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Gold Has Worst Outlook by Credit Suisse as Crude Favored

Posted on 23 May 2014 by VRS  |  Email |Print

Gold has the worst prospects among commodities over the next 12 months and crude oil has the best, according to an investor poll by Credit Suisse Group AG. (CSGN).
Seventy-one percent of respondents said gold has the worst outlook, and 16 percent said copper will be the biggest loser, the bank said in an e-mailed report today. Forty-nine percent expect crude oil to be the best performer, followed by a 27 percent vote for corn, according to a survey of about 160 participants conducted this week……………………………………..Full Article: Source

Platinum jumps on South Africa strike fears

Posted on 23 May 2014 by VRS  |  Email |Print

Platinum has risen to its highest level since September on concerns that a crippling four-month strike at South African mines will not be resolved soon. The precious metal, which is used in vehicle catalytic converters and jewellery, climbed 1.7 per cent to a nine-month high of $1,489.20 a troy ounce, as the stalemate between producers and unions continued.
Mediated talks between Anglo Platinum, Impala Platinum, Lonmin and the main workers’ union began on Wednesday. But Lonmin told Reuters that the industrial action might go on “for much longer” because the parties were still so far apart……………………………………..Full Article: Source

Want to shift economy away from volatile commodities? Look at Singapore: ICAEW

Posted on 22 May 2014 by VRS  |  Email |Print

The three large Asean economies of Indonesia, the Philippines and Thailand, which are striving to shift from significant commodity dependence to high value-added exports, could do worse than to look at Singapore and Malaysia’s experience, said ICAEW’s latest Economic Insight report.
For instance, in 2012, 33 per cent of Indonesian exports consisted of fuels and related materials, and 12 per cent consisted of animal and vegetable oils, fats and waxes. In comparison, 19 per cent and 0.1 per cent of total Singaporean exports consisted of these two commodities respectively. Even then, many of these exports are simply passing through rather than produced by Singapore………………………………………Full Article: Source

Geopolitical Changes Keeping Investors’ Interest in Gold

Posted on 22 May 2014 by VRS  |  Email |Print

According to the World Gold Council (WGC), the gold demand in Q1 2014 was 1,074 tonnes, three tonnes lower than in Q1 2013. Consumer demand, especially jewellery demand, has continued to drive gold demand. Central banks have net purchased 122 tonnes of gold, the 13th consecutive quarterly rise while ETP outflows have dropped to 0.2 tonnes for the quarter.
While the WGC described that the fundamentals and long-term demand trend have remained robust, the world largest gold-backed ETP, the SPDR Gold Trust, has just seen its lowest holdings since December 2008………………………………………Full Article: Source

The World Is Running Out of Gold

Posted on 22 May 2014 by VRS  |  Email |Print

How much gold would you have if you stole every bit that’s ever been mined? Not much—you’d be able to make a cube of solid gold with 60-foot sides. There just isn’t that much gold in the world, and it’s getting harder and harder to find it. In fact, our love of gadgets may be part of the problem.
In a report from the Wall Street Journal this morning, we learn that we’re only two decades away from exhausting the world’s gold supply if mining continues apace. How could we be running out of gold? It’s simple. As gold boomed in the 90s and 00s, the easy-to-access deposits were sapped of their supplies. Now, the gold being discovered is way deeper into the Earth, which means that discovering it takes a lot more work before it can be extracted………………………………………Full Article: Source

China gold demand drops

Posted on 21 May 2014 by VRS  |  Email |Print

China’s gold demand fell 18 percent in the first quarter as investors in the world’s biggest user bought fewer bars and coins, offsetting record interest in jewelry, the World Gold Council said.
Purchases declined to 263.2 metric tons in the three months through March from a year earlier, the London-based council said in a report today. While jewelry consumption rose 10 percent, demand for bars and coins sank 55 percent, accounting for about 40 percent of the global decrease…………………………………..Full Article: Source

Africa investors turn away from commodities

Posted on 20 May 2014 by VRS  |  Email |Print

Foreign investors pouring money into Africa are increasingly turning away from commodities-led projects to tap into the growing consumer market, while smaller, less-established countries are also getting a bigger lion’s share. In its annual report on Africa released last week, EY revealed the continent became the world’s second-most attractive investment destination in 2013, just behind North America. In addition, Africa’s share of global foreign direct investment (FDI) reached its highest level in a decade, at 5,7%, while capital investments grew by 12,9% in the same period.
But 2013 also saw some major shifts in investment trends on the continent. Mining and metals, for instance, are no longer the main beneficiaries of FDI and the list of the top 10 countries in FDI projects showed some surprising trends…………………………………….Full Article: Source

Why is the West betting against climate change?

Posted on 20 May 2014 by VRS  |  Email |Print

With wildfires ravaging San Diego County, this year’s fire season is getting off to an early - and destructive - start. A hotter and drier Southwest may result in the loss of the lion’s share of its forests to fire before this century is done, if extraordinary measures to protect them aren’t soon undertaken. Instead of extraordinary measures, however, Washington has made only token efforts to address this looming crisis.
That danger is already here for much of the West. Drought in Southern California and Texas, and near-drought elsewhere, means that forests are tinder-dry and expected to get even drier during summer. Which is scary - considering so many Americans now live or spend their summers in the “wildland urban interface,” the wooded areas in the West where fire danger is the greatest…………………………………….Full Article: Source

China’s New Normal: Less Stimulus for Commodity Producers

Posted on 19 May 2014 by VRS  |  Email |Print

Many economists believe that growth rates are revert to the mean in the long run. This is because it becomes harder to grow as one becomes larger.
For over three decades, China managed to grow significantly faster than the mean growth rate. In good times, the nation’s economy grew by double digits. In bad times, China grew by 7%. As a result of great growth rates, China’s economy grew from $2 trillion a decade ago to $8 trillion today…………………………………….Full Article: Source

Goldman Says Commodities Appeal as World Economy Recovers

Posted on 15 May 2014 by VRS  |  Email |Print

Commodities as an asset class remain appealing as the global economic recovery extends into 2015, according to Goldman Sachs Group Inc.
The bank raised its 12-month allocation for commodities to neutral from underweight, analysts led by Jeffrey Currie and Damien Courvalin wrote in a report dated yesterday. They increased their three and six-month price forecasts for nickel and rolled the 12-month predictions for aluminum and zinc forward to higher levels………………………………………..Full Article: Source

Ezra Levant: Putin’s new OPEC

Posted on 15 May 2014 by VRS  |  Email |Print

Fracking might seem like a bright, inevitable future for plentiful, affordable natural gas. But it’s actually only one possible future. In places as diverse as France, Bulgaria and Quebec, where fracking is illegal, the future of natural gas is something else: a future of imported dependence. And that suits most of the world’s most powerful gas-producing nations just fine.
Remember that for some countries, such as Russia, gas is power. Not just electrical or transport power, but political power. These are places that had mapped out a future where natural gas was a central part of their economic sustainability and growth. Gargantuan sums of money are riding on the future of natural gas, trillions of dollars all told………………………………………..Full Article: Source

In Nigeria, Agriculture Is ‘The New Oil’

Posted on 15 May 2014 by VRS  |  Email |Print

When Nigeria announced recently that it had become Africa’s biggest economy, you could be forgiven for thinking that oil was the only reason. After all, Nigeria is the biggest oil producer in Africa. What many people didn’t realize was the growing role of agriculture in boosting Nigeria’s economy – and the lives of its large rural population.
I’ve seen close-up how hard it can be to succeed in agriculture – not only when I was president but also during the 35 years that I have been a farmer myself. So I’m proud that Nigeria is emerging as a leader in agricultural transformation in Africa………………………………………..Full Article: Source

8 Commodity Predictions For The Rest Of 2014

Posted on 14 May 2014 by VRS  |  Email |Print

We take a look at key areas of the commodity markets. There’s been no shortage of volatility in commodity markets this year. From coffee’s spectacular surge to copper’s brutal plunge, there’s been ample opportunity to generate hefty returns or losses.
In terms of sector performance, agriculture has been far and away the best performer so far in 2014. Led by coffee—which at one point was up a whopping 95 percent year-to-date—the sector has delivered fantastic returns for investors. At the heart of the increase in coffee prices has been the severe drought in Brazil. What has been called the worst drought in decades is expected to sharply reduce coffee supplies in the world’s largest grower and exporter………………………………………..Full Article: Source

Cool commodities? Mining stocks back in vogue

Posted on 13 May 2014 by VRS  |  Email |Print

Bashed, beaten and unloved, mining stocks have fallen out of favor with investors in the last two years as commodity prices showed signs of peaking. But just when things could have turned from bad to worse it appears that the basic resources sector is the new contrarian play for 2014.
Nothing sums up the change in opinion better than JPMorgan’s assessment of the situation in a research note on Monday. Detailing a rebound in activity, the U.S. investment bank has stated it is now “overweight” on the mining sector, after being “underweight” for the last two years………………………………………..Full Article: Source

Commodity exposure: What currently keeps us away?

Posted on 13 May 2014 by VRS  |  Email |Print

Financial, rather than industry players have become a much more important factor in the price action of almost all commodities. This in turn leads to greater price volatility, and greater correlation with other financial assets, therefore reducing the diversifying characteristics of the asset class.
That is not to say that there are no opportunities. There are. And we seek to take advantage of specific opportunities as we see them. But a blanket commodity-index exposure we believe has less value for these reasons, as well as for the simple fact that the broad commodity indices are overwhelmingly dominated by energy components………………………………………..Full Article: Source

Commodities perk up as prospects brighten

Posted on 12 May 2014 by VRS  |  Email |Print

Commodities generally had a rotten 2013, but some experts now say prospects are more exciting, especially given that returns from developed stock and bond markets have been lacklustre so far this year.
Last year was an annus horribilis for the gold price in particular, which fell 28 per cent, its worst annual performance in more than 30 years. The Dow Jones-UBS commodities index, which tracks the prices of 20 commodities and has a bias to energy and agriculture, fell nearly 10 per cent in 2013………………………………………..Full Article: Source

What Next for Commodities?

Posted on 09 May 2014 by VRS  |  Email |Print

China’s economy consumes more steel per unit of gross domestic product than anywhere else, but the emerging market is slowing down spending. The transition of China’s economy from a largely investment driven to consumption driven is underway. Production of steel in China in 2013 grew at a heady 9.3% to virtually match output from the rest of the world combined. China consumes almost half of the world’s steel.
This is outsized relative to other commodities and additional strong growth from this high base will be challenging. Pushing the fixed-asset investment model further, risks future economic shocks. China’s economy consumes more steel per unit of gross domestic product than anywhere else………………………………………..Full Article: Source

Less bullish on bullion: Gold bar demand dives

Posted on 08 May 2014 by VRS  |  Email |Print

China’s gold consumption in the first quarter of 2014 eased significantly from last year mainly because of reduced demand for gift-related gold bars, experts said on Tuesday.
In the January-March period, gold consumption was 322.99 metric tons, rising 2.45 tons or 0.76 per cent year-on-year. Gold jewelry purchases jumped 30.2 per cent to 232.53 tons, while gold bar consumption slumped 43.56 per cent to 67.95 tons, the China Gold Association said………………………………………..Full Article: Source

Assets Pour Into a Curious and Controversial Investment

Posted on 06 May 2014 by VRS  |  Email |Print

ETNs are exchange-traded notes, cousin of the far better-known exchange-traded fund, or ETF, and they have been at the center of some drama lately. Despite a drop in new launches and critical articles in the financial news media, ETNs are growing at twice the rate of ETFs — and not many things have grown faster than ETFs, except maybe the Internet.
Total ETN assets jumped 47 percent, or $8 billion, over the past 12 months, to $25 billion, compared to about 25 percent for ETFs. What makes all this so curious is that almost everything ETNs track you can get in an ETF, with less risk. So why on earth have these things captured $25 billion in assets, much less $25?……………………………………….Full Article: Source

2014: Year of Commodities (May)

Posted on 06 May 2014 by VRS  |  Email |Print

Thus far in 2014, April ended on schedule and May arrived as expected. Well-placed sources, wishing to remain anonymous as they are not at liberty to speak on the matter, suggest that June will also arrive on time. That seems to sum up the only accurate components of the consensus forecast for 2014. As the chart below portrays, just about everything else continues to do the opposite of what was generally expected by the popular seers on the future.
n the above chart are plotted year-to-date returns for several investment measures. Bars on the left, the ones continuing to show significant positive returns, represent the three components of the commodity sector. To the right, using red bars, are what would be commonly referred to as underperforming groups………………………………………..Full Article: Source

Commodities: Fallen angel rebounds

Posted on 05 May 2014 by VRS  |  Email |Print

The recent bout of vertigo in US technology and momentum stocks has coincided with another, less-heralded, reversal. Commodities, the fallen angel of the investment world, are on pace to have their best year since 2007. The first quarter of 2014 was only the second in the past 10 in which commodity indices outperformed their equity counterparts. In the second quarter, so far, that has accelerated.
Since the discovery in 2008-09 that commodities neither go up in a straight line forever nor pay a dividend, they have suffered a period in the wilderness with respect to investor demand. But they may be starting to emerge………………………………………..Full Article: Source

Is a Global Shale Revolution in the Cards This Year?

Posted on 05 May 2014 by VRS  |  Email |Print

While most shale drilling over the past few years has been concentrated in North America, where energy companies have used a combination of hydraulic fracturing and horizontal drilling to unlock a bounty of shale oil and gas, the practice is slowly but surely spreading to other parts of the world believed to contain sizable shale resources. Will 2014 be the year that global shale drilling takes off?
According to a new report by Wood Mackenzie, a leading energy research and consulting firm, 2014 is poised to be the most active year for international shale drilling, with oil companies planning to drill some 400 shale wells outside North America this year………………………………………..Full Article: Source

A return to commodities? Don’t bank on it

Posted on 02 May 2014 by VRS  |  Email |Print

Some of the world’s largest banks are ditching their commodities business in moves that will become increasingly hard to reverse as a result of increasing regulatory pressures, says Joe Parsons. Barclays last week became the latest major bank to announce it will exit the majority of its commodities business, which includes energy and agricultural trading.
The move came after rivals JP Morgan, Deutsche and Morgan Stanley also either sold or said they will scale down a large part of their commodities business. Banks have tended to exit and re-enter markets at different times due to cyclical factors such as prices, demand for financing and levels of risk, according to Douglas Ziruys, senior vice president, Europe, of Fimetrix, a market intelligence firm for financial institutions………………………………………..Full Article: Source

Emerging economies lead to commodity markets reshuffle

Posted on 29 April 2014 by VRS  |  Email |Print

Barclays Bank, one of the world’s largest commodities trader, plans to pull out of trading in base metals, energy and agricultural products, and fold its precious-metals business into its currency-trading unit, as part of an effort to shrink its investment bank and improve returns.
Morgan Stanley, Deutsche Bank, UBS and Royal Bank of Scotland have already reduced or halted their commodities business. The above five dealers once controlled about 70 percent of global commodities trading volume………………………………………..Full Article: Source

On the intriguing drop in commodity correlation

Posted on 29 April 2014 by VRS  |  Email |Print

Banks are selling off their commodity divisions for regulatory reasons but also because commodities are turning out to be less profitable for them than they used to be.
On which note, an interesting development has emerged since banks started winding down their commodity divisions in 2013. According to David Bicchetti and Nicolas Maystre, who wrote a paper in 2012 highlighting increasing correlations between a number of major commodities and indices from 2008 onward, these correlations have now begun to dissipate………………………………………..Full Article: Source

Gold bulls return in time for rally on Ukraine tensions

Posted on 28 April 2014 by VRS  |  Email |Print

Investors returned to gold just in time for the longest price rally in a month amid mounting tension over Ukraine.
Money managers increased their net-long position in gold in the week ended April 22, snapping a four-week retreat that was the longest this year. The metal climbed in the next three days, sending futures to the best start to a year since 2006………………………………………..Full Article: Source

Misery continues for trend-following hedge funds

Posted on 28 April 2014 by VRS  |  Email |Print

Trend-following hedge funds have suffered further outflows amid weak investment performance, raising questions about their survival.
Commodity trading advisers, hedge funds that tend to follow trends in markets using computers to place bets, suffered their 10th consecutive month of net outflows in March, according to Eurekahedge, the data provider………………………………………..Full Article: Source

Investors starting to look at commodities again

Posted on 25 April 2014 by VRS  |  Email |Print

After several tough years, investors are once again starting to warm to commodities. That is the view of one of the sector’s most successful hedge fund managers. According to Pierre Andurand, “smart investors” are growing concerned about their exposure to equities and are looking to place contrarian bets in other asset classes such as commodities.
“We feel sentiment is turning. Pension funds are coming to us and saying they want to invest in commodities while others aren’t looking,” says Mr Andurand, whose eponymous hedge fund returned almost 25 per cent last year………………………………………..Full Article: Source

Indecent exposure [to commodities]

Posted on 25 April 2014 by VRS  |  Email |Print

Before there were alternative investments (”alts”) or hedge funds, having some exposure to commodities, served as a good way to diversify a portfolio against stock market volatility. Historical correlations to the stock market are rather low, or at least sporadic, and owning commodities can also be seen as a hedge against inflation (higher costs of raw goods).
However, since the price of crude oil cratered from $150 per barrel all the way down to $40 back in 2008, the commodities asset class as a whole has been more or less shunned. Despite the price of oil having somewhat recovered — it currently trades around $100 — now might be a good time to un-shun………………………………………..Full Article: Source

Gold, silver prices weak when there is every reason for it to go up

Posted on 24 April 2014 by VRS  |  Email |Print

The mainstream is on an academically-driven mission to politicize conspiracy theories and lump them all into the same category. While gold and silver manipulation is an ancient conspiracy fact, eyes are wide shut to the general awareness in the face of one revelation after another.
The news cycle is filled with a carefully crafted digestion of tightly controlled sound bites that are presented with no lack of drama, glitter, and spotlights. The mainstream media is perfectly positioned to make theater of the issues that remain esoteric and out of reach. The further the issue is from the majority’s perception, the more black and white will be the acceptance. Belief is emotional, politically framed………………………………………..Full Article: Source

Impact of dramatic increase in US Shale Oil production

Posted on 23 April 2014 by VRS  |  Email |Print

The US energy industry is witnessing a transformation with advances in hydraulic fracturing technology causing huge production growth in natural gas by 35% or 17 bcf/d.
Bank of America-Merrill Lynch (BofAML)in a report said that since 2010 onwards, US domestic crude and liquids production has expanded by 2.5 mn barrels per day or 33%. As a result, America became the largest contributor to increase in oil and natural gas supplies in the world in 2010-13 period………………………………………..Full Article: Source

Zinc-output deficit widens as China buys more stuff: Commodities

Posted on 23 April 2014 by VRS  |  Email |Print

Record spending by Chinese consumers on new refrigerators, cars and laptops is boosting zinc demand, creating the biggest production shortfall for the metal in eight years.
Demand for zinc used in everything from steel auto parts and brass plumbing fixtures to rubber and sunscreen will exceed output by 117,000 metric tons this year, almost double the 2013 deficit, the International Lead and Zinc Study Group estimates. Morgan Stanley predicts prices in London will rise more than any other industrial metal in 2015………………………………………..Full Article: Source

‘Saudi America’: Mirage?

Posted on 22 April 2014 by VRS  |  Email |Print

At a time when Russia is saber-rattling and the Middle East is in turmoil, a welcome geopolitical trifecta could be in the making. The United States is poised to surpass Saudi Arabia and Russia as the world’s top oil producer. Canada’s oil sands have vaulted the country to energy superpower status.
Mexico is embarking on a historic constitutional energy overhaul that its president promises will propel the country’s economy. And there is no shortage of cheerleaders. “The North American production outlook is incredibly bright,” said Jason Bordoff, a former senior energy adviser in President Obama’s White House. “Everything we see on the ground suggests reasons to be optimistic.”……………………………………….Full Article: Source

Influence of banks, hedge funds on commodities lowest since 2008

Posted on 17 April 2014 by VRS  |  Email |Print

United Nations economists who previously called for government intervention to tame volatile swings in commodity prices say banks and hedge funds have since reduced their influence to the lowest level since 2008.
In a 2012 report for the UN Conference on Trade and Development (UNCTAD), David Bicchetti and Nicolas Maystre said the rise of financial players in commodities markets over the previous decade had moved prices of oil and grains away from the fundamentals of supply and demand………………………………………..Full Article: Source

Material gains

Posted on 17 April 2014 by VRS  |  Email |Print

Commodities: As commodity prices become decoupled from equities, certain resources should again prove their worth as part of a diversified portfolio this year. After a lacklustre few years, commodities have had a short but strong run over the first few months of 2014.
Unfortunately, the recent bounce in the prices of selected resources probably does not represent the start of another bull market for commodities, but rather reflects more idiosyncratic influences on the supply-and-demand outlook for individual commodity groups. Broadly, commodities are unlikely to make up for past losses in 2014, although they should have a better year as the global economic outlook strengthens………………………………………..Full Article: Source

China’s gold demand stagnates in 2014, a year after gold rush fueled by ‘grannies’

Posted on 17 April 2014 by VRS  |  Email |Print

China’s gold-loving grannies bought enough gold last year to see them through this year, and perhaps longer. Despite prices lower than this time a year ago, when the gold rush in the world’s second-largest economy began, demand is likely to remain level this year, the first time it has not increased since 2002.
“We expect 2014 to be a year of consolidation,” a report from the World Gold Council, the trade group, said Tuesday. “The sudden price drop in 2013 meant some Chinese consumers brought forward jewelry and bar purchases, which may limit growth in demand in 2014.”……………………………………….Full Article: Source

China underinvestment affects commodities in South Africa

Posted on 16 April 2014 by VRS  |  Email |Print

A long-term investment in South African commodities — especially gold — is expected to produce a sizable payoff, according to a CCTV Africa report. Standard Bank Commodities Analyst, Walter De Wet, expects that prices will continue to rise as stocks mature and production heightens. More importantly, with the increased investment of China, commodities in Africa — and on a global scale — will edge toward stability.
“We think that China is underinvested in this metal. We do think the physical demand from west to eats will continue. Once the U.S. market is normalized and stabilized, we do think that gold will continue to grind higher,” De Wet said. ”We think long-term price for gold is closer to $1,500 than $1,100.” ……………………………………….Full Article: Source

China to witness sustained growth in gold demand: WGC

Posted on 16 April 2014 by VRS  |  Email |Print

In a major report published on Monday by the World Gold Council “China’s gold market: progress and prospects” suggests that private sector demand for gold in China is set to increase from the current level of 1,132 tonnes(t)1 per year to at least 1,350t by 20172.
Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth. The report examines the factors that have driven China’s rise to become the number one producer and consumer of gold since the market began liberalising in the late 1990s………………………………………..Full Article: Source

With commodities surging take a look at industrial metals

Posted on 16 April 2014 by VRS  |  Email |Print

Stocks have been taking a beating and the dreaded “correction” has been tossed around a lot. There is one group of assets however that are squarely in the middle of their own bull market – metals. Sure, gold and silver grab all the headlines, but industrial metals can make for some great investment plays too.
Jonathan Hoenig of CapitalistPig.com weighed in on Breakout. “Even in the first quarter of 2014 a lot of the commodities in general have been in legitimate bull markets,” he says before listing the likes of tin, nickel, zinc, copper, and lead as potential boons………………………………………..Full Article: Source

Commodities: A lacklustre outlook?

Posted on 14 April 2014 by VRS  |  Email |Print

Even though the main commodity index, the UBS Bloomberg CMCI Composite, has risen modestly recently there have been relatively few gains outside of agriculture. Indeed, it was the only main sector to show positive returns as continuing poor weather conditions led to further rises in many grain prices. Elsewhere, the only moves of note were a sizeable fall in copper and renewed weakness in the gold price.
A global economic background of slower emerging market growth, combined with the reform and rebalancing of a Chinese economy generating a significantly lower trend growth rate, presents a more difficult medium term backdrop for many commodity producers. This represents a departure from the structural bull market witnessed during the last decade and will lower potential returns until capacity tightens again………………………………………..Full Article: Source

OPEC cautious on economy, sees lower demand for its oil

Posted on 11 April 2014 by VRS  |  Email |Print

OPEC lowered the expected demand for its crude oil in 2014 and ended a run of upward revisions to global consumption growth, highlighting concerns over the economy and pressure on its market share from rival producers.
In a monthly report on Thursday, the Organization of the Petroleum Exporting Countries forecast demand for its crude oil in 2014 would average 29.65 million barrels per day (bpd), down 50,000 bpd from the previous estimate………………………………………..Full Article: Source

Why Asian shoppers should blast gold prices sky high

Posted on 11 April 2014 by VRS  |  Email |Print

A backcloth of rampant investor confidence in the global economic recovery, combined with expectations of Federal Reserve monetary tapering, prompted a monumental shift in global gold demand last year.
The safe-haven metal shed more than 27% in 2013 — the first annual drop for 12 years — as investors flocked to riskier assets such as stocks and out of gold exchange traded funds (ETFs)………………………………………..Full Article: Source

China commodity demand not peaking, says IMF

Posted on 10 April 2014 by VRS  |  Email |Print

China’s economic deceleration has spooked commodity markets. But the International Monetary Fund, in its latest global economic report, said China’s demand for commodities is far from peaking.
The IMF noted China’s rebalancing away from an investment-led economic model does not mean its consumption of commodities will tail off. Looking at growth trajectories in China, South Korea and Japan, the fund found that China’s per capita gross domestic product would need to double before that started to happen. (GDP per capita stood at $6,600 in 2013, the IMF estimates.)……………………………………….Full Article: Source

GCC economies immune to oil price shock

Posted on 10 April 2014 by VRS  |  Email |Print

The International Monetary Fund (IMF) has said that most GCC economies continue to have “substantial buffers” to cope with short-lived oil price shocks despite an expected drop in their current account surpluses.
In its World Economic Outlook, published ahead of its spring conference in Washington, the IMF said economic growth in most of the GCC economies is to hover near the rates registered in 2013, with Saudi Arabia, the largest Arab economy, expanding by 4.1 per cent in 2014, compared to 3.8 per cent in 2013………………………………………..Full Article: Source

Bank reform seen by Schreiber pushing commodities into opacity

Posted on 09 April 2014 by VRS  |  Email |Print

Banks pulling out of commodity trading because of rules on proprietary investing and capital requirements are pushing raw-material trade into less regulated and more opaque territory, investor Eric Schreiber said.
Regulations such as Basel III and the Dodd-Frank Act have a “significant impact” on banks, pushing commodity business to trading houses, according to Schreiber, the former head of commodities at Swiss wealth manager Union Bancaire Privee………………………………………..Full Article: Source

China’s changing commodities demand

Posted on 09 April 2014 by VRS  |  Email |Print

Following three decades of rapid growth in China of about 10 percent a year on average, the recent slowdown has raised many concerns. Among them are the implications for global commodity markets: China’s demand rebalancing may lead to lower commodity consumption and prices and thus create adverse spillovers to commodity exporters.
The analysis finds that China’s commodity consumption is unlikely to have peaked at current levels of income per capita. Moreover, the pattern of its commodity consumption closely follows the earlier paths of other rapidly growing Asian economies. However, recent shifts in the composition of China’s commodity consumption are consistent with nascent signs of demand rebalancing—private durable consumption has started to pick up, while infrastructure investment has slowed………………………………………..Full Article: Source

Coal is rallying, is now the time to buy?

Posted on 09 April 2014 by VRS  |  Email |Print

Ukraine has announced that they have taken back control of the facilities which were overrun by the pro-Russian forces recently. There are still those calling for Russia to send the troops into eastern Ukraine, but after the annexation of Crimea we have to imagine that Russia has very little political capital left to use for another deployment into Ukraine.
It made some sense to annex Crimea, however the argument to annex other areas of Ukraine is much weaker and would surely draw the ire of Europe and its allies. The tensions in Ukraine continue to buoy the gold market with the precious metal rising back above the $1,300/ounce level………………………………………..Full Article: Source

Money is leaving emerging markets for riskier bets at the investment frontier

Posted on 08 April 2014 by VRS  |  Email |Print

Many of Africa’s roads are scarred with potholes, so the fresh tarmac on the drive between Ndola and Kitwe, two cities in Zambia’s copper belt, is something of a treat. The country’s roadbuilding is financed by a $750m Eurobond (as dollar bonds issued outside America are known) issued in September 2012. The timing was perfect.
The Federal Reserve had an open-ended commitment to buy Treasuries to keep yields low. Investors in America and Europe were hungry to buy dollar-denominated debt offering juicy yields. Zambia drew $12 billion of orders for a ten-year bond paying only 5.4%. Spain could not borrow as cheaply at the time………………………………………..Full Article: Source

Happy days are here again:Commodities spring back to life

Posted on 07 April 2014 by VRS  |  Email |Print

Happy news! Investors are coming back to commodities. Barclays pointed out that there has been a huge increase in hedge funds length across commodity markets in 2014 with more investors likely to raise their commodity exposure in the next twelve months.
Volatility is back, returns are strong and declining correlations with other asset classes- the mood is improving. Barclays survey showed that financial investors are optimistic and raised their exposure to US commodities futures to a post financial crisis peak in recent weeks………………………………………..Full Article: Source

Five signs that the global economic recovery may be an illusion

Posted on 07 April 2014 by VRS  |  Email |Print

The global economy seemed to be on the mend when the International Monetary Fund met for its spring meeting in Washington 10 years ago. Alan Greenspan had cut official interest rates in the US to 1% after the collapse of the dotcom boom and the world’s biggest economy had responded to the treatment. Gordon Brown was chancellor of the exchequer and the UK was in its 12th year of uninterrupted growth.
Companies in the west were flocking to China now that it was part of the World Trade Organisation. The talk was of offshoring, just-in-time global supply chains and integrated capital markets. The expectation was that the good times would last for ever………………………………………..Full Article: Source

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