Negative real interest rates, coordinated money-printing by Bernanke and his international counterparts, rising emerging markets–little wonder that commodity fund assets have tripled since the commodity-price peak in mid-2008.
It helps that back tests show long-only, futures-based commodity indexes had equitylike returns and little correlation to the markets, the holy grail of portfolio diversification. The rush to carve out a static allocation to commodity indexes such as the S&P GSCI or the DJ-UBS Commodity Index is, in our view, suboptimal behavior………………………………………..Full Article: Source

Excluding Iran from the global oil market would increase the shortfall between worldwide supply and demand sixfold based on February production and consumption estimates, the U.S. Energy Department said.
Global fuel use averaged 3 million barrels a day more than output when Iran is excluded from the calculations and 500,000 more when Iran is included, the department’s Energy Information Administration said………………………………………..Full Article: Source

The world oil market is growing “increasingly tight” at a time when the U.S. is looking to impose fresh sanctions on Iran over its nuclear program, U.S. energy officials said.
The U.S. Energy Information Administration on Wednesday released a closely watched analysis of oil production in countries outside of Iran. In it, the EIA said world oil prices and consumption are climbing and economic growth will continue to fuel that trend………………………………………..Full Article: Source

Bernanke seems intent on yet another round of stimulus, long after it will do any good. That will open the door to inflation — and within a few years, $7-a-gallon gas.
Winter’s chill is giving way to the rebirth of spring. But it’s not just the warmer weather that has investors in a celebratory mood. Stock prices have been blooming in a low-volatility rise that seems perfectly, well, natural………………………………………..Full Article: Source

OPEC oil output has risen in February to the highest since October 2008 due to a further recovery in Libya’s production, higher supplies from Angola and Saudi Arabia, a Reuters survey found on Wednesday.
Supply from all 12 members of the Organization of the Petroleum Exporting Countries has averaged 31.23 million barrels per day (bpd), up from 30.95 million bpd in January, the survey of sources at oil companies, OPEC officials and analysts found………………………………………..Full Article: Source

There have been no discussions within the International Energy Agency about the release of strategic petroleum reserves, the executive director of the IEA said on Wednesday.
“No discussions,” IEA Executive Director Maria van der Hoeven told Reuters at an event in Mexico City when asked about the release of reserves………………………………………..Full Article: Source

Commodities, led by oil, beat stocks, bonds and the dollar for the first time since July as the European Union prepared to embargo Iranian crude, the U.S. economy improved and China took steps to shore up growth.
The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 6.5 percent in February, extending the previous month’s 2.2 percent gain, as Brent crude advanced 11 percent………………………………………..Full Article: Source

Gold bugs may take heart from Iran’s decision to accept the metal as payment for its oil rather than dollars, but few in the bullion market believe Tehran’s customers will leap on the opportunity to do so.
Iran’s central bank governor said on Tuesday Tehran was willing to accept gold as payment for its oil as sanctions imposed by the United States and Europe hamper the country’s financial institutions and force its trading partners to seek alternative ways to settle transactions………………………………………..Full Article: Source

Gold prices rose above $1,790 an ounce on Wednesday for the first time since mid-November after the European Central Bank issued 530 billion euros in cheap three-year funds, lifting the euro and raising hopes government borrowing costs will ease further.
Large buyers and institutional investors generally buy the metal from big banks. London is the hub of the global spot gold market, with more than $36 billion in trades passing through the city’s clearing system each day. To avoid cost and security risks, bullion is not usually physically moved and deals are cleared through paper transfers………………………………………..Full Article: Source

Since late October 2011 gold and the equity markets have become closely correlated. This raises two rather more important question than it at first appears. Firstly why – and secondly what does this mean for gold’s safe-haven status?
In a recent survey of hedge funds by Barclays Capital this week, it was stated that “Portfolio Diversification” is the number one reason for buying into commodities, supported by over half of all respondents. If, however, gold and equities are becoming increasingly correlated then this could potentially kill the most important motivation for would-be buyers………………………………………..Full Article: Source

A deep correction in the price of gold could nudge the financial stability of the Indian economy, according to a working paper on gold price by India’s apex bank, the Reserve Bank of India. The paper has noted that any sharp fall in the price of gold is unlikely to have a destabilising effect on the Indian financial markets as was earlier envisaged and that instead a correction in gold prices may mitigate financial stress, if any.
Indians may be the biggest buyers of gold in the world with the country also holding the prime position as the largest importer of the precious metal………………………………………..Full Article: Source

Silver is playing a blinder. Having gained 4.3% in Tuesday’s trade alone, the price of the gray metal in Europe’s spot market is up more than 12% since the start of last week. Since the start of the year, it’s 34% higher, and silver was recently trading at $37.07 an ounce.
The market’s remarkable rally is attracting attention across the financial markets………………………………………..Full Article: Source

In the latest edition of Scotiabank’s Commodity Price Index, economist Patricia Mohr observed, “Significant industry growth in potash, coking coal, gold and nickel - as well as the inclusion of iron ore - has boosted the weight of metals and minerals within the index.”
The trade weight of metals and mineral in the index has risen slightly from 26.8% to 30.1%, “partly due to the inclusion of the rapidly expanding iron ore trade from Labrador/northern Quebec to China as well as Europe,” Mohr said………………………………………..Full Article: Source

While China’s manufacturers, which consume about 40% of the world’s copper, cut back output and brace for an economic slowdown, copper prices are soaring, because imports of the metal into China are on the rise.
That metal is getting stuck in storage instead of being put to use, suggesting copper’s rally could run out of steam………………………………………..Full Article: Source

China is the largest copper consumer in the world demanding 40% of the world`s copper supply. The copper price rose as much as 17% this year – despite copper stocks in Shanghai warehouses increasing steadily for quite some time and last week hitting the highest level in nearly a decade.
The recent copper price increase is broadly being reasoned with “hopes“ that demand from China will pick up after the Chinese Lunar New Year in January. However, preliminary data suggests that China`s new export orders shrank in February instead of picking up as “expected“………………………………………..Full Article: Source

Iron ore, the world’s second-biggest commodity cargo after crude oil, is extending a bull market after rallying 22 percent from a 22-month low in October as the slowest expansion in exports in 11 years restricts supplies.
Seaborne supply will advance 3.8 percent to 1.09 billion metric tons this year, the smallest gain since 2001, according to Clarkson Plc, the largest shipbroker………………………………………..Full Article: Source

Geopolitical risk is rising as “shifting political goalposts” in the last few months will have an impact on base metals, said Barclays Capital in a research note.
At the extreme, Indonesia seeks to ban exports of all raw ores from 2014, impacting producers of nickel ore, copper and bauxite. Tax rises are becoming popular is several countries such as Australia, Chile, Peru, The Philippines, South Africa, Zambia and Zimbabwe………………………………………..Full Article: Source

Over the past six months, many commodity ETFs have moved sharply off of their lows thanks to renewed confidence in the economy. Broad commodity products such as the PowerShares DB Commodity Index Tracking Fund (DBC) or the GS Connect S&P GSCI Enhanced Commodity TR ETN (GSC) have rebounded nicely from their slump in the early fall of 2011 and now both are firmly in the positives when looking at the past six month period.
Unsurprisingly, both of these funds have been led higher by surging prices in oil, as well as strong performances in many precious metals as well………………………………………..Full Article: Source

Most Indians stick to traditional investment avenues like equities and bonds. At best, some of them would add some gold to their portfolios. However, an increasing number of wealth managers are now advising high net worth individuals (HNIs) to diversify their portfolios into alternative assets.
Direct real estate, gold ETFs, unlisted private equity, structured products and direct art are some of the alternative assets that are recommended to rich clients. Alternative assets account for 29,565 crore, or a mere 0.34% of individual wealth in India………………………………………..Full Article: Source

The euro is “The Artist” of currencies. It’s winning raves and is the feel-good hit of the season! Don’t laugh, but the euro has quietly (get it?) enjoyed a nice bounce in the past few weeks. It’s up about 6% versus the dollar since mid-January.
But like “The Artist,” the euro may be a bit overrated. (Sorry. I enjoyed the movie but is it something that’s really worthy of Best Picture?) Several experts think that the euro, now trading around $1.335, has a lot more downside than upside in the coming months………………………………………..Full Article: Source