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Commodities gone wild

Posted on 02 April 2014 by VRS  |  Email |Print

Commodities are finally doing what they are supposed to do. Going up, yes, but more importantly, behaving unpredictably. Besides China’s growth, commodities’ popularity has owed much to the idea that their prices often move on random, unconnected events—war, for example—rather than just, say, economic forecasts. So, in theory, they help diversify a portfolio, enhancing risk-adjusted returns.
Prior to 2009, the Dow Jones-UBS Commodity Index’s 90-day correlation with the S&P 500 swung roughly between 0.2 and negative 0.2, close to zero and indicating no relationship. A score of one denotes lock-step correlation, negative one perfect inverse correlation………………………….Full Article: Source

A U.S.-Saudi move to lower oil prices?

Posted on 28 March 2014 by VRS  |  Email |Print

Could the U.S. unleash a flood of oil from the strategic petroleum reserve that would drive down prices in order to punish Russia? While the idea has been kicked around over the last few weeks – most recently by George Soros – it has also been dismissed as not a serious option.
Some say the impact of an oil sale, if it actually succeeded in lower prices, would be temporary. Saudi Arabia could cut back on production to keep oil prices at their current levels. Others decried the idea as contrary to the objective of the SPR, which has been setup to be used only in cases of emergency………………………………Full Article: Source

Are we trying to fight Russia through commodity prices?

Posted on 27 March 2014 by VRS  |  Email |Print

Although Russia has shown its might through hosting the Winter Olympics, followed by its annexation of Crimea, it’s still in a precarious position because of its reliance on taxes collected from the oil and natural gas industry.
The country receives over half of its revenue from oil taxes, and the country needs Brent crude prices of over $110 to balance its budget this year. In the face of Russian aggression, is the United States subtly pressuring Russia by threatening to flood the crude oil market, leading to falling prices? Additionally, is this week’s conditionally authorized approval of Jordan Cove LNG facility to non-Free Trade Agreement countries another warning shot to Russia?………………………………..Full Article: Source

China’s ‘airpocalypse’ good news for commodities

Posted on 27 March 2014 by VRS  |  Email |Print

The mining industry may be in the doldrums but Robert Friedland, the executive chairman and founder of Ivanhoe Mines, remains undaunted and sees commodity prices bouncing back in two or three years.
We make no apologies for giving you yet more of him, as he tells the best stories in the sector. Of hard and soft rocks, mineral grades and so on, he gives you all that, but tells you why it is important, and where this stuff is being used…………………………………Full Article: Source

Gold demand surge in China

Posted on 27 March 2014 by VRS  |  Email |Print

China’s Gold import from Hong Kong was reported to surge in February after more banks were permitted to import gold by the government amid the increasing demand for gold, the Chinese government gave authorized permission for more banks to carry out import of precious metals because of which Gold import in the country climbed a record high last month and is expected to continue.
According to expert analyst report, net import of China in February reached a total of 109.2 mt when compared to the 83.6 mt in January a year ago………………………………..Full Article: Source

2014 year of commodities (March update)

Posted on 26 March 2014 by VRS  |  Email |Print

That 2013 was a year when equities ruled supreme is now well recorded history. Generally speaking, expectations at the end of the year were that 2014 would be more of the same. Among the popularly reported forecasts were the S&P 500 going to 2,000 while $Gold would plunge to $1,050.
While the calendar will ultimately decide the wisdom of those forecasts, reality is already casting doubt on them. Perhaps the numbers in those forecasts were inadvertently switched. Demand for Gold and Agri-Commodities seems to be the dominant factor for prices this year, even after taking into account unique supply situations in some cases. As the year continues to unfold, investor attitudes on commodities, and in particular Gold and Agri-Commodities, need to adapt to the reality of the situation. ………………………………Full Article: Source

Is gold back?

Posted on 26 March 2014 by VRS  |  Email |Print

After slumping in 2013, gold has moved higher this year on worries over the Ukraine crisis and U.S. economic growth. While miners have welcomed the rally, the battle between the gold “bugs” and bears still appears far from decided.
“Gold excites people,” Nick Sheard, chairman of Australian minerals explorer Carpentaria Exploration, told The Diplomat. “If you’ve ever panned gold, when you see that speck of gold you get quite excited and it’s the same with investors.” He added, “Gold is still considered a reserve currency and whenever there’s a crisis you see strong buying.”………………………………Full Article: Source

Goldman Sachs: Gold’s rally won’t last

Posted on 24 March 2014 by VRS  |  Email |Print

Gold’s rally hasn’t convinced Goldman Sachs to change its bearish thinking on the precious metal. Gold has been one of the top performers across asset classes this year, up 11%, but Goldman says unsustainable catalysts have driven the rally. The firm doesn’t believe the recent gains are sustainable.
Three factors — weather-impacted U.S. economic activity, Chinese credit concerns and Ukraine tensions–have played a role in pushing gold prices higher in 2014. But Goldman sees these factors diminishing in the near future, which will prompt gold to tumble off current levels………………………………………..Full Article: Source

Global LNG demand set to tumble from April, China Coal demand weak: PIRA Energy

Posted on 21 March 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group believes that global LNG demand is set to tumble. In the U.S., Thursday’s EIA report highlighted the market’s continued above-normal reliance on inventories. In Europe, PIRA remains relatively unconcerned about a cut-off in gas flows through Ukraine. Specifically, PIRA’s analysis of natural gas market fundamentals has revealed the following:
Global demand is set to tumble starting next month and weak signals from key counter-seasonal markets like Brazil and India are emerging too. Spot price floors will be kept by a strong round of seasonal maintenance in Qatar in particular………………………………………..Full Article: Source

ETP volatility as market uncertainty continues

Posted on 21 March 2014 by VRS  |  Email |Print

Investors have been returning to exchange-traded products, backed by physical commodities, as geopolitical and economic turbulence unsettles the market, the associate director, research, at ETF Securities has said.
Nitesh Shah said over the past few months, investors have been building ‘long positions’ in physical commodities, such as silver ETFs, long copper ETFs and aluminium as a hedge against equity market fluctuations………………………………………..Full Article: Source

More volatility ahead for commodities

Posted on 20 March 2014 by VRS  |  Email |Print

A gradual unwinding of Chinese commodity finance deals - which have attracted as much as an estimated $US160 billion in ‘hot money’ - is likely to weigh on prices of the diverse range of commodities used as collateral.
The use of commodities such as gold, copper and iron ore, but also soybeans and rubber, as collateral for loans has become widespread over the past year in China, where tightly controlled lending policies restrict the amount of money that can be borrowed………………………………………..Full Article: Source

Next boom in commodities could be in agri products: Report

Posted on 19 March 2014 by VRS  |  Email |Print

The next commodities boom could be in the agriculture sector with middle class incomes boosting the demand for food items such as meat, dairy, sugar and edible oils, an HSBC report said. This could present investment opportunities in agriculture, it said.
“It may, in fact, be the case that food prices have the potential to outperform relative to metals and energy prices in the coming years, as growing middle class incomes continue to boost demand,” the HSBC Global Research said in its latest report………………………………………..Full Article: Source

Tide is turning in favour of commodities

Posted on 18 March 2014 by VRS  |  Email |Print

The resources team at Barclays think “the tide may at last be starting to turn for commodity investment flows”. Total commodity assets under management (AUM) rose by $13bn in February, they note, the first AUM growth since last August.
“This was mainly driven by price appreciation, but the $2bn net inflow of new investments, though modest, was notable because it included the first positive monthly net flow into physical gold assets for more than a year.”……………………………………….Full Article: Source

Commodity returns up, correlations down, flows stabilising

Posted on 18 March 2014 by VRS  |  Email |Print

Analysts at Barclays think the tide may at last be starting to turn for commodity investment flows. The three key positives so far this year are: very strong benchmark returns in the year-to-date; the return to negative correlations with other assets, and the consequent re-establishment of commodities as a viable alternative asset; plus the end to a long period of gold liquidation.
In February, total commodity assets under management grew $13bn, the first expansion since August 2013. This was mainly driven by price appreciation, but the $2bn net inflow of new investments, though modest, was notable because it included the first positive monthly net flow into physical gold assets for more than a year, as well as small allocations to commodity beta, the first in many months………………………………………..Full Article: Source

Is the commodities supercycle really over?

Posted on 17 March 2014 by VRS  |  Email |Print

Looking ahead to the rest of the year, commodities face a structural demand decline driven by emerging market slowdown, energy efficiency targets and environmental objectives. This supply will adapt but there will be a multi-year response lag.
On the demand side, emerging market growth and structure of growth have fuelled the supercycle and relate directly to emerging market urbanisation, changing dietary habits (more protein supporting grain prices as feedstock for cattle) and lifestyle choices, which seek to imitate those of the developed markets………………………………………..Full Article: Source

Stability and commodities put the squeeze on dollar

Posted on 13 March 2014 by VRS  |  Email |Print

Global stability concerns coupled with heavy losses in commodity prices have seen investors shift away from riskier assets and push the Australian dollar lower in the process.
Over the past 24 hours, the local currency has slumped close to US1¢. Chinese credit and growth worries have pushed commodity prices lower, and teamed with geopolitical events like the situation in Ukraine to weigh on the Aussie………………………………………..Full Article: Source

Fracking is turning the US into a bigger oil producer than Saudi Arabia

Posted on 12 March 2014 by VRS  |  Email |Print

The expansion in volumes of oil and gas produced by hydraulic fracturing is taking experts and politicians by surprise, with profound consequences for US geopolitics, and even Europe’s reliance on Russian gas.
Thanks to the success in pushing the frontiers of hydraulic fracturing, or “fracking”, to access reserves of oil trapped in shale formations, notably here in Texas and North Dakota, America is poised to displace Saudi Arabia as the world’s top producer. With that could come a hobbling of Opec and unforeseen shifts in US foreign policy………………………………………..Full Article: Source

China Gold Association forecasts 17pct drop in 1Q gold demand, annual demand steady – HSBC

Posted on 12 March 2014 by VRS  |  Email |Print

China Gold Association says gold demand may fall 17%, to 250 metric tons, in the first quarter of 2014, versus 300 tons in the first quarter of 2013, HSBC says, citing a Bloomberg News story. In the Bloomberg story, Zhang Yongtao, CGA’s vice chairman, said 2014 annual demand is forecast to be unchanged at 1,176 tons versus 2013, and 2014 annual mine supply is expected to remain mostly unchanged at 428 tons versus 2013, HSBC says.
“A simple math calculation based on Mr. Zhang’s forecast would indicate that China’s gold demand should be stronger for the rest of 2014 after 1Q, when compared to the same period in 2013. This may indicate that China’s strong appetite for gold is likely to be sustained well into 2014, in our view,” HSBC adds………………………………………..Full Article: Source

Global growth forecast to remain sluggish

Posted on 12 March 2014 by VRS  |  Email |Print

Global growth is likely to remain sluggish as a slowdown in the developing world undercuts gains in Europe and the United States, a leading international economic body warned Tuesday.
The Organization for Economic Cooperation and Development said one-off factors like the harsh winter weather in North America and the U.S. government shutdown mean “growth for the major advanced economies in the first half of 2014 will be somewhat slower than in the second half of 2013.”……………………………………….Full Article: Source

2014: A tough year for commodity prices

Posted on 11 March 2014 by VRS  |  Email |Print

Going into 2014, it looked like it would be a relatively benign year for commodity prices, aside from beef. However, prolonged droughts in California and Brazil, porcine epidemic diarrhea virus outbreaks, and instability in Ukraine have all conspired to make 2014 a food buyer’s nightmare.
California’s drought is driving up cattle, dairy and produce prices. Brazil’s drought has lit a fire under coffee, sugar and soybeans. Both corn and wheat have been affected by Russia’s meddling in Ukraine………………………………………..Full Article: Source

Why Ukraine and Russia matter to commodity markets

Posted on 10 March 2014 by VRS  |  Email |Print

Oil, gold and wheat prices are in the limelight after Russia’s invasion of Ukraine’s Crimea region, but the conflict may have significant consequences for other commodities too — including natural gas, palladium and potash.
“Concerns over economic sanctions against Russia will put short-term pressure on [commodities] supplies,” said Jeffrey Sica, president and chief investment offer of Sica Wealth Management. “There is certain to be a significant element of the stockpiling of commodities in anticipation of escalation in the conflict.”……………………………………….Full Article: Source

Commodities trade in Ukraine goes on

Posted on 10 March 2014 by VRS  |  Email |Print

Steel, grain and other commodity export deals are yet to be significantly affected by the growing crises in Ukraine which escalated on 6 March with a US restriction on visas for Russians and Ukrainians threatening Ukrainian sovereignty and the imposition of sanctions by the EU on 18 Ukrainians including ousted president Viktor Yanukovich, the former Prosecutor General, the Head of Security Service, Minister of Justice and some of their relatives or associates.
The presence of Russian troops in Crimea and in particular of Russian ships in the port of Sevastopol are a concern, particularly as Russia is now claiming sovereignty over Crimea and by extension, of all its ports………………………………………..Full Article: Source

‘China factor’ continues to determine future of commodities outlook

Posted on 07 March 2014 by VRS  |  Email |Print

Chinese demand for metals and minerals remains robust, although the pace of uptake is moving towards a plateau as the country enters a more mature economic phase, delegates at the Prospectors and Developers Association of Canada were told.
“There is a very clear correlation between Chinese gross domestic product [GDP] growth and commodity prices,” BCA Research chief strategist of the China Investment Strategy Yan Wang said. “When Chinese growth accelerates that’s good news for commodity prices, and when Chinese growth slows that’s bad news for commodity prices.”……………………………………….Full Article: Source

After buying up the world’s commodities, China gears up to trade more of them

Posted on 06 March 2014 by VRS  |  Email |Print

The Hong Kong Exchange is moving into commodity trading this year to cater to the changing needs of “China Inc.,” the bourse’s exuberant chief executive Charles Li told analysts and reporters in Hong Kong on March 4. “China’s commodity business needs to internationalize and we’ll be here,” he said, with “new products, new members and new partners,” including potential tie-ups with the mainland’s fast-growing commodity trading platforms.
His announcement is the latest sign that after investing heavily around the world to buy and mine the world’s raw materials, China’s next step is to plan an even bigger role in trading them………………………………………..Full Article: Source

Commodity prices rising In 2014, industrial metals are lagging behind

Posted on 06 March 2014 by VRS  |  Email |Print

After three years of weakness, commodity prices are finally showing some life. The new upward move has been reflected in commodity indexes such as the Thomson Reuters/Jefferies CRB commodity index, which provides dynamic representation of broad trends in overall commodity prices.
The two big gainers are coffee and natural gas, which are benefiting from a drought in Brazil and an unusually cold winter, respectively. Apart from the big gains in the agricultural and energy sector, the broad majority of food commodities are also reaching new highs. Precious metals are also showing strength since the start of the year………………………………………..Full Article: Source

Commodities’ base is crumbling

Posted on 05 March 2014 by VRS  |  Email |Print

Commodity bulls live and die by metrics of Chinese demand. So the analytical folks at Sanford C. Bernstein reviewed the scope of that demand through another, less-used indicator: China’s completion and announcement of infrastructure projects.
Big-ticket projects such as nuclear plants and high-speed rail that took off during Beijing’s stimulus splurge to fend off the financial crisis are winding down. The appetite to replace these with similar-sized projects is waning, Bernstein’s Michael Parker says. New ventures coming up are mostly smaller scale, such as subway tracks and electrical transmission lines………………………………………..Full Article: Source

Ukraine crisis flares up commodities prices

Posted on 05 March 2014 by VRS  |  Email |Print

The deployment of Russian military in Crimea is making global commodities markets traders jittery. As the tension between Russia and Ukraine flared up, speculative long positions were built in gold, which is generally seen as a safe haven during military hostilities.
It is still early days but if the situation gets out of hands and turns into a conflict then it will lead to rally in precious metals and create trouble for the Emerging Markets………………………………………..Full Article: Source

Ukraine and global commodities

Posted on 05 March 2014 by VRS  |  Email |Print

The crisis in Ukraine has introduced new event risk for commodity markets. Commodities play an important role for the Ukrainian economy since exports account for around 50% of Ukrainian GDP, of which commodities account for around 60% of all exports: Deutsche Bank Report.
The country’s commodity exports include agriculture, chemicals, metals and timber products. However, the country’s strategic position when it comes tonatural gas flows is, in our view, the most relevant………………………………………..Full Article: Source

No, China is not the ‘cookie monster’ of global commodities

Posted on 03 March 2014 by VRS  |  Email |Print

China’s coming for your water. Your food. Your oil. Your iron ore. The country has a “voracious appetite.” At least that’s the drumbeat you’ve been hearing in headlines over the last several years. With nearly 1.4 billion people and a surging economy, it’s easy to see why China’s resource demand has shaken world markets and generated outsized fears.
After all, oil prices spiked to an all-time high in 2008. Food prices hit a record high in 2011. True, China has launched an impressive series of projects to secure mines, farmland, and water resources, from Brazil to Zimbabwe to Papua New Guinea………………………………………..Full Article: Source

Keeping the faith in commodity trading

Posted on 28 February 2014 by VRS  |  Email |Print

The commodities trading landscape is changing. Faced with rising costs, increased regulation and directionless markets, big banks such as Deutsche Bank are retrenching or retreating from the sector. It is a trend that looks set to continue.
“Sentiment-driven and largely directionless markets, alongside declining client interest, has seen total revenues for the leading 10commodities investment bank businesses across the globe fall to just below a third of their peak, from $14.1bn in 2008 to $4.5bn in 2013, with no foreseeable prospect of recovery,” the UK’s financial watchdog, the Financial Conduct Authority, said……………………………………….Full Article: Source

Commodities forecast suffers

Posted on 27 February 2014 by VRS  |  Email |Print

As rising supplies and slowing demand compound dips that led to last year’s bear market in gold, copper and corn, Bloomberg reports that banks expect commodities to head that way again in 2014.
The super cycle that led commodities to almost quadruple since 2001 is reversing, with prices set to drop 3% in 12 months, reports Goldman Sachs Group Inc………………………………………..Full Article: Source

Several reasons why commodities prices could fall soon

Posted on 27 February 2014 by VRS  |  Email |Print

Commodities as a whole are outperforming the equity benchmark S&P 500 index so far this year. But can it last? Both gold and silver are up around 9% or so in 2014. On the energy side, crude oil gained 4% while natural gas has gained nearly 15%. As for stocks, the S&P 500 is just about flat for the year.
That may change, says commodities expert and portfolio manager John Stephenson of First Asset Investment Management. The author of “The Little Book of Commodity Investing” believes commodities may be a long-term buy but, for the time being, are not………………………………………..Full Article: Source

China’s falling currency could spark global tensions

Posted on 27 February 2014 by VRS  |  Email |Print

Whenever a major global economy reverses policy, global markets pay attention. That’s exactly what’s happening in response to the sharp, quick decline in China’s currency.
The Chinese yuan has fallen more than 1% against the U.S. dollar in the past week, after appreciating almost 40% in the past few years. Citing “people familiar with the central bank’s thinking,” The Wall Street Journal reports “China’s central bank engineered” the drop in order to reduce speculation in the currency………………………………………..Full Article: Source

Why commodity trading is the comeback kid

Posted on 26 February 2014 by VRS  |  Email |Print

Hedge funds continue to rush into commodities according to the Commitment of Traders report covering the week of February 18. The bullish bets on 24 US traded commodities jumped by 15 percent to 1,659,000 contracts of futures and options.
This the seventh weekly increase in a row has driven the exposure to the highest since April 2011 and an unprecedented 23 out of 24 commodities tracked in this were bought………………………………………..Full Article: Source

Gold is up 12pct: Has a new bull market begun?

Posted on 26 February 2014 by VRS  |  Email |Print

Is it premature to declare that gold’s bear market is finally over? It certainly looks that way to some chartists, who are making a big deal of gold’s double-bottom at the end of last year just below $1,200. Since then, bullion has risen by $140 an ounce, or more than 10%.
Even if gold’s bear market has ended, it was no slouch: From a September 2011 high of $1,925 an ounce the decline lasted for 27 months and took 38% off of bullion’s price. Gold-mining stocks had a particularly rough time: The NYSE Arca Gold Miners Index fell 70% from September 2011 to its December 2013 low………………………………………..Full Article: Source

Competing supply/demand fundamentals make commodities sector to watch in 2014

Posted on 25 February 2014 by VRS  |  Email |Print

Commodities are off to a wild start this year with extreme weather around the world playing a big part. Natural gas is leading the pack, up 30% off its January lows on a long stretch of extremely cold temperatures across the Midwest and East Coast.
Drought conditions in Brazil and California have sent coffee, sugar and cattle prices racing higher. Coffee is up 62%, its highest level since October 2012. Over the past three weeks, sugar is up 13%. Cattle is trading at record highs, up 7.5% over the past three and a half months………………………………………..Full Article: Source

Silver poised for bigger moves

Posted on 24 February 2014 by VRS  |  Email |Print

The Silver market has been running red hot recently, as traders have looked to push up the value of Silver on speculation that the US economy is weakening, and as risk appetite for precious metals comes back into vogue for traders and hedge funds.
Market momentum in the Silver market has been exciting, and liquidity and volatility are certainly very high, leading to opportunities for Silver. With its bullish trend line dominating the charts combined with positive market sentiment, it looks likely that further highs are on the horizon. ……………………………………….Full Article: Source

G-20 finance chiefs vow to boost world economy by $2 trillion over next 5 years

Posted on 24 February 2014 by VRS  |  Email |Print

Finance chiefs from the 20 largest economies agreed Sunday to implement policies that will boost world GDP by more than $2 trillion over the coming five years. Australian Treasurer Joe Hockey, who hosted the Group of 20 meeting in Sydney, said the commitment from the G-20 finance ministers and central bankers was “unprecedented.”
The world economy has sputtered since the 2008 financial crisis and global recession that followed. Progress in returning economic growth to pre-crisis levels has been hampered by austerity policies in Europe, high unemployment in the U.S. and a cooling of China’s torrid expansion………………………………………..Full Article: Source

NZ: Commodity export boom forecast

Posted on 20 February 2014 by VRS  |  Email |Print

Strong demand for New Zealand’s main commodity exports - particularly from China - has prompted the Ministry for Primary Industry to revise up its revenue forecast for the sector by $4.9 billion to $36.5 billion for 2013/14.
The ministry, in an update of last year’s Situation Outlook for Primary Industries, said the net effect of higher demand for dairy was a $2.7 billion increase in forecast dairy revenues over last year’s forecast for the 2013/14 year to June………………………………………..Full Article: Source

Commodities: Coiled and ready?

Posted on 20 February 2014 by VRS  |  Email |Print

While most traders white-knuckled the sharp equity drop last month, a much bigger (and more important) trend emerged… In case the market has distracted you, here’s what you’ve missed: Gold is up nearly 10% on the year…Silver is up 13%…
After a sharp drop in January, crude oil has risen more than 4.5% since Jan. 1…Thanks in part to a harsh winter, natural gas has spiked a whopping 31%… Due to drought concerns, soybeans are up more than 5.5%, while coffee has blasted higher by 38%………………………………………….Full Article: Source

China overtakes India in gold demand in 2013: WGC

Posted on 19 February 2014 by VRS  |  Email |Print

For the first time India lost its tag of the world’s largest gold consumer to China, which lapped up 1,065.8 tonnes of the precious metal in 2013, says a World Gold Council report. India’s demand came down to 974.8 tonnes following wide- scale curbs imposed by the government to tame hunger for the precious metal, according to WGC’s ‘Gold Demand Trend 2013′.
Despite the massive increase in customs duty and many restrictions that the Centre put on jewellery imports, India consumed more gold than 2012, when it stood at 864 tonnes. In China, the total demand stood at 806.8 tonnes in 2012. “While China has put in infrastructure that was in favour of gold, India has turned away from it………………………………………..Full Article: Source

Gold price endures rollercoaster ride

Posted on 19 February 2014 by VRS  |  Email |Print

The World Gold Council’s (WGC) annual report on demand trends for the precious metal reveals the inner workings of the market last year. While gold’s price endured something of a roller coaster ride, the fundamentals underpinning its value seemed to have been remarkably resilient.
Last year saw the largest volume increase in jewellery demand for 16 years as consumers across the globe reacted to lower gold prices, the WGC revealed. Full year demand was 2,209.5 tonnes, 17% above the 2012 figure and the highest level since the onset of the 2008 financial crisis………………………………………..Full Article: Source

Are commodities safe yet?

Posted on 17 February 2014 by VRS  |  Email |Print

After watching commodities take a beating over the past three years, investors may want to consider carefully treading back into the sector, financial advisers say. The average U.S. commodity-focused mutual fund and exchange-traded fund has gained 2.2% in 2014 through Thursday, according to Chicago-based investment-research firm Morningstar. Meanwhile, blue-chip stocks, as represented by shares of the SPDR S&P 500 ETF Trust, are down 0.91% over that period.
“Commodities still need to be approached with caution,” says Stephen Jury, global head of currencies and commodities at J.P. Morgan Private Bank in New York, which oversees $977 billion. “They’re not ready for another bull run.”……………………………………….Full Article: Source

China’s oil addiction growing

Posted on 17 February 2014 by VRS  |  Email |Print

Unless the Chinese government takes steps to cut oil consumption, China’s oil consumption may increase by 60% by 2030. Even worse, over 75% of its oil consumption will have to come from imports.
That comes from a new study out by China’s Development Research Center, which highlights China’s alarming trajectory – oil demand will continue to rise and meeting that demand will have to come increasingly from foreign sources. Li Wei, the Director of the Development Research Center, said that China must transform itself to avoid the security and environmental challenges this would bring………………………………………..Full Article: Source

China’s Commodity tapering and what it means for Brazil and South Africa

Posted on 14 February 2014 by VRS  |  Email |Print

When the Quantitative Easing began with the advent of the financial crisis of 2008, little did someone think that it would have in store yet another round of financial issues. Yes, coupled with easing which saw a deluge of Dollars hitting the markets, the banks in US and Europe brought down the interest rates to the position that it was in effect made to be practically irrelevant. The term, ‘near-zero interest rates’ represented the situation with absolute authenticity.
But after six years of a roller coaster ride, US began to see the return of growth. Easing was tapered and it currently stands at a monthly purchasing of $65 billion in bonds and mortgage backed securities by Fed………………………………………..Full Article: Source

Why are commodities rallying despite China fears?

Posted on 14 February 2014 by VRS  |  Email |Print

Societe Generale’s Cross Asset Research published their monthly Commodity Compass on Tuesday of this week. SG analyst Mark Keenan and Head of Commodity Research Michael Haigh suggest that the current turmoil in emerging markets is not likely to influence commodities price unduly.
They argue that commodity prices are in general tracking economic growth, and as long as China’s economy stays on track, commodity prices should be stable with an upward bias in 2014………………………………………..Full Article: Source

Betting on the next oil boom? You’re grasping at straws

Posted on 14 February 2014 by VRS  |  Email |Print

Unplanned interruptions in the global oil supply chain last year were about 30 percent higher than in 2013, the U.S. Energy Department said. Much of the problem was blamed on Libya, though sputtering from Kazakhstan’s giant Kashagan field played a factor as well. This year could be North America’s to lead in terms of secure production, but the story for 2014 is as certain as market predictions themselves.
The U.S. Energy Information Administration said crude oil supply disruptions from OPEC averaged 1.8 million barrels per day, but actually hit the 2.6 million bpd by the end of the year because of on-again off-again supplies from Libya………………………………………..Full Article: Source

Commodities rise to 2014 high as Goldman maintains bearish view

Posted on 13 February 2014 by VRS  |  Email |Print

Commodities climbed to the highest since December as extreme weather fueled supply concerns for crops and energy at a time of rising imports by China. Goldman Sachs Group Inc. says this year’s gains will be short-lived.
The Standard & Poor’s GSCI Spot Index of 24 commodities gained 0.2 percent to settle at 636.22 yesterday, after touching 639.93, the highest since Dec. 30. Coffee led gains, and cocoa reached the highest since 2011. Gold capped the longest rally since June 2012………………………………………..Full Article: Source

Commodities back in favour, says ETF Securities

Posted on 13 February 2014 by VRS  |  Email |Print

Cyclical commodities, especially industrial metals were favoured by investors. Platinum, copper and silver were the top three individual picks with platinum coming out well on top with 31% choosing it as their favourite, followed by copper at 26%. Silver followed suit with an average of 15% choosing it as a top performer in 2014. Gold also saw strong interest (with 13%) concluding the metal is still seen as a hedge against potential growth and financial risks in 2014.
The results confirm earlier predictions that if global economic growth remains on track, commodity performance will follow. Platinum and silver exchange-traded products (ETPs) received the largest inflows in 2013 with $1.3 billion and $841 million respectively as investors shifted away from gold towards commodities more positively correlated with the global industrial cycle………………………………………..Full Article: Source

Wall Street’s grandfathers of commodities to survive Fed revamp better than others

Posted on 13 February 2014 by VRS  |  Email |Print

As the U.S. Federal Reserve considers new ways of reining in banks’ trading in what it sees as risky physical commodity markets, Wall Street’s two oldest and biggest players may ultimately gain in stature.
Thanks to a longstanding legal exemption that Fed officials say limits their regulatory capacity, Morgan Stanley and Goldman Sachs may yet emerge from the regulatory upheaval that is upending banks’ commodities trading better-off than their peers, who face potentially tougher new rules………………………………………..Full Article: Source

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