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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

Oil Bulls Take Heart as OPEC Rekindles Hopes of Output Freeze

Posted on 15 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. “The statement certainly achieved its purpose,” said Daniel Yergin, vice chairman of IHS Markit. “The Saudis saw bearish bets had really driven down the prices.”……………………………………….Full Article: Source

Commodities: The milk industry cowed

Posted on 12 August 2016 by VRS  |  Email |Print

Dairy farmers adapt to tough times as demand for milk in China slows, hitting New Zealand and the EU. It is calving season in Waikato, New Zealand’s biggest dairy region, and Nicola Kloeten, a farmer, is delivering a new generation of cattle which she hopes will satisfy Asia’s growing appetite for milk, butter and cheeses.
Since signing a free trade deal with China in 2008, New Zealand has enjoyed an export-led dairy boom that has earned it the nickname of “the Saudi Arabia of milk” and driven a rapid expansion of its farm industry. The South Pacific nation is the world’s biggest exporter of milk-based products, which account for a quarter of everything it sells overseas………………………………………..Full Article: Source

Maybe India can ignite new commodity supercycle

Posted on 12 August 2016 by VRS  |  Email |Print

According to the World Bank, together the BRIC nations (Brazil, Russia, India and China) consume 40% of global energy and food commodities and over half of the world’s metals. China alone accounted for virtually all the increase in metals (aluminum, copper, lead, nickel, tin and zinc) consumption of the BRICs since 1994.
India’s consumption of metals almost doubled over the past 20 years. But it’s only taken the sub-continent’s global share from 1.9% to 3.4% according to the report. By contrast, China’s share of worldwide metals consumption went from 6.4% in 1990 to 43.9% last year………………………………………..Full Article: Source

Oil demand likely rising in sweltering Middle East: Kemp

Posted on 12 August 2016 by VRS  |  Email |Print

Saudi Arabia raised its oil production to a record last month while much of the kingdom sweltered in record temperatures that have also hit neighbouring countries across the Middle East.
There is not enough statistical data to draw a direct connection between the two but it is likely most if not all the extra oil production was burned in the kingdom’s power plants to meet electricity demand. Saudi Arabia’s power generators rely heavily on burning unrefined crude as well as residual fuel oil and diesel to meet electricity demand………………………………………..Full Article: Source

World economic outlook dips to 3-year low

Posted on 12 August 2016 by VRS  |  Email |Print

Confidence in the global economic situation and outlook has fallen to a three-year low, according to the latest survey of expert opinion by an influential German think tank.
The Munich-based Ifo Institute said that its World Economic Survey fell by 4.5 index points to 86.0 in the third quarter, dipping to its lowest level in over three years at ten index points below its long-term average. The latest results published on Thursday signaled a reversal in confidence seen from respondents in the last quarter, Ifo said………………………………………..Full Article: Source

Commodities experience broad-based recovery

Posted on 11 August 2016 by VRS  |  Email |Print

Base and precious markets saw a substantial uptick in pricing and trading action amid a softening dollar, which provided an optimistic backdrop before a slew of Chinese data is released.
Copper for September delivery on the Comex division of the New York Mercantile Exchange gained 2.40 cents or one percent to $2.1740 per pound. Trade has ranged from $2.1450 to $2.2050. Comex gold for December settlement edged up $6.70 or 0.5 percent to $1,353.40 – around a one-week high. Trade has ranged from $1,345.70 to $1,363.60………………………………………..Full Article: Source

OPEC upbeat on demand as oil basket posts first fall in five months

Posted on 11 August 2016 by VRS  |  Email |Print

OPEC upgraded its forecast for 2016 oil demand growth on Wednesday, in a report that may dampen hopes for a deal on a production freeze at its meeting next month. In its August report, OPEC forecast demand growth of 1.22 million barrels a day (mb/d) year on year, which was 30,000 barrels higher than forecast in July.
The new forecast would put global oil demand across 2016 at 94.26 mb/d. OPEC, which represents 14 major oil-producing countries, attributed the upgrade to better-than-expected economic performance in advanced European economies and some Asian ones, including India, in the first half of the year………………………………………..Full Article: Source

Amundi: Downbeat optimism about the world economy

Posted on 10 August 2016 by VRS  |  Email |Print

Lack of growth means stock market valuations are justified and investors should return to EM. One of only a handful of Frenchmen ever to take responsibility for $1tn of other people’s money, Pascal Blanque offers a sort of downbeat optimism about the world economy. Expansion, yes, just less than we are used to.
“Global growth is in the region of 3 per cent, fine. But the structure of global growth has changed, meaning that the contribution of manufacturing and global trade is down,” says the chief investment officer for Amundi, a combination of Crédit Agricole’s and Société Générale’s fund businesses which became Europe’s largest asset manager when it listed in Paris last year………………………………………..Full Article: Source

Barclays Channels ‘New Deal’ Lesson in ‘Shaky’ Commodities World

Posted on 09 August 2016 by VRS  |  Email |Print

The outlook for most commodities remains shaky even after investors poured more than $50 billion into raw materials this year, and it may take fiscal stimulus to get things going, not more central bank easing, according to Barclays Plc, which reached for the history books to make a case.
Additional monetary easing by the central banks is unlikely to support the outlook for global commodity demand or prices over the medium term, though more fiscal stimulus might, Kevin Norrish, managing director for commodities research, said in a weekly report on Monday. As possible evidence, the bank cited the impact of President Franklin D. Roosevelt’s “New Deal” policies to fight the 1930s Depression………………………………………..Full Article: Source

Investors pouring money into commodities at the fastest rate since 2009

Posted on 08 August 2016 by VRS  |  Email |Print

Largely driven by a fever for gold, demand for commodities this year is the strongest it has been since the financial crisis, according to Barclays. Total commodity inflows year to date stands at $50.8 billion, marking the strongest January-to-July performance since 2009 — which was only $1 billion higher, said Barclays in an Aug. 4 research note written by Kevin Norrish, head of commodities research.
Those inflows, along with some hefty price gains, have pushed commodity assets under management to $235 billion, a sizable leap from $161 billion seen at the end of 2015………………………………………..Full Article: Source

Why a brewing global economic storm is turning gold into the perfect trade

Posted on 05 August 2016 by VRS  |  Email |Print

Gold is poised to benefit from a “perfect storm” of fewer viable investment alternatives and bigger risks, according to an industry group that is the sponsor of one of the world’s biggest gold exchange-traded-funds.
Analysts have interpreted weak Japanese government bond demand—such as that seen for a 10-year auction earlier this week—as a sign that investors are losing faith in “unconventional monetary policies,” said the World Gold Council in its August monthly report. “In this environment, we believe investors are using gold to hedge portfolio risk as they add more stocks and low quality bonds to their asset mix,” said the World Gold Council………………………………………..Full Article: Source

Going for Gold: Price of Bullion Surges as China and Russia Amass Precious Metal

Posted on 05 August 2016 by VRS  |  Email |Print

China and Russia are steadily accumulating gold as they seek to reduce dependence on the US dollar, financial information website Marketwatch reported. Russia and China’s policy of buying gold has helped the price of the precious metal to reach its highest level for more than two years, according to financial information website Marketwatch.
On August 2 the price of gold future contracts for December delivery closed at $1,372.6 per troy ounce, their highest level since March 2014. “China and Russia, the world’s No. 1 and No. 3 producers, are catching up to the big industrial countries in stocks of bullion in their official reserves,” remarked Marketwatch analyst David Marsh………………………………………..Full Article: Source

Gold is glittering … and may soar if Trump wins

Posted on 04 August 2016 by VRS  |  Email |Print

Gold prices are up nearly 30% this year. The yellow metal has been shining due to worries about the health of the global economy and continued concerns about the value of paper currencies in a world where interest rates around the world are extremely low - and, in some cases, negative.
Gold often does well when investors are nervous. There’s been an even more ferocious rally in some other precious metals. Silver, for example, is up nearly 50% this year. At times of unease, a physical hunk of metal is something tangible that investors can hold and touch - and help allay some fears about deflation, stagnant economic growth and political uncertainty………………………………………..Full Article: Source

OPEC Output Disrupted in July on Nigeria Attacks, Libya Dispute

Posted on 03 August 2016 by VRS  |  Email |Print

OPEC’s crude oil output was disrupted in July by militant attacks in Nigeria and political disputes in Libya, according to a Bloomberg News survey. Output from the 13 established members of the Organization of Petroleum Exporting Countries, excluding new entrant Gabon, fell by 80,000 barrels a day last month, a Bloomberg survey of analysts, oil companies and ship-tracking data showed.
Nigeria led the decline with a 70,000-barrel-a-day monthly drop to 1.52 million, while Libya and Saudi Arabia reduced output by 20,000 and 40,000 barrels a day respectively………………………………………..Full Article: Source

Gold Price Is Now On Its Way To All-Time Highs

Posted on 03 August 2016 by VRS  |  Email |Print

During the 70s bull market, gold went from $35 to $195 in the first phase. That was a 458% increase. The first phase of the current bull market took gold from $252 to $1920, which made for a 661% increase.
At first glance, it would appear that the current bull market outperformed the 70s one. However, it only took about five years (1970 to 1975) to get the 458% increase, compared to the roughly ten years and five months it took to get the 661% increase. If the performance of the current bull market actually matched that of the 70s, then prices should have risen about 1000%. ……………………………………….Full Article: Source

Metals outlook relies on China stimulus

Posted on 03 August 2016 by VRS  |  Email |Print

Debate over credit or fundamentals is driving gains for zinc, nickel and aluminium. Very few investors expected to see metals prices outperform other commodities this year. Now, the big question is whether the stellar gains seen for the likes of zinc, nickel and aluminium mark the start of a new bull cycle.
Debate over the outlook for metals prices largely reflects whether China’s current stimulus is more credit driven or based on fundamental demand. Last month Goldman Sachs warned that demand growth this year “is purely driven by China’s credit stimulus”………………………………………..Full Article: Source

Investors eye commodities funds

Posted on 01 August 2016 by VRS  |  Email |Print

Commodities funds ended June in positive territory up +2.72 percent, according to performance data from eVestment - a rebound for the funds which has persisted throughout 2016. Asset flows have been consistent over the past 9 months as well, suggesting that investors are once again interested in commodities funds even after the wild price swings in commodity prices over the past few years. For investors looking to cash in, being defensively positioned will be key, says Jason Lejonvarn, Managing Director, Mellon Capital Management.
“The main issue with the commodities benchmark is that it forces you to be long all commodities. But some commodities have big drawdowns so we want the opportunity to be able to go long and short,” Lejonvarn tells Opalesque in an interview. Mellon Capital offers a long/short commodities strategy that he says the firm is offering as a way of helping investors avoid some of the historical pitfalls common to commodity funds………………………………………..Full Article: Source

Oil industry: Lower for longer

Posted on 01 August 2016 by VRS  |  Email |Print

You can see the oil industry’s woes for yourself, at anchor in the Firth of Forth. Very Large Crude Carriers are parked off the coast of East Lothian until the price rises, full of North Sea oil recently loaded through the Hound Point terminal.
Onshore storage facilities are full. You can see other tankers at rest and laden with the crude stuff off the coasts of Suffolk and Cornwall. The gamble made by oil traders is that the cost of storing oil in these tankers - two million barrels in each of the larger ones - is less than the gain to be made out of waiting to sell it………………………………………..Full Article: Source

Gold all set to rise further

Posted on 01 August 2016 by VRS  |  Email |Print

Brexit shockwaves apart, the US too is not in a sweet spot. Moreover gold is backed by strong fundamentals. It looks like gold may stay in the limelight for more time. There is still room for investors to make some money. Its strong fundamentals and the negative news from global economy should help.
Just about when it seemed like the EU was getting better, Brexit has thrown new challenges. In December last year, when the Federal Reserve effected the first rate hike, the US appeared solid, but now, with barely 1.2 per cent growth in GDP in the second quarter, there are doubts over its prospects too. Last week, gold prices rallied to $1351, up 2.16 per cent for the week. The metal’s year-to-date returns stand at 27 per cent………………………………………..Full Article: Source

What has changed in commodity market norms after NSEL

Posted on 01 August 2016 by VRS  |  Email |Print

Since the absence of stock in warehouses was at the heart of the NSEL settlement crisis, Forward Markets Commission also overhauled warehouse norms. A merger which was in the works since 2006 finally came to fruition almost a decade later, hastened by the Rs.5,574-crore settlement crisis in National Spot Exchange Ltd (NSEL).
Folding in the Forward Markets Commission (FMC), the erstwhile commodity markets regulator, with the Securities and Exchange Board of India (Sebi) in September 2015 is perhaps the most important fallout of the NSEL crisis, say market participants………………………………………..Full Article: Source

World Bank sees upward commodity trend

Posted on 29 July 2016 by VRS  |  Email |Print

The World Bank has revised upwards its forecast for many commodity prices in the second half of 2016. Some, it says, might end the year with a lower average price than in 2015 but on the whole, prices have already seen a bottom. It has a positive outlook for energy, non-energy, crude oil and gold; that for fertiliser and metal & minerals is still negative.
Its Commodity Markets outlook for July, a quarterly publication, shows most commodity price indices rebounded in the year’s second quarter (Q2) from January lows, on improved market sentiment and tapering supply………………………………………..Full Article: Source

Commodities ‘At Bottom,’ Says World Bank as Rebound Seen

Posted on 28 July 2016 by VRS  |  Email |Print

Commodities will probably rebound next year as demand strengthens, according to the World Bank, adding its voice to those including Citigroup Inc. who’ve forecast that 2017 may be a better year for raw-material prices.
The Washington-based lender pared its forecast for declines in 2016 in its latest quarterly outlook, and forecast a modest rebound next year. “We are at the bottom of the cycle,” Senior Economist John Baffes, the report’s primary author, said in a phone interview………………………………………..Full Article: Source

The Price Rally Is Over: Capital Drives the Oil Market to Low Prices

Posted on 28 July 2016 by VRS  |  Email |Print

The current oil-price rally is over. U.S. rig counts have surged as oil prices sink. Capital is driving the oil markets and it enables bad behavior by producers. That is why oil prices will stay low.
The oil-price rally that began in February is over. Prices rose from $26 per barrel to $51 by early June and are now below $42. If they fall through $40, the next likely support level is at $36 per barrel. Most people think that fundamentals–supply and demand–drive the oil market but capital drives the market and oil prices………………………………………..Full Article: Source

Is The Commodity Rebound Over?

Posted on 27 July 2016 by VRS  |  Email |Print

One of these two camps of risk assets is sending the wrong signal: Emerging markets and junk bonds, or commodities – and more particularly, oil. While crude oil and commodities in general have weakened notably in July, both emerging markets and junk bonds finished on a high note last Friday.
Emerging markets can be replicated in the MSCI Emerging Markets Index, while commodities can be measured by the CRB Commodity Index or by the price of crude oil as the most important commodity. In this chart, the Emerging Markets Index (in red) roughly replicates the oil price (black line) until the last month………………………………………..Full Article: Source

The question is not why oil prices have fallen, but why they have not fallen further

Posted on 27 July 2016 by VRS  |  Email |Print

Hedge funds and other money managers have begun to amass another large short position in futures and options contracts linked to the price of crude oil. But the current wave of short-selling has been associated with a much smaller decline in WTI prices than last summer, at least so far.
Hedge funds increased their short positions in NYMEX WTI futures and options from 53 million barrels on May 31 to 141 million barrels on July 19, anticipating a further drop in prices………………………………………..Full Article: Source

The Global Economy Is Slow… But Steadier Than Ever

Posted on 22 July 2016 by VRS  |  Email |Print

It’s not difficult to come to the conclusion that, economically speaking, we are living in very turbulent times. China’s great slowdown. Europe’s persistent woes. Brexit. Yet on a bigger scale, all that’s just noise blocking the signal that the global economy is less volatile than any period in the modern era. This is the conclusion of new research led by David Hensley, director of global economics at JPMorgan Chase & Co. in New York.
Hensley’s work measures standard deviations of quarterly, annualized gross domestic product growth for major developed and emerging markets, plus a selection of regions. The sample compares the middle of the business cycle leading up to the Great Recession with the middle of the next cycle, i.e 2013 to 2016………………………………………..Full Article: Source

Base metals edge higher in subdued trading ahead of ECB meeting

Posted on 22 July 2016 by VRS  |  Email |Print

Base metals apart from aluminium were in positive territory in a subdued LME trading session on Thursday morning – traders are on the sidelines ahead of today’s key European Central Bank (ECB) meeting. The ECB meeting, its first since the June 24 UK Brexit referendum, will be watched for signals on interest-rate moves although several traders believe it will follow the Bank of England’s decision to keep rates unchanged.
“With the true extent of the Brexit effect still unclear, and the euro on the weaker side (due to renewed expectations for a September Fed rate hike), the central bank is under no real pressure to act,” Swissquote said……………………………………….Full Article: Source

EIU Global Forecasts Report 2016: Commodities forecasts

Posted on 21 July 2016 by VRS  |  Email |Print

The Economist Intelligence Unit have produced their first global forecast since the Brexit vote. Please find below, their forecasts for commodities until 2020. EIU Report: As in the case of oil, we expect the price of industrial and agricultural commodities to stage only a partial recovery in 2016-20.
After years of oversupply and falling prices, markets are finally moving back towards balance, with our aggregate commodity price index registering its first quarter-on-quarter rise in two years in April-June. Despite this upward trend, however, prices of most commodities remain well below year-earlier levels. Furthermore, rebalancing is taking place at varying speed………………………………………..Full Article: Source

IMF Global Growth Downgrade Not Impact Gold Prices

Posted on 20 July 2016 by VRS  |  Email |Print

Gold prices are not seeing much of a boost following the International Monetary Fund’s (IMF) downgrading its global growth forecasts for 2016. In its latest report, the IMF said it expects worldwide growth to expand 3.1% this year and 3.4% in 2017; both estimates were cut 0.1% from the previous outlook.
The biggest influence on the fund’s downgrade was the approval of the Brexit vote last month. IMF chief economist Maurice Obstfeld said in the report that “Brexit has thrown a spanner in the works,” Obstfeld said”……………………………………….Full Article: Source

Gold and Other Precious Metals’ Brexit Bounce Has Legs

Posted on 20 July 2016 by VRS  |  Email |Print

Gold and most precious metals are still gaining from the bounce they received after the U.K. voted to leave the European Union and most bankers and analysts expect that to continue. In contrast, European aluminum premiums are falling.
Britain’s vote to leave the European Union has led analysts to raise their gold price forecasts again this year, after the decision shook up financial markets and sparked a rally in the precious metal to two-year highs………………………………………..Full Article: Source

Why a 500% Jump in Gold Prices Isn’t Far-Fetched

Posted on 19 July 2016 by VRS  |  Email |Print

One doesn’t have to be gold bug, think that a financial apocalypse is around the corner or know that predicting anything will increase 500% in value sounds a little crazy to think that history suggests that the precious metal’s price could soar.
The decade that brought us disco music, velour jumpsuits and Pong also saw a 2,300% jump in gold prices. Gold traded at $35 an ounce in 1971, but by the beginning of 1980, it had reached $850 an ounce. Meanwhile, stock markets were volatile but with ultimately flat returns, it was a lost decade………………………………………..Full Article: Source

Are the Events in Turkey Bullish for Commodities?

Posted on 18 July 2016 by VRS  |  Email |Print

UBS Wealth Management’s Wayne Gordon discusses the outlook for commodities with Bloomberg’s Betty Liu and Yvonne Man on Daybreak Asia.”.………………………………………Full Article: Source

Why is the oil recovery taking so long?

Posted on 18 July 2016 by VRS  |  Email |Print

Why aren’t oil prices rising faster? The recent recovery in oil prices has largely stalled out and investors looking at historical figures could be forgiven for not understanding why prices cannot move higher for now.
Oil is stuck in neutral despite the fact that even after prices started to crash, many investors once saw $60 as a remarkably cheap threshold. Today, prices remain firmly below that level, and investors will probably have to wait for more positive data before getting close to that level. The problem is not production or a glut of oil. U.S. oil output is falling slowly but steadily over time………………………………………..Full Article: Source

Lithium gets second wind

Posted on 18 July 2016 by VRS  |  Email |Print

The lithium boom has been showing signs of maturing. In a winnowing process that all booms go through, there has been a natural floating to the top of those with the biggest and best lithium positions.
In the listed ASX space, the rise of Pilbara Mines (PLS) is a case in point. It is now a $700 million-plus company courtesy of the success it has had in outlining one of the world’s biggest hard-rock sources of lithium at its Pilgangoora ­deposit, 120km south of Port ­Hedland………………………………………..Full Article: Source

Oil rebounds as investors join global market rally

Posted on 15 July 2016 by VRS  |  Email |Print

Oil prices rebounded Thursday in tandem with a rally on global equity markets as risk appetites grew and a weaker dollar helped to boost demand. Snapping back from two-month lows Wednesday on disappointing US inventories, prices advanced as investors joined the bullish mood on markets expecting more stimulus in major economies.
US benchmark West Texas Intermediate for delivery in August rose 93 US cents to US$45.68 a barrel on the New York Mercantile Exchange. In London, Brent North Sea crude for September delivery, the global benchmark, finished at US$47.37 a barrel, up US$1.11 from Wednesday’s settlement………………………………………..Full Article: Source

IEA, WoodMac raise worries about global oil market recovery

Posted on 14 July 2016 by VRS  |  Email |Print

Two influential think tanks on Wednesday raised worries about the pace of recovery in the world oil market. The International Energy Agency, the oil-consuming countries’ main energy watchdog, warned in its monthly oil market report on Wednesday that despite continued signs that the market is more balanced, the huge supply overhang built up over recent years still weighs on oil prices.
“Although market balance is upon us, the existence of very high oil stocks is a threat to the recent stability of oil prices,” the IEA report said. “There are signs that [demand] momentum is easing,” especially in the US and China, while Europe’s surprisingly robust demand “is unlikely to last”, it said………………………………………..Full Article: Source

Diamonds Seen as ‘Next-Best’ Commodity After Gold Rally

Posted on 14 July 2016 by VRS  |  Email |Print

Commodity investors concerned that gold’s rally will sputter may want to consider another luxury item: diamonds.
With odds of a U.S. rate hike creeping higher and long positions in bullion soaring, “it may make even more sense to look at a next-best commodity exposure such as diamonds, where there has been limited investor flow and presumably less downside in case the bear case unfolds,” Citigroup Inc. analysts including Barry Ehrlich said in a note. The bank recommends shares of Alrosa, the world’s largest rough-diamond producer………………………………………..Full Article: Source

Global research houses revise commodity price outlook upward

Posted on 13 July 2016 by VRS  |  Email |Print

Global investment banks have started revising upward their price outlook for base metals, coal & oil, and precious metals. They see demand starting to outweigh supplies that were cut over the past few quarters.
Crude oil and precious metals have already seen a sharp up-move from low levels. Crude oil was quoted around $25-26 per barrel, gold below $1,100 six months ago. Recovery in metals was slower and they are facing resistance at higher levels, except zinc which is up about 20 per cent………………………………………..Full Article: Source

Commodity rally will continue into second half of the year: Citi

Posted on 12 July 2016 by VRS  |  Email |Print

Commodity prices will buck the trend of the past two years and continue their rally into the second half of 2016, says Citigroup. The new report from Citi says that fund flows should continue to move into commodity-focused assets this year, including physically-backed exchange traded funds and long-only investment funds.
“This is in stark contrast to the last two years, during which time commodities sold off during 2H leading the asset group to be the worst performing as compared with equities and debt securities,” said analysts led by Edward Morse in a note to clients………………………………………..Full Article: Source

Rare-earth prices fall as China postpones purchase plan

Posted on 08 July 2016 by VRS  |  Email |Print

International spot prices for rare-earth metals are declining. At China’s six major suppliers, production costs in mid-June began exceeding bid prices for these key materials that go into smartphones, hybrid vehicles and other high-tech products. At the same time, an upward price trend started losing steam.
The prices of some major rare-earth metals had spiked in May and early June, but even these have started to fall. The price of terbium — which is added to high-performance magnets to enhance heat resistance and is also a raw material in phosphor — has dropped 21% from a month earlier to around $450 per kilogram………………………………………..Full Article: Source

U.S. oil boom isn’t dead. It’s plotting a 2017 comeback

Posted on 07 July 2016 by VRS  |  Email |Print

New cracks have emerged in the U.S. oil boom, thanks to the crash in prices orchestrated by OPEC. U.S. oil production is down seven straight months and recently dropped below the 9 million barrel mark for the first time in nearly two years. It’s further evidence of how the supply glut and relentless pumping from Saudi Arabia, Iran and other OPEC nations have forced American shale companies to hit the brakes.
But OPEC has hardly dealt the U.S. oil boom a death blow. Production is still twice what it was in 2008 and there are early signs of a rebound thanks to the rally in oil prices. Goldman Sachs recently predicted American production will continue declining this year, but then resume growing in 2017 and beyond………………………………………..Full Article: Source

Investors Expand Their Appetite for Commodities

Posted on 06 July 2016 by VRS  |  Email |Print

Desire for commodities-based funds is expanding beyond just oil and gold. In recent months, investors also have developed a healthy appetite for funds focused on agricultural products and industrial materials. Indeed, the entire commodities complex has become a magnet for fund investors’ money, according to new research.
In the first four months of this year, investors poured $38 billion into commodities exchange-traded funds and other commodities investment funds globally, according to a recent report from Barclays. That compares with annual outflows of as much as $83.2 billion in each of the prior three years, through 2015………………………………………..Full Article: Source

Gold Gains on a ‘Perfect Storm’ of Factors

Posted on 06 July 2016 by VRS  |  Email |Print

Gold jumped to its highest price since March 2014 on Tuesday as investors looked for a safe investment amid continued fallout from the United Kingdom’s vote to leave the European Union.
Gold for August delivery settled up 1.5% to $1358.70 a troy ounce on the Comex division of the New York Mercantile Exchange. “We’re seeing people adding to positions,” said Bob Haberkorn, senior market strategist at RJO Futures, adding that buyers are reacting to several factors………………………………………..Full Article: Source

China commodities rally on hopes of stimulus to boost economy

Posted on 05 July 2016 by VRS  |  Email |Print

Chinese commodities from nickel to cotton surged on Monday on hopes Beijing will unleash more stimulus to prop up a sluggish economy, brightening the outlook for raw material demand. An official survey on Friday pointed to China’s weak manufacturing sector in June with export orders and inventories falling and factories shedding more workers.
“There are headwinds in the domestic market and exports and for the government to achieve its macroeconomic targets they need to focus on more stimulus in the second half of the year,” said Helen Lau, an analyst at Argonaut Securities in Hong Kong………………………………………..Full Article: Source

Commodities soar. Silver’s up 50% this year!

Posted on 05 July 2016 by VRS  |  Email |Print

Gold soared to levels over USD 1350 an ounce while Silver moved to over USD 21 an ounce. This is a sharp move for the year, given they had closed 2015 at USD 1060 an ounce and USD 13.83 an ounce. That’s a return of over 50% for Silver in the current year.
The trend is visible across the Commodity space. As per Ole Hansen, Head of Commodity Strategy at Saxo Bank, ‘Apart from grains, all are back in demand following the Brexit vote on June 23. Record low bond yields on the back of raised speculation about renewed central bank action supported metals of all colors. Sugar and coffee found support in Brazil while oil settled down after the initial squeeze and natural gas surged on improved fundamentals.’……………………………………….Full Article: Source

$10 a Barrel Oil Coming Soon? Market Expert Warns the Worst is Yet to Come

Posted on 05 July 2016 by VRS  |  Email |Print

A top oil industry analyst issued an editorial this week suggesting that the recovery of the oil market will be short lived, but is he right? Probably not.
In an editorial this week, acclaimed oil market expert Gary Shilling stood by a prediction he made in August 2015 that oil prices would collapse to $10 per barrel citing higher than expected North American fracking outputs and OPEC’s refusal to limit production………………………………………..Full Article: Source

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