Already down sharply from peaks set in the first quarter of the year, commodities such as metals and crude oil look set for further falls while global economic conditions remain weak.
Prospects of Greek default, coupled with faltering growth in top raw materials consumer China, set a negative backdrop for commodities, whose price is closely tied to global demand. Even gold, traditionally a safe haven in troubled times, has lost some of its appeal………………………………………..Full Article: Source

Chinese buyers are deferring or have defaulted on coal and iron ore deliveries following a drop in prices, traders said, providing more evidence that a slowdown in the world’s second-largest economy is hitting its appetite for commodities.
China is the world’s biggest consumer of iron ore, coal and other base metals, but recent data has shown the economy cooling more quickly than expected, with industrial output growth slowing sharply in April and fixed asset investment, a key driver of the economy, hitting its lowest in nearly a decade………………………………………..Full Article: Source

If we learnt one thing from the 2008 stock market crash it’s that all asset prices can fall, regardless of the market fundamentals. Leading up to 2008, many thought companies that dealt in hard assets (commodities such as iron ore, gold and copper) would be immune from price falls.
Why? Because they owned the rights to tangible assets. The copper would still be in the ground…it wouldn’t suddenly disappear, and therefore these stocks would be safe………………………………………..Full Article: Source

The global oil markets are well supplied, Qatar’s energy minister said Tuesday, adding that “all issues” would be discussed at the OPEC meeting in Vienna next month. “We cannot see any shortage of oil in any part of the world,” Mohammed Bin Saleh Al Sada told reporters on the sidelines of an industry event.
Oil prices have fallen in recent weeks amid ongoing global economic uncertainty. July Brent crude on London’s ICE Futures exchange was last down 42 cents at $108.39 a barrel………………………………………..Full Article: Source

Venezuela’s Congress voted on Tuesday to double the amount the government can borrow from China under a deal that lets the OPEC nation repay loans with oil, potentially adding to the debt burden taken on under President Hugo Chavez.
China has become the single biggest foreign source of financing for Venezuela’s socialist government, which is borrowing heavily to fund state spending on welfare and infrastructure projects ahead of an October 7 election………………………………………..Full Article: Source

We often write about the real price of gold (RPG) as it is a leading macro indicator and leading indicator for gold stock fundamentals. The RPG is simply a measurement of Gold in terms of various markets such as commodities, stocks or currencies.
If the RPG is broadly outperforming then it could be signaling credit stress and even an economic contraction. If equities and commodities are outperforming Gold then it signals an improving economic environment and an improving credit environment………………………………………..Full Article: Source

Some investors are fighting the tide of lower gold prices. Gold is down 17% from its record high in August. Yet a few bullish investors including hedge funds are wagering on a reversal. Some are piling into less-risky options bets that would deliver huge profits if gold spikes over the next couple of months.
Others are holding tight to exchange-traded funds that are a close substitute to holding the physical metal. These longer-term investors tend to be more willing to ride out volatility………………………………………..Full Article: Source

There has been a constant debate over the years on what drives the price of gold and silver. Obviously we have the fundamentals that have put the metals in a bull market for the last 10 years. The powers that be have total control over money, as they set the price for capital via manipulating the interest rates.
So it is not a stretch that they would be concerned with a rising gold price because gold is a threat to how the current fiat regime functions on a day-to-day basis………………………………………..Full Article: Source

One, it’s all about the fundamentals. With interest rates low and heading lower (10-year Treasury is under 2%), this is gold positive. Furthermore, with the global economy in recession, interest rates will likely continue lower as central banks come up with new ways to keep the cost of capital cheap and to keep the “balls in the air”. Until proven otherwise, central banks will respond to crisis with money printing.
Two, over the past 10 years the best time to buy gold was when there was dollar strength. But even then and over the past 40 years, the relationship between the Dollar Index and gold hasn’t always been inversely correlated………………………………………..Full Article: Source

The world’s largest mining companies led by BHP Billiton Ltd. (BHP) are struggling with higher costs to complete $200 billion in new projects, prompting them to slow work and turn instead to acquisitions and asset sales.
BHP and Rio Tinto Group (RIO), ranking first and third by sales, this month said they’ll ration capital spending because of escalating costs and a slower-than-expected global economy………………………………………..Full Article: Source

China is the behemoth for energy demand and consumption and any time there is a slowdown, the global financial markets get nervous.
To put it into perspective, the International Energy Agency (IEA) confirmed that China consolidated its position as the world’s largest energy consumer, as it will consume nearly 70 percent more energy than the US by 2035, the group said in its most recent benchmark World Energy Outlook report………………………………………..Full Article: Source

While we saw gold exchange traded funds attract robust safe-haven demand over last year, investors now favor the U.S. dollar over bullion as the go-to asset during this bout of Eurozone induced market volatility.
SPDR Gold Shares ETF has strengthened somewhat over the past week, but the fund is still down 3% over the past month as the gold spot price dropped down to $1,550 an ounce………………………………………..Full Article: Source

Last week, the risk-off trade took another step towards consolidation. The US (S&P 500) retreated by 4.3%. Outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) dropped by 5.93% and 6.45%, respectively.
Moving on to other asset classes, the 10Y Treasury yield retreated by 13bps last week and reached a new low of 1.71%, while the DB Liquid Commodity Index was down by 1.19%. The WTI Crude Oil, and the Silver prices did alike and fell by 4.84%, and 0.59%, respectively; while the Agriculture sector (DB Diversified Agriculture Index), and Gold showed some resilience recording positive moves of 3.14%, and 0.86%, respectively………………………………………..Full Article: Source

Many investors establishing positions in commodity-focused products — whether futures contracts, exchange traded funds (or ETFs), or some other type of security — do so because they believe that the spot price of that natural resource will rise.
But it’s important to understand that the majority of commodity products do not offer exposure to the spot price of the underlying resource — that’s only one of the factors that ultimately contributes to bottom line returns………………………………………..Full Article: Source

An exchange for agricultural commodities will start operating soon, a year after it was launched, Finance Minister Tendai Biti said last week. A commodity exchange is a market where buyers and sellers trade commodity-linked contracts on the basis of procedures laid down by the exchange.
Such exchanges typically act as a platform for trade in futures contracts, or for standardised contracts for future delivery. “The Ministry of Agriculture is going to restore the commodities exchange in the next few weeks,” he said without giving actual dates………………………………………..Full Article: Source

Kazakh President Nursultan Nazarbayev has proposed to establish in Almaty an international commodity exchange, which will serve the cargo passing through the territory of our country.
As Nursultan Nazarbayev pointed out, in partnership with the stock exchanges in Asia and Europe it is needed to create in Almaty an international commodity exchange, which will serve all the traffic flows through Kazakhstan………………………………………..Full Article: Source

Asian currencies dropped to a five- month low, led by South Korea’s won, as mounting concern Greece will quit the euro deterred risk-taking.
The MSCI Asia-Pacific Index (MXAP) of shares snapped a two-day advance after former Greek Prime Minister Lucas Papademos told the Wall Street Journal yesterday that leaving the single currency would be “catastrophic”, although “it cannot be excluded that preparations are being made to contain the possible consequences” of an exit………………………………………..Full Article: Source

The Reserve Bank of India (RBI) announced further measures on Monday to curb speculative trading in the foreign exchange market, but the move failed to halt the rupee’s slide to another record low.
The administrative measures, in addition to directly selling dollars by the central bank in the market, are seen as inadequate to defend the rupee that is pressured by dwindling capital inflows and widening current deficit. The rupee has slumped more than 11 per cent since the start of March, making it the worst performing currency in emerging markets………………………………………..Full Article: Source

One reserve currency to rule them all. But does it need to be this way? Or is it indeed possible to have two, or even several such currencies? Or to get straight to the heart of it: can the euro or Chinese yuan ever have the status of the US dollar?
FT Alphaville has previously traced the historical travels of the US dollar on its road to reserve currency stardom, and discussed some of the things we would expect to see before other currencies could share the podium………………………………………..Full Article: Source

Britain introduced its electricity market reform proposals to Parliament on Tuesday, a crucial legislative step to push through new rules to reduce carbon emissions, keep the lights on and shelter consumers from extortionate bills.
Secretary of State for Energy and Climate Change, Edward Davey, on Tuesday confirmed the new power market mechanisms the government had outlined late last year, such as guaranteeing a minimum electricity price to producers of low-carbon energy, including nuclear, and creating a back-up capacity system to complement intermittent renewable energy………………………………………..Full Article: Source

European Union nations will be able to compensate some big energy users, including steel and aluminium producers, for extra costs resulting from changes to the EU Emissions Trading Scheme (ETS) beginning next year, the Commission confirmed on Tuesday.
A draft last month had already shown EU member states from 2013 would be able to shield big industry, to try to prevent so-called carbon leakage, which happens when rising costs drive business out of Europe………………………………………..Full Article: Source