own supply-and-demand dynamics.
But new data from S&P Dow Jones Indices show that when U.S. oil prices are up, it’s hard for other commodities to be down – and vice versa. On average, when oil is up in a month, the index’s 23 other commodities have positive months too, according to an analysis by Jodie Gunzberg, global head of commodities at S&P Dow Jones Indices. When oil is down, 21 other commodities also have down months, on average………………………………………..Full Article: Source

Gold demand sinks to five-year low in 2014

Posted on 13 February 2015 by VRS  |  Email |Print

Global gold demand slumped to its lowest level in five years in 2014 as bar and coin buying plunged and jewelry purchases cooled, according to the World Gold Council (WGC). Overall demand totaled 3,924 tonnes, down 4 percent on year at its lowest level since 2009, the WGC’s quarterly demand trends report, published on Thursday, showed.
Total bar and coin investment fell 40 percent to 1,064 tonnes as investors, who had made major purchases in 2013 amid a sharp fall in prices, held back from further purchases, the industry group said………………………………………..Full Article: Source

Why Oil Prices Will Rebound Before We Know It

Posted on 12 February 2015 by VRS  |  Email |Print

Oil industry analysts have been engaging in a burning debate: Have prices hit bottom or do they have further to fall? Energy company CEOs have been voicing their views on the question as they report their quarterly earnings results. The International Energy Agency weighed in as well in a somewhat bearish five-year forecast released Tuesday, saying that oil prices will eventually rebound from current levels but still stay below the $100 a barrel mark.
The group said global stockpiles would rise, putting prices under more pressure before spending cuts by oil producers kick in to ease the supply glut. Here’s a safe call: Get ready for plenty of thrills, chills and volatility along the way. Let’s take a look at five key lessons from energy company conference calls so far this earnings season, and at several stocks that will benefit from the next chapter that’s about to play out in the ongoing saga of oil price volatility………………………………………..Full Article: Source

Top oil analyst: The worst is yet to come

Posted on 12 February 2015 by VRS  |  Email |Print

Oil prices will get a heck of a lot worse before they get better, a top industry analyst said on Tuesday. Tom Kloza, chief oil analyst at Oil Price Information Service, predicted that oil prices would bottom during the second quarter of the year “simultaneously to one of the expirations of the WTI contracts.”
He warned that the price of West Texas Intermediate crude could be in the $30s at some point in the second quarter. “I think the cycle has a long way to run out,” Kloza said on CNBC’s “Fast Money,” adding that the spread between Brent and WTI could widen to about $10 or so………………………………………..Full Article: Source

Decline in commodity prices not benefiting the end-users

Posted on 11 February 2015 by VRS  |  Email |Print

The sharp fall in commodity prices over the past few months is not benefiting end-users. While the Indian basket crude oil prices have plunged 29.5% between October and December, retail petrol prices dropped just by over 6.5% for the period. Despite the revision in petrol and diesel prices early this month, they have not kept pace with the fall in crude prices.
Ditto with other commodities as well. Cotton prices have declined nearly 10% since October but yarn prices have not dropped at the same rate. While woven yarn prices have dropped only marginally, hosiery yarn prices have declined by only 4.7% since October, data with the union textiles ministry showed………………………………………..Full Article: Source

US shale oil boom could become next ‘dotcom bubble’, says Russian oil boss

Posted on 11 February 2015 by VRS  |  Email |Print

The head of top Russian oil producer Rosneft has ​said the US shale ​energy boom could become the next “dotcom bubble”. Igor Sechin also accused Opec ​of destabilising the market by allowing the oil price to halve in six months.
​​He predicted that​ the rapid growth of fracking in the US would start to peter out after 2020. “We know that revolutions are short-lived and the US production increase is not well supported by reserves,” ​Sechin told an industry conference in London on Tuesday………………………………………..Full Article: Source

China’s commodity imports slow in January after record December

Posted on 09 February 2015 by VRS  |  Email |Print

China’s imports of key commodities eased in January after the record high set in December, as expected as the earlier heavy purchases to take advantage of weak prices had swollen inventories, preliminary customs data released on Sunday showed.
China’s slowing economy - 7.4 percent growth in 2014 was the weakest in 24 years - has weighed on global markets as it is the world’s biggest buyer of iron ore, coal, copper and soy, and the second-largest crude oil importer after the United States. The sharp falls in commodity imports helped result n a record monthly trade surplus of $60 billion………………………………………..Full Article: Source

The global economy: Reasons to be cheerful

Posted on 06 February 2015 by VRS  |  Email |Print

The conventional wisdom about the state of the world economy goes something like this: since the start of the 2007-2008 financial crisis, the developed world has struggled to recover, with only the United States able to adjust. Emerging countries have fared better, but they, too, have started to flounder lately. In a bleak economic climate, the argument goes, the only winners have been the wealthy, resulting in skyrocketing inequality.
That scenario sounds entirely right – until, on closer examination, it turns out to be completely wrong. Start with economic growth. According to the International Monetary Fund, during the first decade of this century, annual global growth averaged 3.7%, compared to 3.3% in the 1980s and 1990s. In the last four years, growth has averaged 3.4%………………………………………..Full Article: Source

10 consequences of the commodity crash

Posted on 05 February 2015 by VRS  |  Email |Print

Probably the most dramatic aspect of the early 2015 global economy is the historically low level of commodity prices. Crude oil prices have fallen by 50 per cent since June. But oil is not the only commodity that has stumbled. Since their peak in February 2011, copper prices have dropped 38 per cent and iron ore prices have fallen a staggering 63 per cent.
Predicting the future is a dangerous occupation. Most observers – and the market -did not foresee the dramatic fall that has occurred. Some analysts and the forwards market expect prices to go even lower, before increasing to $65 per barrel in the next two to three years, while others believe prices will slowly rise to $100 per barrel within the same time frame………………………………………..Full Article: Source

Why Cheaper Oil Doesn’t Always Lead to Economic Growth

Posted on 05 February 2015 by VRS  |  Email |Print

Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn’t necessarily working out that way. Some governments have moved already to shore up their revenues by raising gasoline taxes or cutting fuel subsidies. At the same time, falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment, dragging on growth.
China has raised fuel-consumption taxes by 50% since November. Gasoline prices have soared in Indonesia as the authorities eliminated subsidies altogether………………………………………..Full Article: Source

Are commodities really bottoming out?

Posted on 04 February 2015 by VRS  |  Email |Print

The news on oil is still mostly bearish—BP announced a $3 billion cut in capital expenditures for 2015 on Tuesday—but analysts and strategists are again trying to call a bottom. Raymond James’ Jeff Saut told CNBC Monday that oil has indeed found a bottom.
This morning, following a disappointing earnings report from Anadarko Petroleum, Stifel upgraded the stock to a “buy” from “hold,” saying it expects oil prices to improve in the second half of the year. “We anticipate a rebound in oil prices as U.S. supply growth slows, demand improves, and the dollar potentially tops and begins to weaken over the next 12 to 18 months,” Stifel analysts wrote………………………………………..Full Article: Source

Has oil bottomed? Markets are starting to bet that it has

Posted on 03 February 2015 by VRS  |  Email |Print

Is the bear market in oil over? It’s starting to look that way, after another big move up in crude prices overnight, adding to the 7% gain it posted on Friday. Prices have swung sharply within a $3/barrel range so far Monday, as short-term trading instincts clash with long-term fundamentals.
Over the last month, traders who started the year by ‘shorting’ oil had made a tidy profit, as the price had fallen from $53.27 a barrel to as low as $44 by Friday………………………………………..Full Article: Source

Uncertainty sparks a rush for gold

Posted on 02 February 2015 by VRS  |  Email |Print

Syriza’s electoral victory in Greece and fears that its anti-austerity stance could spread to other eurozone countries have sent many investors scuttling back to the perceived safety of gold and gold funds.
Commodity funds in general had already begun to enjoy strong inflows spurred by uncertainty over the decision in January by the European Central Bank to begin quantitative easing and the Swiss central bank’s decision to remove its currency ceiling………………………………………..Full Article: Source

A Look At Gold And Silver For 2015 And Beyond

Posted on 02 February 2015 by VRS  |  Email |Print

There is only one reason to make an investment: expectations that one will come out of it with more money than one came in. So have gold and silver rewarded investors since 1969, the year when gold first appeared on investors’ radar after being fixed for decades at $35 an ounce?
During the 1970s bull markets, gold and silver’s gains exceeded those of the Dow Jones. During the eighteen year Dow Jones bull market from 1982 to 2000 investors realized a gain of 1380%. Not a bad return, but in the eleven years from 1969 to 1980 gold increased in price by 1918% and silver by 2869%………………………………………..Full Article: Source

Commodity prices collapse to lowest in 12 years

Posted on 30 January 2015 by VRS  |  Email |Print

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

Will commodity continue to slide?

Posted on 29 January 2015 by VRS  |  Email |Print

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

Copper Rises

Posted on 29 January 2015 by VRS  |  Email |Print

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

Goldman Downgrades Commodity Outlook as Energy, Metals Tumble

Posted on 28 January 2015 by VRS  |  Email |Print

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

Russia buys more gold reserves, Netherlands steady

Posted on 28 January 2015 by VRS  |  Email |Print

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

Commodities Signaling Global Growth Warning

Posted on 27 January 2015 by VRS  |  Email |Print

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

Will Global Commodities Reverse the Crunch of 2014 Final Quarter?

Posted on 27 January 2015 by VRS  |  Email |Print

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

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

Posted on 27 January 2015 by VRS  |  Email |Print

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

As Commodities Fall, Some Investors See Reasons to Buy

Posted on 26 January 2015 by VRS  |  Email |Print

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

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

Posted on 26 January 2015 by VRS  |  Email |Print

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

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

Posted on 23 January 2015 by VRS  |  Email |Print

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

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