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Gold and Silver Price Forecast for the Second Half of 2015

Posted on 18 June 2015 by VRS  |  Email |Print

Investors considering gold or silver as an investment or hedge need a good handle on the factors driving their prices. That’s where supply, demand, trend, and sentiment data come in. With global economic and market factors painting no clear picture about the near-term prospects for many investments, many of you might be considering whether it makes sense to add gold or silver to your portfolios.
Jewelry was down slightly by 3% at 600.8 metric tons, but has remained above its five-year average of 570.3 metric tons. Chinese jewelry demand was down 23 metric tons, but India compensated by climbing 27 metric tons. In China’s case, it seems a combination of slower GDP growth and strong stock markets combined to dent demand. In the case of India, jewelry demand popped 22% year over year, due mainly to unusually weak buying in Q1 2014………………………………………..Full Article: Source

Speculating on commodities can add diversity to your portfolio

Posted on 17 June 2015 by VRS  |  Email |Print

Anyone with an equity fund that tracks the S&P 500 has something close to 10 per cent of their investment in commodities companies, such as oil and gas producers or the miners of metals and minerals. For anyone who owns the FTSE 100, the figure is more than 20 per cent, largely because BP and Shell dominate the UK stock market.
Yet an increasing number of financial advisers suggest that investors should also carve out an additional piece of their portfolio to invest directly in commodities………………………………………..Full Article: Source

China, India are ‘changing the nature’ of gold bullion markets

Posted on 17 June 2015 by VRS  |  Email |Print

There is a shake-up in the gold market—and emerging markets like China and India are to blame. Emerging-market demand is ‘changing the nature of the bullion market,” HSBC analysts, led by James Steel, said in a note on Tuesday. Investment demand was the primary driver of gold until recently, but “price-sensitive EM demand is an increasingly important driver of gold prices, they said.
EM buyers and sellers “largely define” the range for gold—with prices near $1,100 an ounce attracting buyers, but prices near $1,300 causing buyers to “shy away from purchases,” the HSBC analysts said. Gold futures GCQ5, -0.06% settled at $1,180.90 on Tuesday………………………………………..Full Article: Source

Saudi Arabia’s efforts toward diversification cushion oil price drop

Posted on 15 June 2015 by VRS  |  Email |Print

Although Saudi Arabia has substantial financial reserves to withstand low oil prices over the next few years, recent government spending has intensified the need for longer term fiscal, environmental and resource sustainability in the Kingdom, according to a new report commissioned by ICAEW titled “Economic Insight: Middle East Q2 2015” produced by Cebr, ICAEW’s partner and economic forecaster.
Lower oil prices will have a greater impact on Saudi Arabia’s economic growth over the medium rather than the short term. As a result of the government’s decision to allocate additional funding to social activities like education, the breakeven crude oil price has surged from just under $75 in 2009 to $90 in 2015………………………………………..Full Article: Source

Inflation fears drive commodities stakes

Posted on 11 June 2015 by VRS  |  Email |Print

Multi-managers are tip-toeing into commodities to protect their funds against an anticipated uptick in inflation. Expectations have increased in recent weeks that inflation could rise more quickly and higher than previously anticipated. Bank of England governor Mark Carney has predicted a 1 per cent rate by the end of the year.
The fears about rising prices come as the UK registered its first negative consumer prices index (CPI) reading since 1960 last month. While strategic bond managers have been buying up inflation-linked and shorter-dated bonds, multi-asset managers have favoured commodities………………………………………..Full Article: Source

Saudi Arabia, Iraq Push OPEC Over Its Ceiling

Posted on 11 June 2015 by VRS  |  Email |Print

OPEC is producing nearly a million more barrels of oil each day than the target the cartel set last week, and the bulk of the excess is coming from two countries: Saudi Arabia and Iraq. Iraq pumped about 3.8 million barrels a day in May, according to a monthly report by the Organization of the Petroleum Exporting Countries, a level that, if sustained, would set a national record.
Saudi Arabia said it put out 10.3 million barrels a day, a historically high figure up almost 600,000 barrels since its pivotal decision last year to abandon its usual strategy of defending oil prices by cutting production………………………………………..Full Article: Source

New EU rules may hasten commodity liquidity flight

Posted on 09 June 2015 by VRS  |  Email |Print

Planned EU regulations on position limits in commodities are fuelling intense debate about whether the move could prompt traders to flee to Asian markets, further hurting European liquidity and potentially hurting economic growth. Restrictions on banks and capital requirements has already subdued enthusiasm for commodity trading.
The new rules aimed at stopping abuses of pricing power on commodity markets will encompass position limits, or curbs on how much one trading house can hold of a specific commodity, possibly on thousands of futures contracts………………………………………..Full Article: Source

China Now World’s Largest Oil Importer; Effect on Global Market

Posted on 09 June 2015 by VRS  |  Email |Print

Although data opacity makes objective analysis difficult, market observers reported in April that China has surpassed the United States as the world’s largest oil importer. This statistical inflection point needs context to understand global consumption trends.
While oil bulls are anxious about China’s reduced crude growth appetite, fundamental shifts in Chinese currency and domestic consumption strategies point to long-term growth in Chinese hydrocarbon consumption generally………………………………………..Full Article: Source

OPEC adjusts to new oil market reality: Kemp

Posted on 09 June 2015 by VRS  |  Email |Print

OPEC has never really been a “cartel” in the conventional sense of an organisation that agrees to restrict output to maximise revenues. So its decision on Friday not to cut production was entirely predictable and the only practical option open to its members.
The strategy of maintaining production even as prices fall, led by the Saudis but now more or less embraced by most of the organisation’s membership, is really the only sensible course. Most traders sense this: the price of Brent for delivery in December 2015 has been virtually unchanged since February and barely moved on Friday………………………………………..Full Article: Source

OPEC agrees to keep pumping as oil glut fears persist

Posted on 08 June 2015 by VRS  |  Email |Print

The decision defers discussion of several tricky questions set to arise as members such as Iran and Libya prepare to reopen the taps after years of diminished production. Oil group OPEC agreed to stick by its policy of unconstrained output for another six months on Friday, setting aside warnings of a second lurch lower in prices as some members such as Iran look to ramp up exports.
Concluding a meeting with no apparent dissent, Saudi Arabian oil minister Ali al-Naimi said OPEC had rolled over its current output ceiling, renewing support for the shock market treatment it doled out late last year when the world’s top supplier said it would no longer cut output to keep prices high………………………………………..Full Article: Source

Oil: OPEC’s Lengthy Suicide Note

Posted on 08 June 2015 by VRS  |  Email |Print

A market flooding production strategy many saw as intending to kill the US-centric shale revolution, has, if anything, only made it stronger. In essence the OPEC cartel is signing its own death warrant.
As always the communique suggests harmony and continuity but behind the scenes this was apparently a more fraught OPEC meeting than most. The ‘swing producer’ Saudi Arabia managed to keep things going the way it wants, albeit by continuing to flood the market with oil below even its own cost of production………………………………………..Full Article: Source

Commodities’ glut to drag on, BHP chief warns

Posted on 04 June 2015 by VRS  |  Email |Print

Oversupply of many commodities is likely to be prolonged, the chief executive of the world’s most valuable mining company has warned in a stark assessment of the gloomy outlook for the industry.
BHP Billiton’s Andrew Mackenzie said miners were facing a “changed environment” because of slower economic growth in China, by far the largest user of most important commodities, and said falling prices were having a “major impact on all companies in our sector”………………………………………..Full Article: Source

U.S. shale and OPEC, the altered balance of power

Posted on 02 June 2015 by VRS  |  Email |Print

Two landmark events this month will underscore the extent to which the oil market’s balance of power has been transformed by the shale revolution. In Washington, Congress will begin considering legislation to permit the export of crude oil from the United States, reversing a four decade ban put in place after the first oil crisis in 1973/74.
In Vienna, the Organization of the Petroleum Exporting Countries (OPEC) is expected to roll over its crude production target of 30 million barrels per day (bpd) even though prices have fallen more than 40 percent over the last 12 months. Rather than reduce production to boost prices, Saudi Arabia and the other OPEC members are prepared to continue pumping to defend market share and maximise revenue………………………………..Full Article: Source

China gold demand holding up well – new record ahead?

Posted on 02 June 2015 by VRS  |  Email |Print

We keep seeing reports in the mainstream media suggesting that Chinese gold demand is slipping away, but continuing strong gold withdrawal figures from the Shanghai Gold Exchange (SGE) seem to contradict these reports. While, as we have reported before, there are many doubts expressed as to whether SGE withdrawals are actually equivalent to Chinese consumer demand, there is no doubt that they do represent the underlying consumption situation.
Hong Kong-based Philip Klapwijk, the former executive chairman of GFMS prior to its acquisition by Thomson Reuters, did explain some of the discrepancies between the mainstream analysts’ Chinese consumption figures and SGE withdrawals (which differed last year by around 1,000 tonnes) as unrecorded cross border gold movement from mainland China into Hong Kong (technically illegal) in a presentation to the Bloomberg Precious Metals Forum a week ago ……………………………….Full Article: Source

Chinese are going for gold — and so should our miners

Posted on 01 June 2015 by VRS  |  Email |Print

China is oversupplied with gold, according to one analysis — only the Chinese don’t seem to be in on this news. Otherwise why would they be in the process of setting up what will be the world’s largest fund in terms of physical gold held, eventually to grow to $US16 billion ($20.9bn) worth of the yellow metal? Or indeed why would they have entered big deals over the past week to get a foothold in Papua New Guinea and Siberian gold production?
And central banks are no longer so laid back about gold ­reserves. Who can forget the decision by the central banks of Britain, Australia, Switzerland (the Swiss off-loaded 1550 tonnes), The Netherlands, Portugal, Spain and France to sell from the late 1990s, and at the bottom of the market into the bargain?…………………………………Full Article: Source

Turn out the lights as commodity spending boom ends

Posted on 28 May 2015 by VRS  |  Email |Print

Australia, one of the engine rooms of the decade-long global commodity boom, is forecasting a staggering 90 per cent plunge in spending on projects, calling time on its biggest resources bonanza since the 1850s gold rush. After a collapse in prices from oil to iron ore, the value of the nation’s approved and financed mining and energy projects is forecast fall to about $15 billion in 2017, from $226 billion at the end of April.
Planned iron ore projects worth at least $10 billion have been canceled since October, according to the Department of Industry and Science. Billionaire Gina Rinehart’s Roy Hill — due to ship later this year — is Australia’s last remaining mining project being developed worth $5 billion or more…………………………………….Full Article: Source

Where next for the oil industry?

Posted on 28 May 2015 by VRS  |  Email |Print

Oil companies have had to make dramatic changes to their view of the future following the collapse in the oil price at the end of last year. The surge in US shale oil production and Saudi Arabia’s reluctance to step aside and make room for the extra oil have forced the industry to reassess the viability of their exploration and development efforts.
Cuts to capital expenditure have been made and then redoubled. Even so, profits have fallen sharply for the big oil companies in the first months of 2015, whilst some exploration and production companies have been forced to reclassify their higher cost reserves as uneconomic at current prices…………………………………….Full Article: Source

Opec backing Saudi Arabia’s plan to keep supplies elevated

Posted on 28 May 2015 by VRS  |  Email |Print

When Saudi Arabia argues next week that Organisation of Petroleum Exporting Countries (Opec) should keep up production to fight the rise in US shale oil levels, prices will be on its side.
Crude plunged for eight of nine weeks prior to group’s November gathering, when the kingdom faced down opposition from the majority of fellow members, who advocated output reductions to tackle a global glut. With oil companies around the world cutting investment, US output peaking and prices up, Saudi Arabia’s strategy will be extended at Opec’s semiannual meeting on June 5, say Societe Generale and Bank of America…………………………………….Full Article: Source

India’s proposed gold deposit scheme could be a game-changer worldwide

Posted on 26 May 2015 by VRS  |  Email |Print

If the much-vaunted gold deposit scheme that seeks to tap into the country’s idle stock of 20,000-22,000 tonnes of the yellow metal succeeds in unleashing a fraction of that trapped wealth into the market, a likely supply-demand imbalance will turn the bullion market into a topsy-turvy state, said analysts.
Two likely scenarios — a supply glut and consequent price crash — that may emerge if India succeeds with its landmark gold monetisation plan will have a game-changing impact on the global precious metal industry………………………………………..Full Article: Source

Commodities, precious metals funds outflows biggest since 2013 -Lipper

Posted on 22 May 2015 by VRS  |  Email |Print

Investors in U.S.-based funds pulled $597 million out of funds that specialize in commodities and precious metals in the week ended May 20, data from Thomson Reuters’ Lipper service showed on Thursday. The outflows were the biggest since December 2013. Stock funds posted $1.7 billion in outflows over the latest week after attracting $3.7 billion in inflows the prior week.
U.S.-based non-domestic-focused stock funds attracted $3.3 billion of inflows, their 15th straight week of net new cash. “I’m speculating here but possibly stronger economic news caused investors to pull money out of commodities and into stocks,” said Patrick Keon, research analyst at Lipper………………………………………..Full Article: Source

Kingdom built on oil foresees fossil fuel phase-out this century

Posted on 22 May 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s largest crude exporter, could phase out the use of fossil fuels by the middle of this century, Ali al-Naimi, the kingdom’s oil minister, said on Thursday. The statement represents a stunning admission by a nation whose wealth, power and outsize influence in the world are predicated on its vast reserves of crude oil.
Naimi, whose comments on oil supply routinely move markets, told a conference in Paris on business and climate change: “In Saudi Arabia, we recognise that eventually, one of these days, we are not going to need fossil fuels. I don’t know when, in 2040, 2050 or thereafter.”……………………………………….Full Article: Source

Oil prices gain on ‘bullish’ US petroleum report

Posted on 21 May 2015 by VRS  |  Email |Print

Oil prices rose on Wednesday after data showed a drop in US petroleum supplies and production. US benchmark West Texas Intermediate for delivery in July rose 99 cents to finish at US$58.98 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for delivery in July gained US$1.01 at US$65.03 a barrel in London. Data from the US Department of Energy showed US crude supplies fell by 2.4 million barrels in the week ending May 15, with daily production of oil dropping 112,000 barrels a day to 9.26 million barrels a day………………………………………..Full Article: Source

Chinese Gold Standard Would Need a Rate 50 Times Bullion’s Price

Posted on 21 May 2015 by VRS  |  Email |Print

A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion’s price now, according to Bloomberg Intelligence. A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there’s no evidence the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published Wednesday.
Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said. Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote………………………………………..Full Article: Source

Commodities Rally Hit by Stronger Dollar

Posted on 20 May 2015 by VRS  |  Email |Print

Commodity prices tumbled on Tuesday, as a resurgent dollar and concerns about weakness in China’s economy pushed investors out of everything from crude oil to copper and corn. The S&P GSCI index, which tracks prices of 24 commodities, recorded its biggest one-day drop in more than a month and ended at its lowest since April 28.
Before that, commodities markets, led by a recent rebound in crude oil, staged a surprising two-month rally that had pushed the index to its highs for the year. Driving the gains was a faltering greenback, which many short-term investors took as a signal to scoop up raw materials………………………………………..Full Article: Source

This innovation will help U.S. win oil price war

Posted on 20 May 2015 by VRS  |  Email |Print

Although some US oil companies are struggling with low oil prices, a new wave of innovation is hitting the oil patch, allowing for a significant reduction in drilling costs. A variety of different improvements in production are starting to show up at all levels across the industry from small firms to oil majors. Statoil for example recently noted that it is experimenting with different types of sand and chemicals to improve production.
And a number of companies have noted that they are moving from drilling wells one at a time, on an ad hoc basis, to drilling multiple wells at once. GE Oil & Gas has produced variable-use pumps that can be turned on and off in order to save energy versus the previous 24-hour a day operation cycle………………………………………..Full Article: Source

Islamic commodity trading getting a boost

Posted on 20 May 2015 by VRS  |  Email |Print

Islamic commodity trading has become more popular in the financial world as of late because an accord seems to have been reached among scholars whether such commodity trading, which is conventionally done through futures contracts and not through the exchange of physical commodities, is permissible as per Islamic law.
So far, Islamic commodity trading has been done mostly by commodity murabaha whereby an institution agrees to purchase goods from a counterparty which promises to buy it back with an agreed mark-up at a later date………………………………………..Full Article: Source

Gold Trapped in Summer Doldrums Usually Means Volatile Wake Up

Posted on 19 May 2015 by VRS  |  Email |Print

For gold traders, summer has come early. Just don’t book your trip to the beach yet. Prices have seesawed for the past two months, leaving the metal trapped in the tightest trading range in two years, according to data compiled by Bloomberg through the end of last week. That’s historically a sign of more volatility to come.
When similar periods of calm blanketed the market, the metal swung 3.3 percent on average in the five days after breaking out of the band, almost twice the usual weekly change. Gold moved around $1,200 an ounce as bullish catalysts, such as signs of faster inflation, were offset by speculation the Federal Reserve will soon raise interest rates. While the weaker dollar usually draws buyers to gold, there’s also less demand for haven assets with equities near all-time highs………………………………………..Full Article: Source

Are precious metals breaking out?

Posted on 19 May 2015 by VRS  |  Email |Print

There is some talk among traders about precious metals breaking out. Silver broke a trendline dating back to summer 2011 and will make its highest weekly close in more than three months. Gold will make its highest weekly close in three months and gold miners had a very strong week. However, do these moves really register as breakouts? Not quite yet, say the charts.
First let’s start with the miners. The weekly candle charts for GDX and GDXJ are shown below along with their 80-week moving averages (in blue) and lateral resistance (in red). For GDX and other indices, the 80-week moving average has perfectly defined bull and bear markets going back five years………………………………………..Full Article: Source

Global outlook increasingly uncertain

Posted on 18 May 2015 by VRS  |  Email |Print

An increasing number of clouds are rolling in from Greece to Britain to the US, which may give investors a reason to pause their bullish bets on equities. Increasingly erratic and extreme shifts in asset pricing are unnerving investors everywhere.
On one level the backup in global bond yields makes sense. The deep-seated deflation that was built into bonds after last year’s oil price collapse now has to be rethought and repriced. But the speed and shock of the bond backlash has exposed illiquidity and overcooked, over-correlated investment positions………………………………………..Full Article: Source

Germans pile into gold amid Greek eurozone default fears

Posted on 15 May 2015 by VRS  |  Email |Print

Economic uncertainty in Europe and fear of a Greek default are turning people to buy gold bars and coins . German investors have piled into gold bars and coins in the first quarter of the year as a hedge against European Central Bank policy and the threat of a Greek default bringing down the eurozone.
Latest figures from the World Gold Council show that Germans increased their buying of gold coins and bars of bullion by 20pc to 32.2 tonnes in the last quarter, the highest rate of purchases seen in a year. ………………………………….Full Article: Source

IEA: OPEC Battle for Oil Market Share Just Beginning

Posted on 14 May 2015 by VRS  |  Email |Print

A global battle for market share between OPEC and non-OPEC producers that has rocked oil markets and fed into the biggest price slump since the financial crisis is just getting started, the International Energy Agency said Wednesday.
Oil prices have plunged since June amid a glut in oil production driven by booming U.S. output and sluggish demand, a combination that threatened the market position of some of the world’s largest oil producers…………………………………….Full Article: Source

Why are commodity prices seeing divergent movements?

Posted on 13 May 2015 by VRS  |  Email |Print

Global commodity markets are currently witnessing divergent price behaviour. In recent weeks, crude oil and many base metals have seen sharp price spikes. On the other hand, there are commodities that have not seen any significant price movement during the same period. Debate among market participants is around factors that have driven prices of some commodities up notwithstanding the fact that fundamentals in some cases are weak.
Among base metals, copper and zinc prices gained about 8 per cent and nickel 11 per cent. Aluminium and lead moved up by 3-4 per cent. The most interesting aspect of the recent price behaviour is that exchange-traded commodities have rallied as headwinds have lost some velocity………………………………………..Full Article: Source

Opec revises up oil demand and cuts US supply forecast

Posted on 13 May 2015 by VRS  |  Email |Print

Oil cartel has upgraded its demand forecast on stronger European growth as US drillers struggle. The Organisation of the Petroleum Exporting Countries (Opec) has revised up its forecast for world oil demand this year on higher consumption in Europe’s biggest economies and cut its estimate for the growth in US supply.
The group of 12 major oil producers now expects demand for crude to increase by 1.18m barrels per day (bpd) of crude to 92.5m bpd in 2015. Opec’s latest closely watched market report said: “The upward movement of European oil demand during the second half of 2014 has continued and been enhanced during the first three months of 2015………………………………………..Full Article: Source

What an Increase in M&A Activity among Gold Miners Could Mean

Posted on 12 May 2015 by VRS  |  Email |Print

Gold traders were bullish for a second week on speculation a weaker dollar may support gold demand. As the U.S. dollar has seen sustained retrenchment lately, the “smart money” is taking the bullish-dollar bets off, as CFTC data show the value of positive bets in the futures pits have fallen to four-month lows.
Bullionvault’s Gold Investor Insight rose in April as clients added the most metal in 20 months. Investors sold the most gold from bullion-backed funds in anticipation of this week’s employment report potentially showing stronger job growth. Gold has posted three straight months of losses, the longest slump since December 2013. The latest payrolls report, which showed a net increase of 223,000 for April, added to recent pressure on gold………………………………………..Full Article: Source

Silver no longer the poor man’s gold as solar demand surges

Posted on 12 May 2015 by VRS  |  Email |Print

New industrial uses for the precious metal could result in demand surging. Silver has been mined for thousands of years. But for most of the 20th century it was the poor man’s precious metal, its value eclipsed by the enduring lure of gold.
The first big revolution in silver came in 1492 with the discovery of the New World, which opened up mining of the metal on a scale not previously seen. In the centuries that followed Hernán Cortés and the conquistadors’ destruction of the Aztecs, Peru, Bolivia and Mexico accounted for three-quarters of all world production and trade in the metal………………………………………..Full Article: Source

Commodities bulls boosted by oil recovery

Posted on 11 May 2015 by VRS  |  Email |Print

Commodities from copper to iron ore have rebounded, helped by a rising oil price and a weaker US dollar, raising the possibility of investors taking a more positive view on a sector that has suffered years of negative returns. After a poor end to 2014, sentiment has started to improve, helped by a recovery in energy.
The Bloomberg Commodity index, which tracks 22 exchange traded commodities but is weighted towards oil, briefly turned positive for the year on Wednesday as crude approached $60 in the US and $70 in the rest of the world………………………………………..Full Article: Source

Reports of demise of oil “exaggerated”: OPEC research chief

Posted on 11 May 2015 by VRS  |  Email |Print

Demand for oil will continue to rise for the next 25 years, driven by emerging economies, particularly those from Asia, according to Omar Abdul-Hamid, the director of OPEC’s Research Division. “News of the end of oil has been exaggerated,” Abdul-Hamid said in a recent interview with an in-house magazine published by Siemens. “We saw on average 91 million barrels of demand every single day in 2014. By 2040 we expect 111 million barrels of demand per day.”
“Demand growth mainly comes from emerging economies and developing countries, particularly in Asia, and from OPEC member states. Their demand more than compensates for shrinking use in highly developed countries,” he said. He added that OPEC saw that there remained sufficient global oil resources to satisfy the growing demand………………………………………..Full Article: Source

ETFs poised to outstrip hedge funds

Posted on 08 May 2015 by VRS  |  Email |Print

The high-profile hedge fund world is about to be surpassed in terms of total assets by the unstoppable juggernaut that is the exchange-traded fund (ETF) industry, new research shows. Assets held globally in ETFs reached $2.93trn (£1.9trn) at the end of the first quarter of this year, according to research and consultancy firm ETFGI.
Meanwhile, a report from Hedge Fund Research has revealed there was $2.94trn in hedge funds at the same time. The difference in assets is the closest it has ever been (see top chart) and ETFGI predicts that given the much faster rate of inflows into ETFs seen in recent years, the tracker funds should overtake hedge funds within the second quarter of this year………………………………………..Full Article: Source

Saudi Arabia: More to the market than oil

Posted on 08 May 2015 by VRS  |  Email |Print

Oil may be Saudi Arabia’s bread and butter but as the Middle East’s largest bourse gets set to open its doors to foreigners, investors may want to focus their attention outside the energy sector.
“There are 162 listed companies and the largest by market cap is a pretty diverse group: Technology, construction, financial services, retail, and chemicals. There are lots of different sectors that an international investor can enter,” said Joel Whitaker, senior vice president of global research at Frontier Strategy Group………………………………………..Full Article: Source

Rises in yields, commodities hint at global reflation

Posted on 07 May 2015 by VRS  |  Email |Print

A rapid revival of commodity prices and a sudden sell-off in top-rated, low-yielding bonds have signalled the passing of this year’s global deflation scare, forcing a rethink of both the consumer price outlook and investments worldwide.
The epicentre of the rapid slide in bond prices has been the euro zone, where yields on 10-year German paper have more than quadrupled to 0.595 percent in just five days, erasing all the price gains made this year. Specific triggers for the turnaround since last week are hard to identify, but the continued recovery of oil prices and news of the euro zone emerging from four months of deflation may have been tipping points………………………………………..Full Article: Source

OPEC unlikely to cut in June without non-OPEC as oil rebounds

Posted on 07 May 2015 by VRS  |  Email |Print

The jump in oil prices has been supported by stronger-than-expected demand growth and a slowdown in crude supply, and is likely to continue into the second half of this year, a senior Gulf OPEC delegate said on Wednesday.
Some OPEC members are trying to bring major non-OPEC producers such as Russia on board in cutting supplies, as the Organization of the Petroleum Exporting Countries is unlikely to curb output alone when it meets on June 5 without the participation of non-OPEC countries, the delegate said………………………………………..Full Article: Source

Fate of commodities is linked to dollar

Posted on 06 May 2015 by VRS  |  Email |Print

Amonth or so ago we highlighted a research note from Barclays that showed how investors were continuing to retreat from commodities. Long-term readers will not be surprised to learn that looks to have marked a turn of fortune for the sector. The Continuous Commodity Index is an equally weighted measure of 17 commodity futures, including energy, base metal and agricultural benchmarks, along with precious metals, too.
As such, it is a useful gauge of sentiment towards the broad asset class. The CCI hit a five-year low in March but has trundled higher of late, forming what chartists might consider a solid looking base………………………………………..Full Article: Source

Copper bulls take charge on supply, China bets

Posted on 06 May 2015 by VRS  |  Email |Print

Copper’s longest rally in almost a decade pushed the metal into a bull market on signs that supplies are tightening just as speculation mounts that demand from China will rebound. Glencore, the world’s third-biggest copper-mining company, said output of the metal slid 9 per cent last quarter partly as ore grades fell.
The Baar, Switzerland-based company’s results add to supply concerns after a disruption in February from an electrical failure at a site owned by BHP Billiton. Almost a 10th of global output is at risk of being lost due to labor disruptions this year, Barclays estimates………………………………………..Full Article: Source

All eyes are on iron-ore rally

Posted on 05 May 2015 by VRS  |  Email |Print

By last month iron-ore prices stood at just a third of their 2011 highs, according to the World Bank’s latest quarterly Commodity Markets Outlook, which was released last week. The iron-ore market has been savaged as new, low-cost supplies have come online — mainly from Australia but also from Brazil — while Chinese demand growth is reducing as China’s economy slows. The steel industry consumes almost all of the world’s iron-ore output and China now produces half of its steel.
Not surprisingly, then, the market hangs on every twist in the Chinese economic saga — which is why speculation in recent weeks that China’s authorities might take extra steps to stimulate the economy has helped to cause a sharp bounce in the iron-ore price globally, and an even sharper jump domestically in the share price of SA’s largest iron-ore producer, Kumba Iron Ore………………………………………..Full Article: Source

These risks threaten the recent commodity surge

Posted on 04 May 2015 by VRS  |  Email |Print

The recent resurgence in certain commodities such as oil, copper and zinc must feel pretty good to investors — especially those in Canada — who have been hit hard by the slump in natural resources in recent years. But it may be better if investors hold off getting excited for now. The rebound could very well have legs, but it could just as easily fizzle in the days and months ahead, say analysts.
“After a dismal finish to 2014, dominated by the collapse in oil prices, sentiment towards commodities is turning more positive again,” said Julien Jessop, analyst at Capital Economics, in a note to clients………………………………………..Full Article: Source

Why they prefer commodities to equities

Posted on 04 May 2015 by VRS  |  Email |Print

Bengaluru-based Suby Mathews quit his high-profile banking job four years ago to pursue trading full time. Mathews too started off with equities and switched to commodities five years ago. Why commodities? The longer trading window, though it makes for more volatility, provides an opportunity to make more money. “The market is open till late in the night, which gives numerous short-term trading opportunities, albeit with a bit more risk,” he explains.
So, what are his favourites? He prefers to trade energy — crude oil and natural gas — and occasionally trades in gold too. Does he limit himself to just commodities? He trades in Nifty futures and options and occasionally in currency futures………………………………………..Full Article: Source

The Shale Boom Has Already Gone Bust - At Least For Now

Posted on 04 May 2015 by VRS  |  Email |Print

The meteoric rise in U.S. oil production has ended, easing a global glut and driving a rebound in crude prices from below $50 a barrel, according to crude trader and hedge fund manager Andrew J. Hall.
Oil production from Texas to North Dakota peaked at almost 10 million barrels a day in February and has been falling since then, Hall said in a letter Friday to investors in Astenbeck Capital Management LLC, his commodities hedge fund. A drastic reduction in drilling rigs is starting to shrink U.S. oil output, according to U.S. government data cited by Hall………………………………………..Full Article: Source

Saudi prince sees power grow in oil restructuring

Posted on 04 May 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s largest oil exporter, has restructured its hydrocarbon sector by splitting the state oil company from the oil ministry in a move that consolidates the power of the king’s son over the economy. King Salman bin Abdel Aziz al-Saud formed the 10-member Supreme Council for Saudi Aramco, headed by his son, Deputy Crown Prince Mohammed bin Salman, to oversee Saudi Aramco, the state oil company.
The council will include the ministers of oil, finance, economy and the central bank governor, among others. It is the latest measure to concentrate power in the hands of the prince, who this week was picked as second in line to the throne. In January, his father appointed him defense minister and head of the council on economic and development affairs, which will co-ordinate economic reforms as the kingdom copes with lower oil prices………………………………………..Full Article: Source

OPEC, Russia becoming unlikely allies

Posted on 30 April 2015 by VRS  |  Email |Print

The slump in oil prices is leading to an unlikely convergence of interests between Russia and OPEC which have traditionally seen each other as rivals. Russia will meet with OPEC on June 2-3 to discuss production adjustments in order to arrest falling oil prices, Energy Minister Alexander Novak said in Moscow.
The meeting will be held before the Organization of the Petroleum Exporting Countries gathers in Vienna on June 5 to discuss the global market. According to Russian officials, the country is on course to lose $180 billion this year from slump in oil prices………………………………………..Full Article: Source

Commodities Rout Over … For Now

Posted on 29 April 2015 by VRS  |  Email |Print

Commodity prices continue to be overwhelmed by slack demand, over-supply in many parts of the complex, a strong U.S. dollar, and weak economic growth. Add to this the ever present geopolitical factors (an inevitable and key component of price formation). Continued price weakness (and volatility) across the complex continues. Many consumers, meanwhile, are reaping the short term benefits.
Commodities remain the dismally performing asset class, with the slowdown in China, over-production, extensive QE, and dollar strength among those continuing to undermine prices. However, prices have been declining so much for so long now that we may have reached a short-term price bottom, beyond which it’s difficult for any more softening………………………………………..Full Article: Source

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