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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

India’s gold demand down 5.68% in March quarter

Posted on 29 April 2015 by VRS  |  Email |Print

India’s gold consumption declined by a marginal 5.68 per cent in the quarter ended March this year, primarily due to expectations of a cut in import duty. In terms of consumption, India continued to lag China, with a wide gap of 27 per cent.
Data compiled by global consultancy GFMS showed India’s overall gold consumption stood at 179.5 tonnes in the quarter, against 190.3 tonnes in the year-ago period. While jewellery consumption rose a marginal two per cent to 148.5 tonnes, the investment segment reported a steep 30 per cent decline at 31 tonnes………………………………………..Full Article: Source

World’s commodity trading houses have their sights set on Iran thaw

Posted on 23 April 2015 by VRS  |  Email |Print

The world’s largest commodity trading houses are first in line to profit from the much expected return of Iran to global markets as Tehran and Washington enter into the final three months of nuclear talks. While the global oil industry has been seen as the biggest beneficiary of a thaw, commodities’ traders including Cargill, Glencore, Vitol, Trafigura and Louis Dreyfus Commodities have a long history in Iran, helping to export its oil and import daily basics like gasoline, wheat and rice.
The US and European sanctions, designed to stop oil and gas trading, are also limiting the traders’ ability to sell food commodities, because of banking and shipping restrictions. With a population of almost 80 million and the prospect of strong economic growth once sanctions are lifted, Iran offers one of the world’s biggest trading opportunities……………………………………Full Article: Source

Wall Street Bets on Oil Price Rally

Posted on 23 April 2015 by VRS  |  Email |Print

If the whims of speculators are anything to go by, then oil markets are poised for a rebound. Data from the Commodity Futures Trading Commission show that bullish positions on WTI have reached their highest levels in eight months. Speculators make bets on the price of crude — long or short — depending on where they think prices are heading. Not since the end of the summer in 2014 have so many investors put money on the line, betting on a price rise.
Obviously, elite investors are not always right. Few saw the bust coming. But the mounting belief that the worst is over for oil provides a bit of evidence that prices could be on the mend……………………………………Full Article: Source

The gold rush in Dubai

Posted on 23 April 2015 by VRS  |  Email |Print

Stability in gold prices combined with festivals have led to brisk gold and diamond buying across the country. Retailers said the number of customers who buy gold and diamond jewellery has increased in the recent years. “We witness a surge in sale especially during occasions such as Akshaya Tritiya and Dhantheras. Diamond jewellery, especially rings and pendants have also become increasingly popular nowadays,” said a representative of Malabar Gold.
“The sale of gold bars and coins across our outlets in the UAE have also risen considerably because people are now more aware of the benefits of gold investment. They know that in the long term they will benefit from the soaring prices,” he said……………………………………Full Article: Source

BlackRock says more commodities pain on the way for Australia

Posted on 22 April 2015 by VRS  |  Email |Print

The steep slide in commodity prices has yet to take its full toll on the Australian economy, BlackRock Australia head of fixed interest Stephen Miller says. “I am a bit more negative on the economy than most,” Miller told The Australian Financial Review.
“The reason is that the expectations of capital expenditure numbers that were released in late February were very worrying. As expected, mining investment fell off a cliff. But there was very little evidence that investment in other parts of the economy was occurring to take its place. “I think that the decline in commodity prices has yet to flow through to the economy. Just as higher commodity prices provided a massive income boost in the period up to 2013, they’re now providing a massive income contraction.”………………………………….Full Article: Source

Sluggish Oil Demand Emerges As A Potent Factor In The Peak Oil Debate

Posted on 21 April 2015 by VRS  |  Email |Print

Peak oil isn’t what it used to be. That’s not simply because the theory of global oil supply peaking has been postponed courtesy of the U.S. production rebound, it is also because a second meaning to the expression is making a return, and that’s peak demand. A fresh glimpse of demand for oil peaking came last week in the release of the April edition of Oil Market Report by the International Energy Agency.
While most interest was in oil supply, a natural focus given the glut which has depressed the price of oil, there was a more important factor in the report and that was the modest demand growth forecast from the agency…………………………………..Full Article: Source

Where will be Gold heading in the next 18 months?

Posted on 21 April 2015 by VRS  |  Email |Print

We see $1,200/ounce ($1,200/oz) gold and $17/oz silver over the next 18 months. That’s what we use to value companies. The downturn in commodity prices has led to a decline in exploration and development spending as companies have reduced spending both as a result of lower commodity prices and the reduced availability of capital.
Spending has been declining since 2012, after the gold price peaked in 2011. This is similar to what happened in 1997 through 2001; however, in 2002 global production started to decline, which coincided with a rise in the gold price starting in 2001. About the same length of time has expired since gold peaked in 2011 and exploration spending in 2012. With global mine production likely to decline in 2016 or 2017, a rally in the gold price could be on the horizon; however, the timing is uncertain…………………………………..Full Article: Source

Developing nations’ commodity dependence rising

Posted on 20 April 2015 by VRS  |  Email |Print

The exact magnitude of dependence that many developing countries have on commodities export is not well understood, but the latest edition of UNCTAD’s ‘State of commodity dependence 2014’ aims to fill this gap.
A country is considered ‘commodity dependent developing country’ (CDDC) when its commodity export revenues contribute to more than 60 per cent of its total good export earnings, according to the report. In the case of Pakistan, the report said commodity exports as a percentage of GDP remained at 2.8 per cent as compared to 2.9pc in the past……………………………………Full Article: Source

China economic stimulus may do little for commodities: Russell

Posted on 16 April 2015 by VRS  |  Email |Print

It used to be a fairly safe bet that weak Chinese growth numbers would spark government stimulus measures, thereby boosting commodity import demand and prices. While the soft first quarter gross domestic product (GDP) numbers may well result in a relaxation of monetary policy and measures to boost infrastructure spending, it’s also likely that commodity volumes and prices won’t respond much.
GDP rose 7 percent year-on-year in the first quarter, in line with forecasts but still the slowest rate in six years. But in many ways China doesn’t really look like an economy growing at 7 percent, with exports plunging in March, power generation dropping 3.7 percent, the biggest fall since 2008, and a host of other indicators pointing to sluggish growth………………………………………..Full Article: Source

What will happen to gold price after Greek exit

Posted on 16 April 2015 by VRS  |  Email |Print

New study shows Greek bond yields as proxy for euro-zone break-up risk is more reliable than the strength of the US dollar in predicting the gold price. The real possibility of a Grexit is back on the cards. And with it a resurgent gold price.
New York gold futures moved back above the $1,200 an ounce level on Wednesday on news that Greece is preparing to declare a debt default by the end of April amid stalled negotiations with its international creditors………………………………………..Full Article: Source

Are Low-Risk High-Yield Investments Real?

Posted on 16 April 2015 by VRS  |  Email |Print

The low-risk, high-yield investment—it’s the Holy Grail of finance, or perhaps more aptly, the perpetual motion machine. One that rewards its holder out of proportion to the danger of holding it. But is there indeed such a thing as a vehicle that can combine the returns of a Lotto ticket with the safety of a Series I savings bond?
As a rule, the correlation between risk and reward in the market is almost perfectly positive. Common sense or a few seconds’ rumination should show you why that’s the case, but here’s an explanation anyway. The more people desire an investment because of its expected returns, the greater the demand, and thus the higher its price goes………………………………………..Full Article: Source

Next commodity boom a generation away, says Deltec

Posted on 15 April 2015 by VRS  |  Email |Print

The next commodities boom is “a generation away” for some key raw materials, and it is the commodity economies – such as Australia – that will provide the more compelling tactical opportunities to go short as the bubble deflates.
That is the view of Atul Lele, chief investment officer at Deltec, the private bank and wealth manager, who takes a negative view toward iron ore and the industrial metals but remains favourable on agricultural commodities. Even taking a long-term view, “all commodities are expensive”, he says. Iron ore had no credible prospect of a rebound in either the short or medium term, a blow for Australia’s materials sector, he said………………………………………..Full Article: Source

World Bank says sharp slowdown in China would hurt NZ, Australia

Posted on 14 April 2015 by VRS  |  Email |Print

A sharp slowdown in China would hurt commodity exporting countries like New Zealand and Australia and spill over into Pacific Island countries, the World Bank says in its latest East Asia Pacific Update. The global institution yesterday lowered its 2015 growth forecast for China, Asia’s largest economy, to 7.1 percent from a previous estimate of 7.2 percent, and its 2016 estimate to 7 percent from 7.1 percent.
China will release its first quarter gross domestic product data tomorrow, which is expected to show the economy expanded 7 percent from a year earlier, according to a Bloomberg survey of economists. That would be the slowest pace since the first quarter of 2009………………………………………..Full Article: Source

Canada’s economy is a disaster from low oil prices

Posted on 14 April 2015 by VRS  |  Email |Print

Low oil prices are threatening the health of Canada’s oil and gas sector, which in turn, is causing turmoil in Canada’s economy as a whole. The fall in oil prices is forcing billions of dollars in spending reductions for Canada’s oil and gas industry.
In February, Royal Dutch Shell (RDSA) shelved plans for a tar sands project in Alberta that would have produced 200,000 barrels per day. Last year, Petronas put off plans to build a massive LNG export terminal on Canada’s west coast………………………………………..Full Article: Source

Who’s winning the oil battle: OPEC or the United States?

Posted on 14 April 2015 by VRS  |  Email |Print

It’s been more than four months since the Organization of Petroleum Exporting Countries put global oil prices into a virtual free-fall when it decided at its semi-annual meeting in Vienna to not cut production. That has put a tremendous amount of pressure on what’s been called the shale oil revolution in North America and in the United States in particular.
Who’s winning so far? Well, that seems like trying to read tea leaves in a barrel of crude. “I think it’s two freight trains running at each other,” said Chris Faulkner, CEO at Dallas-based Brietling Energy………………………………………..Full Article: Source

Citigroup: ‘2016 to 2020 Period Could Be Supportive for Gold’

Posted on 14 April 2015 by VRS  |  Email |Print

This year hasn’t been a banner one for gold, with the precious metal advancing just 1 percent so far, but the precious metal might fare better next year, says Citigroup analyst Jon Bergtheil. A strong dollar, low inflation and expectations of a Federal Reserve interest-rate increase later this year have put a lid on gold in 2015.
The precious metal has been trading around $1,200. “Gold is still extremely vulnerable during 2015, but the 2016 to 2020 period could be supportive for gold,” Bergtheil writes in a report obtained by MarketWatch………………………………………..Full Article: Source

Hedge funds double bullish gold price bets

Posted on 14 April 2015 by VRS  |  Email |Print

Large scale speculators in gold futures continue to add to bets on a rising price even as the metal struggles to hold onto the $1,200 an ounce level. On Monday gold for delivery in June – the most active futures contract – drifted lower from Friday’s closing price hitting a low of $1,196.35 during late morning trade in New York.
Gold has recovered 4% from its 2015 low of $1,148.20 an ounce hit mid-March but has not been able to break through $1,220 an ounce resistance, stymied by a strong dollar………………………………………..Full Article: Source

With the end of commodities prices ’super-cycle’, UN panel lowers Latin American growth forecast to 1%

Posted on 10 April 2015 by VRS  |  Email |Print

The Economic Commission for Latin America and the Caribbean (ECLAC) has revised downward its economic growth projection for the region in 2015, forecasting a 1.0% increase in the regional Gross Domestic Product (GDP), the United Nations organization said today in a press release.
This revision reflects a global environment characterized by less economic dynamism than what was expected at the end of 2014. With the exception of the United States, industrialized countries have revised their growth estimates downward, and emerging economies continue to decelerate. The region is expected to keep economic growth at around the same level as in 2014 (1.1% according to the ECLAC’s annual report Preliminary Overview of the Economies of Latin America and the Caribbean 2014)……………………………………….Full Article: Source

Where Are Gold And Silver Heading Next?

Posted on 10 April 2015 by VRS  |  Email |Print

Gold and silver rebounded off their lows in the past few weeks thanks to the U.S. dollar’s pullback, dovish sentiment regarding Fed policy, oil’s bounce, and geopolitical turmoil. In the past week, however, precious metals have softened as the dollar bounced. Where are they headed next? Let’s take a look at some charts.
Gold bounced off of its $1,140 to $1,150 support zone after the March FOMC meeting that sent dollar reeling, but has since struggled at its key psychological level at $1,200. If gold’s bounce continues, $1,300 (the January high) is the next resistance level to watch. A decisive break below the $1,140 to $1,150 support zone or above the $1,300 resistance level is necessary to confirm gold’s next major directional move………………………………………..Full Article: Source

If History Is Any Guide, Big Deals Signal the Oil Market Is Bottoming

Posted on 09 April 2015 by VRS  |  Email |Print

Oil companies have a knack for picking the bottom in crude prices, and history may be about to repeat itself. Traders and analysts are speculating that Royal Dutch Shell Plc’s takeover of BG Group Plc for $70 billion announced Wednesday may be the first in a wave of acquisitions as Big Oil seeks to drive out costs following the rout in oil.
That happening would resemble the massive deals of the late 1990s that restructured the industry. As oil slid then, BP Plc bought Amoco Corp. for $56 billion in August 1998 and Exxon took over Mobil Corp. for $80 billion in December………………………………………..Full Article: Source

Many are still betting on oil comeback in 2015

Posted on 09 April 2015 by VRS  |  Email |Print

Surprisingly, the flow of crude oil is still accelerating, much like the money going into crude oil funds. Three of the largest crude oil funds include USO, OIL, and UCO. UCO is unique due to the fact that it’s an exchange-traded fund that uses leverage, mostly in the form of derivatives, to correspond to twice (200%) the daily performance of its underlying benchmark, the Bloomberg WTI Crude Oil Sub-index.
Since the fund corresponds to 2X the daily performance rather than total performance of its underlying index, mainly day traders, hedge funds, and speculators predicting an oil rebound would invest in such a risky investment………………………………………..Full Article: Source

US tightening proves problematic for commodities

Posted on 08 April 2015 by VRS  |  Email |Print

A misguided tightening of fiscal policy in the US could see commodities and commodity funds losing some of their steam, multi-asset fund specialists have warned. Schroders multi-asset investment fund managers Alastair Baker and Patrick Brenne said there was likely to be a continued strengthening of the dollar, which could bode ill for commodity investments if it were not handled properly by policy makers.
In an analyst note from the managers, they said: “If [tightening] is associated with continued positive economic growth then both the US dollar and commodities can go up………………………………………..Full Article: Source

Decline in US sheet steel prices slowing, turnaround still unclear

Posted on 08 April 2015 by VRS  |  Email |Print

Although US flat-rolled steel price erosion is creeping to a halt, a definitive turnaround point has yet to be established, sources said Tuesday. A service center executive pegged the bulk of the hot-rolled coil market within Platts’ specifications of $450-$460/st, down slightly from last week’s range.
Buyers and mills alike are sensing the bottom is near, he said, but no one wants to be the first to commit to a large order or institute a price increase. “When we believe we’re at the bottom, we’ll go in and get some extra tons,” he said. “But we haven’t seen it yet. We need the mills to draw a line in the sand. So we’re just buying what we have to buy and nothing more.” A source with a top-tier mill agreed that mills are hesitant to raise prices until the overall market environment improves………………………………………..Full Article: Source

Oil Surges on Signs of Growing Demand

Posted on 07 April 2015 by VRS  |  Email |Print

Oil prices surged to their biggest gains in two months on signs of rising demand in both the U.S. and Asia. Light, sweet crude for May delivery rose $3, or 6.1%, to $52.14 a barrel on the New York Mercantile Exchange. It was the U.S. benchmark’s biggest day of gains since Feb. 3 and its highest settlement since Feb. 17.
Data provider Genscape Inc. reported that supplies in Cushing, Okla., a key storage hub and the delivery point for the benchmark U.S. futures contract, fell by nearly 300,000 barrels between March 31 and April 3, according to a broker………………………………………..Full Article: Source

Once Over $12 Trillion, the World’s Currency Reserves Are Now Shrinking

Posted on 07 April 2015 by VRS  |  Email |Print

The decade-long surge in foreign-currency reserves held by the world’s central banks is coming to an end. Global reserves declined to $11.6 trillion in March from a record $12.03 trillion in August 2014, halting a five-fold increase that began in 2004, according to data compiled by Bloomberg.
While the drop may be overstated because the strengthening dollar reduced the value of other reserve currencies such as the euro, it still underlines a shift after central banks — with most of them located in developing nations like China and Russia — added an average $824 billion to reserves each year over the past decade. Beyond being emblematic of the dollar’s return to its role as the world’s undisputed dominant currency, the drop in reserves has several potential implications for global markets………………………………………..Full Article: Source

China Will Keep a Lid on Most Commodities

Posted on 02 April 2015 by VRS  |  Email |Print

Looser credit conditions or fiscal stimulus may temporarily boost China’s demand for coal, copper and iron ore, but the bounce would be fleeting. Mined commodity prices are unlikely to recover from recent lows, as China’s structural economic transition diminishes the main source of global demand growth.
Falling input costs and global overcapacity have reshaped the global steel industry: Prices will be lower for longer Weak crop prices and low farmer incomes are a significant headwind for fertiliser and seed companies, but we don’t expect the breeze will be too strong……………………………………….Full Article: Source

Goldman Sachs warns that peak gold may happen in 2015

Posted on 02 April 2015 by VRS  |  Email |Print

Goldman warns that peak gold may happen in 2015. New report says there are only “20 years of known mineable reserves of gold”. Discoveries of new sources of gold production peaked in 1995 despite major bull market .
Production lags new finds in 20 year cycle – Indicates 2015 may be year of peak gold production. Production in major gold mining countries has dropped in recent years. This will provide support and should lead to higher prices in long term. For many years, we have written about ‘peak gold’ and the ramifications of the underappreciated peak gold phenomenon for the gold market………………………………………..Full Article: Source

Copper supply constraints likely to support price in 2015: Barclays

Posted on 02 April 2015 by VRS  |  Email |Print

The copper price is likely to rebound in 2015 as “critical” producers struggle to ramp up production, Barclays said in a weekly note to clients late Tuesday. The bank says it believes copper prices will increase to a $6,313/mt average for the year.
Three-month copper closed the Tuesday London Metal Exchange kerb session at $6,040/mt. There has been much talk in the market of the copper price heading toward $5,000/mt in 2015………………………………………..Full Article: Source

Basic Materials: China Will Keep a Lid on Most Commodities

Posted on 01 April 2015 by VRS  |  Email |Print

Looser credit conditions or fiscal stimulus may temporarily boost China’s demand for coal, copper, and iron ore, but the bounce would be fleeting. Mined commodity prices are unlikely to recover from recent lows, as China’s structural economic transition diminishes the main source of global demand growth.
Falling input costs and global overcapacity have reshaped the global steel industry: Prices will be lower for longer. Weak crop prices and low farmer incomes are a significant headwind for fertilizer and seed companies, but we don’t expect the breeze will be too strong………………………………………..Full Article: Source

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