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Commodities Briefing - Archive | February, 2013

The case against commodities and emerging markets

Posted on 28 February 2013 by VRS  |  Email |Print

Commodities as a group have been underperforming equities for about six months now. The correlation between the two groups has been grinding lower. Even more important, I think the underperformance of commodities—and by extension emerging markets—will persist for some time.
Hang on. If the backdrop is improving growth expectations and continued, if not increased, global central bank base money expansion, why have they underperformed and why should it continue? Here’s my answer………………………………………..Full Article: Source

How to invest in commodities

Posted on 28 February 2013 by VRS  |  Email |Print

One of things all investors should know for 2013 is how to invest in commodities, as the prices of many of these products head for huge gains. One of the reasons they will soar is because institutional investors have quickly abandoned them in the current risk on/risk off investment climate. There is right now roughly $424 billion invested in commodities, but that is a mere fraction of 1% of all global investment assets.
When all that money comes pouring back in, those commodity-related investments will skyrocket. The few institutions that jumped into the market were disappointed because the commodities “super-cycle” did not generate spectacular gains for them in a year or two. Also, with inflation appearing to be nonexistent in the government-reported numbers, institutions are bailing on commodities………………………………………..Full Article: Source

Which commodity will outperform?

Posted on 28 February 2013 by VRS  |  Email |Print

When global mining giant BHP Billiton reported its results on Feb. 20, the company also updated the market on its view of global commodities. The company always provides great insight into what investors should watch within the commodity marketplace. Let’s take a look at the outlook that BHP sees across four of its key commodities.
Copper: According to BHP, the long-term fundamentals of copper remain compelling. While it sees robust supply growth resulting in a balanced market in the near term, the longer-term outlook is much stronger due to structural changes on the supply side of the marketplace………………………………………..Full Article: Source

Oil industry outlook bright as EIA, OPEC raise global demand

Posted on 28 February 2013 by VRS  |  Email |Print

The oil & gas industry has experienced a good start to 2013 as improvements in the global economy has seen both the US Energy Information Administration (EIA) and OPEC raise their forecasts for global oil demand in 2013. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has gained over 6 percent year-to-date.
The EIA has raised its 2013 growth forecasts by 110,000 barrels per day (bpd) to 1.05 million bpd in 2013. Global oil demand is now expected to total 90.2 million bpd this year. The increase follows a report from OPEC earlier in the week projecting oil demand to increase by 840,000 bpd, 80,000 bpd higher than its previous estimate. Prices for Brent crude have gained approximately 10 percent year-to-date hitting a 10-month high of over $118 a barrel………………………………………..Full Article: Source

IEA advocates Asian gas-trading hub

Posted on 28 February 2013 by VRS  |  Email |Print

Asia should work to develop a trading hub and facilitate the emergence of a market as well as prices that better reflect supply and demand, the chief of the International Energy Agency said.
Governments in the region need to work to allow markets to decide natural gas prices with minimal interference and through price deregulation, while also meeting institutional requirements to attract new market participants, IEA Executive Director Maria van der Hoeven said………………………………………..Full Article: Source

IEA: What would it take to develop a natural gas trading hub in Asia?

Posted on 28 February 2013 by VRS  |  Email |Print

Natural gas production and consumption are increasing globally and Asia is the fastest growing natural gas market, but the commodity’s price is still largely dictated by long-term contracts indexed to oil.
The relationship between oil and natural gas prices has disconnected and the spread has widened to historic levels, which puts Asian economic competitiveness at risk warns the IEA in a new report titled “Developing a Natural Gas Trading Hub in Asia - Obstacles and Opportunities.”……………………………………….Full Article: Source

Can gold’s fragile recovery take hold?

Posted on 28 February 2013 by VRS  |  Email |Print

Gold got hit by a double whammy last week – not only did the news come out that Funds controlled by George Soros and Louis Moore Bacon had reduced or offloaded completely some or all of their SPDR Trust and Sprott gold holdings in Q4 2012, but also some Fed governors gave the impression that perhaps the Fed’s QE programme might be nearing its end and monetary tightening – or rather less loosening – might soon be on the cards.
As we have pointed out before, some banks would undoubtedly come out with new assessments paring their gold price predictions – and sure enough Goldman Sachs analysts made what may prove to be an extremely ill-timed prediction that gold would slip further and accelerate downwards, sharply lowering their average gold price call for 2012 3-, 6- and 12-month gold price forecast by over $200 to $1,615/oz, $1,600toz and $1,550/oz from $1,825/oz, $1,805/oz and $1,800/oz………………………………………..Full Article: Source

Fundamentals “supportive for gold bullion” as quantitative easing “still has long way to go”

Posted on 28 February 2013 by VRS  |  Email |Print

Gold Bullion fell slightly in Wednesday morning’s London trading, but held above the $1600 per ounce level it rallied above yesterday after Federal Reserve chairman Ben Bernanke told Congress that that Fed’s ongoing quantitative easing policy “is providing important support to the recovery” and that the benefits “are clear”.
Stock markets also posted gains this morning, making up some ground lost, while commodities were broadly flat and longer-dated US Treasuries gained………………………………………..Full Article: Source

Gold heads for worst monthly run since 1997 as demand slumps

Posted on 28 February 2013 by VRS  |  Email |Print

Gold headed for a fifth monthly decline in the longest run of losses since 1997 as investors reduced holdings by more than 100 metric tons on concern that U.S. stimulus may be curtailed as the economy recovers.
Spot gold was little changed at $1,597.50 an ounce at 9:18 a.m. in Singapore, down 4 percent in February. The metal reached $1,555.55 on Feb. 21, the lowest price since July, as some U.S. central bankers sought more flexibility on stimulus………………………………………..Full Article: Source

How to invest in commodities with ETFs

Posted on 28 February 2013 by VRS  |  Email |Print

One of things all investors should know for 2013 is how to invest in commodities, as the prices of many of these products head for huge gains. One of the reasons they will soar is because institutional investors have quickly abandoned them in the current risk on/risk off investment climate. There is right now roughly $424 billion invested in commodities, but that is a mere fraction of 1% of all global investment assets.
When all that money comes pouring back in, those commodity-related investments will skyrocket………………………………………..Full Article: Source

Biggest gold ETP holdings tumble in longest decline on record

Posted on 28 February 2013 by VRS  |  Email |Print

Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, dropped in the longest slump on record as the U.S. economy improves.
Holdings fell 12 metric tons, or 0.9 percent, to 1,258.40 tons, the lowest since August, according to data on the fund’s website today. The assets have fallen for seven straight sessions, the longest stretch since the fund was launched in 2004………………………………………..Full Article: Source

Gold miners target investors as ETFs hit multiyear lows vs. bullion

Posted on 28 February 2013 by VRS  |  Email |Print

The largest gold miner ETF is down more than 20% the past three months to fall to its lowest level against bullion prices in at least three years. Market Vectors Gold Miners ETFhas dropped 31.6% the past year to triple the loss of SPDR Gold Shares.
“The gold-mining industry, which has underperformed the precious metal for each of the past six years, is pledging to report costs more accurately as part of its efforts to win back investor confidence,” Bloomberg News reports Wednesday………………………………………..Full Article: Source

Scotiabank commodity price index rebounds in January after year-end decline

Posted on 28 February 2013 by VRS  |  Email |Print

Commodity prices started the year on a stronger note, rising 3.8 per cent month-over-month in January after losing significant ground late in 2012, according to the Scotiabank commodity price index.
“Riskier assets such as commodities and equities were buoyed in January by the 2012 fourth-quarter improvement in China’s economy,” the bank’s commodity market specialist Patricia Mohr said in remarks accompanying the release of the index Wednesday. “However, market conditions remain skittish, with some industrial commodity prices and equity markets easing back again in late February.”……………………………………….Full Article: Source

The mighty dollar?

Posted on 28 February 2013 by VRS  |  Email |Print

One of the intriguing things about the foreign exchange markets is that it is all about relative prices. Many an American commentator, faced with trillion-dollar deficits, dysfunctional Washington and zero rates at the Federal Reserve, has predicted the collapse of the dollar.
A quick trawl on Amazon.com found books with titles such as “The Dollar Meltdown”, “The Dollar Crisis”*, “Survive and Thrive after the Collapse of the Dollar”, “The Collapse of the Dollar and How to Profit from It”, not to mention “The Trillion Dollar Conspiracy; How the New World Order, Man-Made Diseases and Zombie Banks are Destroying America”………………………………………..Full Article: Source

Euro up as Italy anxiety eases after auction

Posted on 28 February 2013 by VRS  |  Email |Print

The euro rose against the dollar Wednesday, with gains for the European shared currency coming after financially troubled Italy saw its borrowing costs rise less than had been feared.
The euro traded at $1.3136, up from $1.3065 late Tuesday. Against the Japanese currency, the euro rose to ¥121.11 compared with ¥120.05. The prospects for Italian political gridlock sent the euro skidding earlier this week after an inconclusive parliamentary election, which raised worries about demand for Italy’s debt………………………………………..Full Article: Source

UN carbon offsets for March rise 94pct as compliance buying jumps

Posted on 28 February 2013 by VRS  |  Email |Print

United Nations carbon credits for March jumped the most ever and trading rose to the highest in more than two months ahead of a deadline to surrender permits and offsets in the European Union’s carbon market.
March Certified Emission Reduction futures gained as much as 94 percent to 33 euro cents ($0.43) a metric ton on London’s ICE Futures Europe exchange. That’s the highest price since Dec. 11. ICE Futures handled 5.2 million tons of March offsets, the busiest day since Dec. 11. The contract closed 82 percent higher at 31 cents………………………………………..Full Article: Source

Why green isn’t always the new black

Posted on 28 February 2013 by VRS  |  Email |Print

In the knowledge that green is apparently the new black, it was highly appropriate that South Korea’s Kexim last week tapped hungry SRI funds with its first “green bond”. The acronym stands for Socially Responsible Investment, and Kexim will be investing the proceeds from the US$500m foray in the eco-friendly projects it sponsors around the world.
In the process the canny Korean policy bank managed to shave five basis points off its implied funding cost in conventional format at five years, which isn’t too shabby a result on a benchmark-sized trade………………………………………..Full Article: Source

Why traders are rushing into the EU carbon market

Posted on 28 February 2013 by VRS  |  Email |Print

The risk of carbon prices tumbling to zero is not scaring off investors in the European Union’s trading scheme, where fraught efforts to draw up a rescue plan have seen daily trade volumes soar.
Those rescue efforts are eclipsing energy prices, economic data and currency fluctuations as the market’s main driver in a trend likely to continue for months, even years. “The carbon market is broken in that it is driven by regulation, and not by fundamentals,” Paolo Coghe, analyst at Societe Generale, said………………………………………..Full Article: Source

Commodity prices may drop if investment cycle turns

Posted on 27 February 2013 by VRS  |  Email |Print

A downturn in China’s investment cycle could push down global prices for some commodities, such as iron ore, by up to 12 percent, according to a new study by Standard & Poor’s Ratings Services.
The study, titled The Investment Overhang: If China’s Investments Dip, Commodity Prices May Slip, found a strong correlation between movements in China’s investment-to-GDP ratio and prices for commodities such as iron ore and coal. Under our downside scenario for China, prices for a range of commodities could decline by between 5 percent and 12 percent, averaging a fall of 9 percent, S&P said………………………………………..Full Article: Source

Oil industry outlook bright as EIA, OPEC raise global demand

Posted on 27 February 2013 by VRS  |  Email |Print

The oil & gas industry has experienced a good start to 2013 as improvements in the global economy has seen both the US Energy Information Administration (EIA) and OPEC raise their forecasts for global oil demand in 2013. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has gained over 6 percent year-to-date.
The EIA has raised its 2013 growth forecasts by 110,000 barrels per day (bpd) to 1.05 million bpd in 2013. Global oil demand is now expected to total 90.2 million bpd this year. The increase follows a report from OPEC earlier in the week projecting oil demand to increase by 840,000 bpd, 80,000 bpd higher than its previous estimate. Prices for Brent crude have gained approximately 10 percent year-to-date hitting a 10-month high of over $118 a barrel………………………………………..Full Article: Source

Singapore trading hub may put cap on costliest LNG, IEA Says

Posted on 27 February 2013 by VRS  |  Email |Print

Singapore is the most likely hub for trading liquefied natural gas and reducing the government interference that keeps Asia’s prices higher than anywhere else in the world, according to the International Energy Agency.
A new LNG terminal in Singapore, set to receive its initial cargo from Qatar in the first quarter, will serve a wide array of tankers and boost import capacity “far beyond” domestic consumption, the IEA said today in a report. The city-state, Asia’s oil-trading center, is also creating an example for Asia by unbundling transmission from other gas and power infrastructure and taking a “hands off” approach, according the IEA, an energy adviser to 28 nations………………………………………..Full Article: Source

IEA: Gas trading hubs needed for Asia

Posted on 27 February 2013 by VRS  |  Email |Print

Asia is on course to become the world’s second largest gas market, after North America, by 2015, a new report from the International Energy Agency says. Yet the future role of gas in Asia “will depend considerably on how the pricing of natural gas is tied to the fundamentals of supply and demand in the region,” said IEA Executive Director Maria van der Hoeven Tuesday as she released the “Developing a Natural Gas Trading Hub in Asia” report in Tokyo.
Natural gas trading in the region predominately relies on long-term contracts in which the price of gas is linked, or indexed, to that of oil………………………………………..Full Article: Source

Barclays on gold:Q1 2013 price at $1710/oz; annual average $1778/oz

Posted on 27 February 2013 by VRS  |  Email |Print

Noting that Gold’s correlation with traditional drivers has weakened, Barclays has projected Q1 2013 gold prices at $1710/oz and annual average at $1778/oz in a report.
As alternative yield-bearing assets have outperformed, gold’s safe-haven appeal has lessened. Gold’s correlation with equity markets was stronger last year, but the negative relationship with US 10y Treasuries has strengthened, the report noted………………………………………..Full Article: Source

Platinum, silver prices big movers on weekly precious metals index

Posted on 27 February 2013 by VRS  |  Email |Print

After drifting 4.7 percent, Chinese platinum bar turned out to be the biggest mover on the weekly Global Precious Metals MMI. The price of US platinum bar decreased 4.3 percent from the previous week. Japanese platinum bar dropped 4.2 percent.
The price of Japanese palladium bar increased 2.5 percent this week, closing out the fourth consecutive week of rising prices. Following a 0.3 percent increase in the week prior, the price of US palladium bar fell 2.3 percent last week. Chinese palladium bar fell 2.2 percent over the past week………………………………………..Full Article: Source

Silver: Perception, correction and backwardation

Posted on 27 February 2013 by VRS  |  Email |Print

The price of silver futures contracts have been regularly flirting with a state of backwardation ever since the 2008 Financial Crisis, which is a sign of a growing physical silver shortage. A state of backwardation occurs when the front month silver futures contract commands a price premium to the subsequent months’ contracts.
On one hand, this situation could actually provide larger traders who own the physical silver with an opportunity to simultaneously sell it and purchase futures contracts to recover their metal holdings for a net profit………………………………………..Full Article: Source

Need for strong management in global mining

Posted on 27 February 2013 by VRS  |  Email |Print

With the volatility in commodity pricing, labour unrest, community opposition to projects, and reduced shareholder value. Few people could say that 2012 has not been a tumultuous year for mining with continued pressure on the world’s consumer markets.
The industry has had to deal with a variety of issues, including: volatile commodity pricing, depressed shareholder value, aggressive stakeholders evicting management (most conspicuously in South Africa and Canada), violent labour unrest (most conspicuously in South Africa and Australia), continuing consolidation in the sector through mergers and acquisitions and high profile community opposition to advanced projects across the globe, most recently in South Africa around ‘fracking’ and in Malaysia around supposed radiation poisoning………………………………………..Full Article: Source

World’s largest gold ETF cleared for HK pensioners

Posted on 27 February 2013 by VRS  |  Email |Print

State Street Global Advisors (SSgA) has received regulatory approval to allow Hong Kong MPF scheme providers to invest in its gold exchange-traded fund, coinciding with a tumble in bullion prices.
Workers contributing to the city’s Mandatory Provident Fund (MPF) can now gain exposure to the world’s largest gold bullion-backed ETF (and second largest ETF globally), which had $72 billion in AUM as at December………………………………………..Full Article: Source

Have we seen the bottom in gold ETFs?

Posted on 27 February 2013 by VRS  |  Email |Print

The last few months have been terrible for gold ETFs. Prices have plummeted for precious metals as investors have been much more willing to take on risk, while outflows out of these products have been enormous as well.
By some estimates, the ultra-popular GLD has seen more than $4 billion in outflows during the year-to-date period, including $2.55 billion in the past week alone. While this might not seem like a huge number, investors should note that this is nearly five times greater than the 2nd biggest outflow for the time period (FXI), and that it is in sharp contrast to broad stock ETFs in the same time frame……………………………………….Full Article: Source

Horizons ETFs launches broad commodity index ETF

Posted on 27 February 2013 by VRS  |  Email |Print

Horizons Exchange Traded Funds Inc. (Horizons ETFs) and its affiliate AlphaPro Management Inc. (AlphaPro) are pleased to announce the launch of the Horizons Auspice Broad Commodity Index ETF (HBR), an innovative alternative strategy ETF that offers investors diversified, tactical long exposure to up to 12 different commodity futures in the energy, metals and agricultural sectors.
HBR is designed to track, before fees and expenses, the Auspice Broad Commodity Excess Return Index (the Auspice Index), hedged to the Canadian dollar. The Auspice Index is a commodity futures based index developed by Calgary-based Auspice Capital Advisors Ltd. (Auspice). Auspice is a leader in the design and execution of systematic commodity trading strategies in Canada, and a seasoned manager of commodity risk.(Press Release)

Gold ETFs rebound as prices test $1,600 an ounce

Posted on 27 February 2013 by VRS  |  Email |Print

Gold ETFs have rebounded somewhat early this week with the precious metal testing $1,600 an ounce following two weeks of declines. SPDR Gold Shares (GLD) is down 9% over the last three months.
Gold futures have been under pressure recently on lower safe-haven demand as the global economy recovers, reports Debarati Roy for Bloomberg. Gold dipped below $1,600 on speculation the Federal Reserve will wind down its quantitative easing earlier than anticipated………………………………………..Full Article: Source

Gold and commodities are dead, hedge funds are liquidating: SPDR Gold Trust, iShares Silver Trust

Posted on 27 February 2013 by VRS  |  Email |Print

Bloomberg news just reported that Hedge Funds cuts their bets on Gold ($GLD) , and became the most bearish on agricultural commodities since 2007 such as sugar and coffee. Hedge Funds are spooked that the Federal Reserve will slow the U.S. stimulus programs that have artificially raised prices for raw materials.
Please don’t get caught up trying to buy a dip in Gold ($GLD) or any other commodities, countless Academic research has proven that hedge funds inflows and outflows into commodities tracked by the Commitment of Traders Report have predicted major price moves. Money flows are very important and the “smart money is all out dumping Gold ($GLD) Silver ($SLV) and agricultural commodities ($DBA)………………………………………..Full Article: Source

Bovespa-Index futures fall as commodities slide on euro concern

Posted on 27 February 2013 by VRS  |  Email |Print

Bovespa stock-index futures fell as commodities declined on concern Italy’s elections may reignite Europe’s debt crisis, curbing global growth and demand for Brazil’s exports.
State-controlled oil company Petroleo Brasileiro SA (PETR4) retreated in Frankfurt trading as oil reached a seven-week low in New York. Water utility Cia. de Saneamento de Minas Gerais may be active after reporting profit that beat estimates………………………………………..Full Article: Source

Threadneedle launches absolute return commodities fund

Posted on 27 February 2013 by VRS  |  Email |Print

Asset manager Threadneedle Investments has launched the Columbia Threadneedle SICAV-SIF Absolute Commodities Fund that aims to target a 10%-15% return on an annualized basis, net of fees, on a long term investment horizon.
Threadneedle launched its first commodities strategy in 2010 and currently manages in excess of US$1 billion.The Columbia Threadneedle SICAV-SIF Absolute Commodities Fund will be managed by Nicolas Robin, who joined Threadneedle in 2010 and has over 12 years’ experience in long/short commodities and index trading. He co-manages the US$1 billion Threadneedle (Lux) Enhanced Commodities Fund with David Donora. Since launch, the Threadneedle (Lux) Enhanced Commodities Fund returned 33.2% compared to the index return of 10.8%………………………………………..Full Article: Source

EU should end carbon trading, environmentalists say

Posted on 27 February 2013 by VRS  |  Email |Print

More than 75 environmental organizations on Monday urged the European Parliament to end the European Union’s Emissions Trading Scheme, launched seven years ago as a market-oriented way of reducing pollution and greenhouse gases.
The parliament is due to vote Tuesday on a plan by the European Commission to overhaul the ETS with the aim of reversing the trend that has seen the price of carbon permits plummet 75 percent in the last five years. Instead of reducing discharges of CO2, the ETS has “diverted attention from the need to transform the system’s dependency on fossil fuels and growing consumption, resulting in increased emissions,” according to Joanna Cabello of Carbon Trade Watch………………………………………..Full Article: Source

EU ETS faces back loading test

Posted on 27 February 2013 by VRS  |  Email |Print

Dismal prices in the European Union Emissions Trading System are causing interest in the world’s largest emissions market to wither away. While the European Commission has come up with a plan to put it on life support, analysts say there is a 50:50 chance it could be blocked – a decision that would ultimately lead to the scheme’s demise.
To many observers, the European Union Emissions Trading System (EU ETS) is a shining example of bold collective action by national governments aimed at achieving a noble common cause – the reduction of harmful greenhouse gas emissions and the slowing of climate change. To others, the EU ETS serves as a cautionary tale of the various pitfalls and banana skins that crafting a traded emissions market can bring………………………………………..Full Article: Source

Ecuador finalising OPEC oil tax plans

Posted on 27 February 2013 by VRS  |  Email |Print

Ecuador will introduce plans for a small carbon tax on oil at the May meeting of the Organisation of Petroleum Exporting Countries (OPEC). The initiative would see a 3-5% tax levied on every barrel of oil exported to rich countries. Funds would be transferred directly to the Green Climate Fund (GCF), and Ecuador believes it could raise up to US$80bn a year.
Speaking to RTCC on a visit to London, Ecuador Ministerial Advisor Daniel Ortega said hopes were high it would be accepted by the world’s larger oil producers in May………………………………………..Full Article: Source

China slows commodities grow

Posted on 26 February 2013 by VRS  |  Email |Print

A weaker than expected China growth number and finality on the Italian election is giving commodities new life. The market is rebounding on the thought that despite the efforts of Wen Jiabao to slow the housing market in China, perhaps not all economic stimuli will fall to the wayside.
Oil imports into China jumped 7.5 percent over one year ago levels. China’s manufacturing growth hit a four-month low in February, HSBC PMI hit 50.4 for the month, down from a final 52.3 in January. The figure was seasonally adjusted to take account of the Lunar New Year holiday that fell in the middle of the month………………………………………..Full Article: Source

Global oil supply and demand will drive gas prices in 2013

Posted on 26 February 2013 by VRS  |  Email |Print

As the price of oil fluctuates, the price of gasoline prices at the pump will also fluctuate. Given the numerous factors affecting global supply and demand for oil, the price of gasoline should be expected to continue the meaningful volatility observed in 2012.
The Organization of the Petroleum Exporting Countries currently consists of 12 countries. Saudi Arabia, with oil production of approximately 8.8 million barrels per day, is the leading oil-producing country in OPEC. OPEC was initially formed in September 1960 and is currently headquartered in Vienna, Austria………………………………………..Full Article: Source

BNP Paribas sees 2014 oil price swings as OPEC moves to balance US supply

Posted on 26 February 2013 by VRS  |  Email |Print

BNP Paribas expects the price of crude oil to be broadly unchanged on-year through 2014, but with wild swings likely in mid-year as the Organization of the Petroleum Exporting Countries makes moves to balance the market in the face of U.S. supply growth. In its first forecasts for 2014, published Monday, BNP Paribas said it expects supply-demand challenges to balance each other out and financial conditions to become less supportive of any material move higher in the price of crude.
But as bottlenecks ease in the U.S., and the price-supportive environment afforded by a weak dollar and loose monetary policy reverse with economic improvement, OPEC is likely to respond with supply cuts in order to defend a price floor commensurate with the financial needs of its Gulf member states………………………………………..Full Article: Source

Is the natural gas market recovering?

Posted on 26 February 2013 by VRS  |  Email |Print

The price of natural gas (short-term delivery) changed direction and rose last week. Based on the recent EIA report, the withdrawal from storage was close to the five-year average withdrawal. This news may have contributed to the rally in natural gas prices by the end of the previous week. Following the change in direction of the price of natural gas, will it continue to rally?
During the previous week, the future price of Henry Hub (short-term delivery) rallied by 4.38%. Moreover, United States Natural Gas (UNG) also increased by 3.3%………………………………………..Full Article: Source

Copper winding earth 105 times shows deficit: Commodities

Posted on 26 February 2013 by VRS  |  Email |Print

China, primed by government spending to boost growth, will need enough copper every month to circle the globe more than 100 times. The nation required 4.2 million kilometers (2.6 million miles) of copper cables in December, the most in nine months, to satisfy demand for electric grids, housing, autos and exports.
That’s enough to go around the 40,075-kilometer equator about 105 times. Manufacturing and exports are growing at the fastest pace in two years, while cars are selling like never before in China, the world’s most-populated country and responsible for about 40 percent of world copper consumption………………………………………..Full Article: Source

What’s next for gold prices?

Posted on 26 February 2013 by VRS  |  Email |Print

With gold prices falling, investors are struggling with the question of whether the decline is a temporary lapse in an ongoing bull market or a sign of more trouble to come. In 2011, gold rose above $1,900 per ounce. As of Friday afternoon, it was trading at $1,575. In the last month alone, gold prices have slipped by 6.8 percent. Even with the recent dip, however, gold is still up 67 percent over the past five years.
Gold’s recent decline has a number of root causes. For starters, investors are slowly regaining confidence in the stock market. Gold prices, by contrast, tend to rise when investors are feeling bearish about stocks………………………………………..Full Article: Source

Russia, Kazakhstan increase bullion reserves for fourth month

Posted on 26 February 2013 by VRS  |  Email |Print

Russia and Kazakhstan expanded gold reserves for a fourth straight month in January, while Azerbaijan acquired bullion for the first time in more than three years, as central banks sought to diversify their assets.
Russian holdings climbed 12.2 metric tons to 970 tons last month after gaining 8.5 percent over 2012, according to International Monetary Fund data. Kazakhstan’s hoard grew 1.5 tons to 116.8 tons, following last year’s 41 percent expansion, data on the IMF website showed. Azerbaijan’s holdings rose 1 ton, the first gain since May 2009, when it held 64 ounces………………………………………..Full Article: Source

Gold should be completing a cyclical low in February

Posted on 26 February 2013 by VRS  |  Email |Print

Over the past five calendar years we have seen gold either complete an intermediate cyclical top or bottom in each February. My forecast was for February 2013 to be no different and for gold and silver to make trough lows this month.
With that said, I did not expect the drop in gold to go much below $1,620 per ounce at worst, but in fact it has. Where does that leave us now on the technical patterns and crowd behavioral views?……………………………………….Full Article: Source

Gold changing role as wealth moves East

Posted on 26 February 2013 by VRS  |  Email |Print

In the last five years, we have seen the start of the decline of the developed world and the real impact of the economic rise of China on that world. What lies ahead? James Wolfensohn, the ex-president of the World Bank gave a short lecture recently in which he forecasts what the world’s cash flows would be like in 2030:
For the last century and far more, 80% of the world’s cash flowed to what we know as the developed world where 20% of the people lived. Twenty percent of the cash flow went to the underdeveloped world where 80% of the world’s population lived………………………………………..Full Article: Source

Gold’s cycle seen as turned by Goldman as ETP holdings slump

Posted on 26 February 2013 by VRS  |  Email |Print

Gold’s price cycle has probably turned as the recovery in the U.S. economy gathers momentum and investment holdings collapse, according to Goldman Sachs Group Inc., which reduced forecasts for the metal.
The bank cut its three-month target to $1,615 an ounce from $1,825 and lowered the six- and 12-month forecasts to $1,600 and $1,550 from $1,805 and $1,800. Goldman reversed an assumption exchange-traded products holdings will expand in 2013, analysts Damien Courvalin and Jeffrey Currie wrote in a Feb. 25 report………………………………………..Full Article: Source

US platinum bar price drops 2pct

Posted on 26 February 2013 by VRS  |  Email |Print

The day’s biggest mover was US platinum bar, dropping 2 percent to settle at $1,614 per ounce on Feb. 22, 2013. Japanese platinum bar fell 0.5 percent last Friday. Chinese platinum bar gained 0.3 percent. US palladium bar prices saw a 0.9 percent decline.
The price of Chinese palladium bar finished the market day up 0.6 percent per gram. The price of Japanese palladium bar remained essentially flat………………………………………..Full Article: Source

Hedge funds’ ag shorting rush may be past its peak

Posted on 26 February 2013 by VRS  |  Email |Print

The worst of a turn bearish by hedge funds on agricultural commodities may be over after spreading into all major contracts – although, for a second week, being focused on corn and sugar derivatives. Managed money, a proxy for speculators, in the week to last Tuesday – unusually - cut its net long exposure to futures and options all 13 major grain, livestock, oilseed and soft commodity contracts monitored by Agrimoney.com.
The extent of the turn bearish was, in its extent, even worse than in the previous week, when cotton and soymeal saw improved net long positions – meaning long holdings, which benefit when prices rise, outnumber short bets, which profit when values fall………………………………………..Full Article: Source

Morgan Stanley to launch a new UCITS Fund that offers exposure to Mesirow Financial’s Absolute Return Plus Strategy

Posted on 26 February 2013 by VRS  |  Email |Print

Morgan Stanley today announced the launch of a new fund, the MS Discretionary Plus UCITS Fund, under its FundLogic Alternatives plc umbrella. The fund, which provides exposure to the Mesirow Absolute Return Plus Strategy, is the last in a series of four CTA strategies to be made available in a UCITS format through Morgan Stanley’s partnership with Equinox Fund Management LLC, a U.S.-based multi-manager, specializing in constructing portfolios of multiple Commodity Trading Advisor programs.
This latest addition diversifies Morgan Stanley’s offering of CTA strategies, which currently comprises of a fully transparent and systematic strategy providing exposure to the broad class of managed futures, a short to medium-term pattern recognition program and a long-term trend following program………………………………………..Full Article: Source

Why the flip-flop in currencies?

Posted on 26 February 2013 by VRS  |  Email |Print

If you were expecting calm in the currency markets this week after a rush of news over the past several days, you’re likely to be disappointed.
For starters, the usual month-end round of economic reports is coming. “Friday is the big day with PMIs, flash euro area February inflation, U.S .auto sales and January personal consumption and income figures,” says Marc Chandler, chief currency strategist at Brown Brothers Harriman………………………………………..Full Article: Source

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