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Commodities Briefing - Archive | May, 2013

The geopolitics of gold

Posted on 29 May 2013 by VRS  |  Email |Print

Western central banks have got themselves horribly wrong-footed as a result of not adjusting their anti-gold policies to allow for the realities of Asian gold demand. Though their dealings are shrouded in secrecy, there is compelling evidence that much — if not most — of Western central bank gold has been quietly sold over the last three decades.
More recently all members of the Shanghai Cooperation Organization, a common security and trading bloc led by Russia and China and incorporating the bulk of Asia’s land mass, have been accumulating gold……………………………………Full Article: Source

Gold rate slips, fails to hurdle $1,400 barrier

Posted on 29 May 2013 by VRS  |  Email |Print

Gold slipped on Tuesday, having failed to hurdle $1,400 per ounce, with physical demand overshadowed by hesitancy from investors in bullion-backed funds (ETFs) who were discouraged by a rising dollar and firmer stock markets.
Dealers also noted U.S. 10-year treasury yields above 2 percent and tame inflation expectations as other negative factors for the market as bullion has no interest rate……………………………………Full Article: Source

Precious metals & miners start bottoming process

Posted on 29 May 2013 by VRS  |  Email |Print

Precious metals and their related mining stocks continue to underperform the broad market. This year’s heavy volume breakdown below key support has many investors and trader’s spooked leading to a steady stream of selling pressure for gold and silver bullion and mining stocks.
While the technical charts are telling me prices are trying to bottom, we must be willing to wait for price to provide low risk entry points before getting involved. Precious metals are like any other investment in respect to trading and investing in them……………………………………Full Article: Source

J.P. Morgan slashes 2013 metals forecasts

Posted on 29 May 2013 by VRS  |  Email |Print

Analysts at J.P. Morgan Cazenove on Tuesday lowered the price forecasts for most metals, including cutting the outlook for gold in 2013 to $1,595 an ounce from $1,745 expected previously. In the short term, the analysts slashed the gold outlook 18% to $1,450 in the second quarter, while lowering the 2015 forecast by 5% to $1,650 an ounce.
The copper outlook for 2013 was cut 4% to $3.50 a pound, or $7,707 per tonne from $8,032 per tonne expected previously. For silver, the 2013 forecast was cut to $27.89 an ounce from $30.01……………………………………Full Article: Source

Precious metals using ETPs seen by JPMorgan returning 30pct

Posted on 29 May 2013 by VRS  |  Email |Print

Trading precious metals against each other based on purchases and sales through exchange-traded products would have returned an annual profit of about 30 percent since 2007, according to JPMorgan Chase & Co.
The bank rates investment in the products on a weekly basis, buying the metal with the highest current holding relative to the past six months and selling the one with the lowest relative holding. The strategy, which was first calculated this month, would have been successful about 56 percent of the time since 2007, according to JPMorgan……………………………………Full Article: Source

Gold ETF traders more bullish after recent sell-off

Posted on 29 May 2013 by VRS  |  Email |Print

Despite growing uncertainty over Fed easing and declining gold exchange traded funds, gold traders are now the most bullish in a month, arguing that the stimulus must flow until the economy recovers.
According to a Bloomberg survey, twelve analysts predict gold prices to rise next week, with nine bearish and eight neutral, the highest proportion of bulls since the end of April, reports Nicholas Larkin for Bloomberg……………………………………Full Article: Source

Palladium ETF sees record inflows

Posted on 29 May 2013 by VRS  |  Email |Print

Investors still keen on precious metals turned their attention to platinum, palladium and silver in the past month as uncertainty around the gold price continued.
At the end of April investors withdrew $157 million (£101 million) from gold exchange traded products (ETPs), according to ETF Securities. The total outflow from the yellow metal for the month was $419 million. Figures from BlackRock tell a similar story; it says global outflows from gold ETPs now total $17.9 billion for the year to date, with $8.7 billion of that in April alone……………………………………Full Article: Source

India: MCX steps up efforts on agri commodities

Posted on 29 May 2013 by VRS  |  Email |Print

Known for being non-agri, the Multi Commodity Exchange (MCX) has gradually stepped up efforts to attract participation in agri commodities also. Though contributing insignificantly to the exchange’s overall turnover, agri commodities like mentha oil, sugar, potato and cardamom are preferred by traders on the MCX.
With around 90 per cent of the market share in overall commodity futures trade, the MCX continued its leadership in almost all non-agri commodities, including base metals, precious metals and energy……………………………………Full Article: Source

German asset managers exit agricultural investments

Posted on 29 May 2013 by VRS  |  Email |Print

Germany’s DZ Bank and its asset management subsidiary Union Investment this week confirmed they are pulling out of investments into agricultural commodities. The move follows wider criticism that the market for producers is being distorted as a result of investment into agricultural commodity markets and indices.
Whilst the decision by DZ Bank was made in January, the debate has been reignited in Germany as member of the board, Lars Hille, explained the extent to which the funds’ strategies would change……………………………………Full Article: Source

Not all emerging currencies are equal

Posted on 29 May 2013 by VRS  |  Email |Print

The received wisdom is dollar strength = weaker emerging market currencies. See here for my colleague Mike Dolan’s take on this. But as Mike’s article does point out, all emerging markets are not equal. It follows therefore that any waves of dollar strength and higher U.S. yields will hit them to varying degrees.
ING Bank says in a note sent to clients on Tuesday that emerging currency gains in recent years have been closely tied to foreign investments into domestic bond markets. Recent years have seen a torrent of inflows into local debt, driving down yields on the main GBI-EM index and significantly boosting its market value……………………………………Full Article: Source

Promise and peril of virtual currencies

Posted on 29 May 2013 by VRS  |  Email |Print

The crackdown on money-transfer service Liberty Reserve highlights the growing challenges virtual currencies face as they gain wider use among businesses and consumers.
Such alternative payment methods have the potential to drive down or eliminate the processing costs businesses pay when they accept credit and debit cards. But, recently, some virtual-money firms have been mired in controversy over their lack of compliance with U.S. financial laws and allegations some are involved in illegal activities, such as buying and selling drugs……………………………………Full Article: Source

How China can kick-start carbon capture and storage

Posted on 29 May 2013 by VRS  |  Email |Print

Scaling up CCS in China requires climate policy to climb the political agenda, so that carbon reduction is considered equal to energy conservation and security of supply.
China’s estimated total carbon dioxide emissions reached 25% of global emissions in 2011 and they continue to grow rapidly – so rapidly, in fact, that the increase in China’s emissions over an eight-month period is about the same as the UK’s total emissions in 2011……………………………………Full Article: Source

Commodities provide tailwind

Posted on 28 May 2013 by VRS  |  Email |Print

Lower prices for commodities from cotton to copper are helping U.S. businesses by reducing their raw-material costs and buoying consumers by keeping a lid on prices paid. Copper, used in many goods including electronics, is off nearly 10% this year. Silver, which has various industrial uses, has tumbled more than 25%, and wheat is down more than 10%.
While lower commodity prices are bad for producers and countries reliant on exporting raw materials, they are good for Alabama Chanin, a Florence, Ala., maker of high-end clothing. Cotton prices are up a bit this year, but they are down about 50% since a surge two years ago. The cost of organic cotton—a niche product that Alabama Chanin uses exclusively in its wares—has roughly tracked that price movement…………………………………..Full Article: Source

The commodities China’s buying less off this year

Posted on 28 May 2013 by VRS  |  Email |Print

China’s key commodity imports like oil, copper, iron ore and soybeans all dipped into negative territory year over year in April. Exporters that are China dependent, from American soy farmers to Brazilian iron ore companies, are continually seeing only patchy signs of improvement.
This sluggish picture for headline commodity imports is consistent with reports from Chinese commodity consumers that while demand has picked up in line with seasonal norms, it is not surprising to the upside…………………………………..Full Article: Source

Commodities: Miners set to feel the pinch of rising global steel supply as demand falls

Posted on 28 May 2013 by VRS  |  Email |Print

The global steel market is oversupplied and miners are going to feel the pinch. Demand is, at best, subdued and steel production has been ramping up, especially in China. Last week, the World Steel Association said that production in April was 132m tonnes, an increase of 1.2pc year on year. “This growth is almost solely attributable to China, where 6.8pc more steel was produced in April than in the same period last year,” Commerzbank noted.
Most key producing regions reduced output, so China’s market share of worldwide steel production climbed to 49.8pc. “The global steel market remains clearly oversupplied,” Commerzbank added, “which should block any marked increase in steel prices.”………………………………….Full Article: Source

U.S. oil boom divides OPEC

Posted on 28 May 2013 by VRS  |  Email |Print

The American energy boom is deepening splits within the Organization of the Petroleum Exporting Countries, threatening to drive a wedge between African and Arab members as OPEC grapples with a revolution in the global oil trade.
OPEC members gathering on Friday in Vienna will confront a disagreement over the impact of rising U.S. shale-oil production, with the most vulnerable countries arguing that the group should prepare for production cuts to prop up prices if they fall any lower…………………………………..Full Article: Source

Oil-price manipulation may affect millions, EU official says

Posted on 28 May 2013 by VRS  |  Email |Print

Millions of people may be affected by the suspected oil-price manipulation being probed by the European Union, according to EU Competition Commissioner Joaquin Almunia’s most senior aide.
Royal Dutch Shell Plc (RDSA), BP Plc (BP/), Statoil ASA (STL) and Platts, the commodities price reporting company, earlier this month said they are being investigated after the European Commission, the EU’s antitrust authority, conducted raids at the companies’ offices to collect possible evidence of collusion…………………………………..Full Article: Source

Opec faces deadlock over secretary-general

Posted on 28 May 2013 by VRS  |  Email |Print

Saudi Arabia and Iran face off at Friday’s Opec meeting – not about oil prices and supply, but over the leadership of the cartel of oil producers.
The office of the Opec secretary-general is often seen as largely ceremonial, but its importance cannot be overstated with oil prices still hovering above $100 a barrel. Abdalla El-Badri, the secretary-general, has been forced already to extend his tenure because Riyadh and Tehran have failed to agree on a successor…………………………………..Full Article: Source

Venezuela open to an OPEC output cut

Posted on 28 May 2013 by VRS  |  Email |Print

Venezuela will support holding the Organization of the Petroleum Exporting Countries’ production ceiling but is open to a reduction if members find that it would help maintain the South American country’s base price of $100 a barrel at the cartel’s meeting this week in Vienna, Oil Minister Rafael Ramirez said Monday.
“We have an agreed level of production of 30 million barrels a day which we think can be maintained to keep the price at $100 per barrel. If some view comes out of the discussions that this could affect or lower the price, we are for a cut in production,” Mr. Ramirez told reporters at the Caracas headquarters of state energy monopoly Petroleos de Venezuela SA…………………………………..Full Article: Source

UAE supports high oil prices and believes demand will remain weak in 2013

Posted on 28 May 2013 by VRS  |  Email |Print

On 31st May, OPEC (the Organisation of Petroleum Exporting Countries) will meet to review its target for oil production for the year, which will help ensure that supply from its members is sufficient to meet demand.
As OPEC prepares for this meeting, Suhail Mohammed al Mazrouei, the energy minister for the United Arab Emirates (UAE), has announced that his nation believes the current crude prices are “suitable and fair.” Of the 12 member countries that form OPEC, providing 40% of the world’s crude oil………………………………….Full Article: Source

Gas ‘golden age’ at risk due to rising costs, coal comeback: IEA

Posted on 28 May 2013 by VRS  |  Email |Print

The “golden age of gas” forecast by the International Energy Agency (IEA) in 2011 faces significant challenges from growing coal use and increasing community concerns, as well as rising costs in key markets, reports The Australian.
According to the influential chief economist of the world’s energy watchdog, Fatih Birol, cheap gas being produced with relatively new techniques such as fracking could undermine support for renewable energy if governments don’t take urgent action…………………………………..Full Article: Source

Germany must curb runaway retail prices for sake of green power -IEA

Posted on 28 May 2013 by VRS  |  Email |Print

Germany must rein in runaway retail prices for electricity or risk a consumer backlash that could undermine support for a massive shift toward green energy, the International Energy Agency (IEA) said on Friday.
The Western world’s energy watchdog pointed to weaknesses in Germany’s effort to move away from nuclear and fossil-fuel energy towards a low-carbon economy, a move that was accelerated by Chancellor Angela Merkel’s decision in 2011 to exit nuclear power altogether…………………………………..Full Article: Source

Gold bets cut to five-year low as prices whipsawed: commodities

Posted on 28 May 2013 by VRS  |  Email |Print

Hedge funds are the least bullish on gold in more than five years as speculation about the pace of money printing by central banks whipsawed prices, driving volatility to a 17-month high.
Money managers cut their net-long position by 9 percent to 35,686 futures and options as of May 21, the lowest since July 2007, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts rose 6.7 percent to a record 79,416. Net-bullish wagers across 18 U.S.-traded commodities slid 2.1 percent, as investors became more bearish on coffee and wheat…………………………………..Full Article: Source

Physical demand of gold declines by 15% in a week; no immediate recovery seen

Posted on 28 May 2013 by VRS  |  Email |Print

The great Indian gold rush witnessed during April and early May has started to taper off. Physical demand has declined by at least 15% in the last one week and bullion dealers and jewellers say that they do not see an immediate recovery in demand as the crop planting season will kick off shortly, which will keep the rural buyers away.
This year, rural India has accounted for nearly 65% of the demand. A weak rupee will make gold imports costlier, which will further affect the consumption pattern. The rupee has weakened against dollar and is now hovering around Rs 55.60. The landed price of gold depends on the exchange rate…………………………………..Full Article: Source

‘Smart money’ most bullish on gold in five years

Posted on 28 May 2013 by VRS  |  Email |Print

Commercial participants in the gold market, also known as “smart money” given that they work in the industry as opposed to being speculative trend followers, are the most bullish on gold in nearly five years.
As prices declined over the last few months, commercials - those involved in the production, processing or merchandising of a commodity - have been busy buying futures contracts and covering short positions, according to data from the Commodity Futures Trading Commission…………………………………..Full Article: Source

Gold trying to build base as retail demand counters more ETF selling

Posted on 28 May 2013 by VRS  |  Email |Print

The gold price fell $10 per ounce after reaching almost $1,400 for the fifth time this week in London trade Friday morning. Silver held tight around $22.50 per ounce, managing only one-third of gold’s 2.0% gain for the week.
After yesterday’s 7% plunge Japan’s stock market bounced, but other Asian equities fell, as did European stocks. U.S. and U.K. markets are closed Monday for national holidays…………………………………..Full Article: Source

Gold, Silver: Comparisons to real estate and fiat currency printing rates

Posted on 28 May 2013 by VRS  |  Email |Print

The natural ratio of the occurrence of silver to gold in the ground is typically estimated at roughly nine ounces of silver to one ounce of gold, and yet the recent trading price ratio of 62 to one is almost seven times higher.
After contemplating this curious anomaly, one is left wondering if comparisons between gold and silver may be as fruitful as comparing silver investment demand and silver industrial demand…………………………………..Full Article: Source

HKEX eyes China co-listings to boost commodities business

Posted on 28 May 2013 by VRS  |  Email |Print

Hong Kong Exchanges and Clearing is considering joint listings of commodities products on mainland Chinese bourses to capitalise on last year’s acquisition of the London Metal Exchange (LME),CE Charles Li said on Monday.
“This is about developing mutual product listing/licensing arrangements and forming strategic partnerships with leading exchanges,” said Li in a blog post outlining developments for the exchange’s commodities business…………………………………..Full Article: Source

Hong Kong commodities-exchange head resigns from AIA Board

Posted on 28 May 2013 by VRS  |  Email |Print

The chairman of the recently closed Hong Kong Mercantile Exchange and a close ally of Hong Kong leader Leung Chun-ying has resigned as an independent nonexecutive director of AIA Group Ltd., the insurer said Sunday.
AIA said Barry Cheung, who stepped down from all public positions Friday night, resigned “in order to attend to other commitments.” Government officials say he is under police investigation amid a probe on suspected irregularities at the commodities exchange, which was founded in 2008 but has struggled to get off the ground…………………………………..Full Article: Source

Germany’s DZ Bank to end food commodity speculation

Posted on 28 May 2013 by VRS  |  Email |Print

Germany’s DZ Bank is to end speculation in food commodities, following a move taken by several other German banks, a letter from the bank showed on Monday. The move was announced by DZ Bank director Lars Hille in a letter to German pressure group Foodwatch seen by Reuters on Monday.
Groups such as Oxfam and Foodwatch have said such trading is responsible for pushing up international food prices and exacerbating famine in poor countries. A series of other German banks, including Commerzbank , DekaBank and Landesbank Baden-Wurttemberg, have stopped trading in agricultural commodities in the past year…………………………………..Full Article: Source

Commodity currencies lose out to havens

Posted on 28 May 2013 by VRS  |  Email |Print

Commodity currencies fell and haven currencies gained ground following a volatile week in the global foreign exchange markets that saw investors take profits on bets that the US dollar would strengthen.
The Japanese yen and Swiss franc rose against the US dollar for the second day after expectations that the US Federal Reserve could slow its bond-buying programme led to caution in the markets. Sharp falls in Japanese equities had a knock-on effect on the yen, which strengthened against other major currencies…………………………………..Full Article: Source

Is it all downhill for commodity currencies?

Posted on 28 May 2013 by VRS  |  Email |Print

The recent sell-off in commodity currencies triggered by a fall in demand for resources and the rush to buy U.S. dollar, may continue, say analysts, as the need to diversify capital dwindles. Commodity prices have been hammered by worries that China’s economic recovery is slowing, along with the U.S Federal Reserve hinting at a possible cutback to its stimulus plans, which is boosting the U.S. dollar.
Richard Yetsenga, head of global markets research, ANZ said the trend of diversifying capital by buying commodity currencies is reversing and weakness in this asset class will continue…………………………………..Full Article: Source

The Dollar a ‘commodity currency’? it just might happen

Posted on 28 May 2013 by VRS  |  Email |Print

The United States is in the midst of a surge in energy production, one that could realign one of the market’s most reliable barometers: the inverse link between the U.S. dollar and oil. Gnerally speaking, what’s good for the dollar tends to be negative for oil, and vice versa—but the U.S. oil boom might be altering that rule of thumb.
With the U.S. suddenly awash in oil and gas, it has raised the question of whether the greenback can join the ranks of the dollars of Canada and Australia or the krone of Norway as a “commodity currency”—which tend to correlate directly with the price of oil…………………………………..Full Article: Source

Citigroup sees ‘death bells’ for commodities supercycle in 2013

Posted on 22 May 2013 by VRS  |  Email |Print

The commodities supercycle is probably ending this year as China’s economic growth slows and the nation focuses less on infrastructure and urbanization, Citigroup Inc. said.
This year will probably signal “death bells” for the supercycle, or a longer-than-average period of rising prices, Citigroup said in a report dated yesterday, reiterating similar calls made last month and in 2011. The Standard & Poor’s GSCI gauge of 24 raw materials is down 2.1 percent this year, after an almost fourfold advance since the end of 2001……………………………..Full Article: Source

Citi: 2013 is ‘end of the commodities supercycle’

Posted on 22 May 2013 by VRS  |  Email |Print

A slower-growing Chinese economy, lack of correlation between equities and commodities, and a stronger U.S. dollar are marking the “end of the commodities supercycle,” said Citi in a research note on Tuesday.
“Citi expects 2013 to be the year in which the death bells ring for the commodity supercycle after its duly noted sunset, ushering in a new decade of opportunities based on how individual commodities will perform against one another and against broader market indicators such as equities or currencies. It will be a period of focus on unique individual commodity cycles and new relations emerging between and among commodities and other asset classes from fixed income to foreign exchange to global equities,” they said……………………………..Full Article: Source

Stay long equities, short commodities, says Deutsche Bank

Posted on 22 May 2013 by VRS  |  Email |Print

This probably isn’t a surprise coming from one of Wall Street’s most prominent bulls, but Deutsche Bank chief strategist Binky Chadha isn’t among those fretting that the stock market’s string of record highs has left markets overextended and due for an imminent pullback.
In a note published Tuesday, strategists led by Chadha urge clients to stay long equities and short commodities. They write: We stay the course in our asset allocation which remains long equities, credit and the dollar; short duration, cash and commodities. We do not expect a sustained pullback in risk assets in the face of reasonable negative catalysts until positioning gets much more extended. Moreover, large announced buyback programs suggest that corporates are likely to step up purchases in the face of a sell down, supporting equities……………………………..Full Article: Source

Australia: Treasury ’surprised’ by commodities slump

Posted on 22 May 2013 by VRS  |  Email |Print

Treasury secretary Martin Parkinson concedes his department has struggled to keep pace with a ‘‘tumultuous’’ decade for the Australian economy. Addressing an economists’ lunch in Sydney, Dr Parkinson said the difficulty Treasury and other economic forecasters had had was predicting the path of global commodity prices, the exchange rate and capital gains.
‘‘While our forecasts for the real economy have held up reasonably well, the same can’t be said of our price forecasts,’’ he told Australian Business Economists. Dr Parkinson said Treasury’s forecasts for employment and wages had been relatively accurate, which meant that for income tax, the largest source of government revenue, they had changed little since last year’s budget……………………………..Full Article: Source

Oil-fixing probe accelerates as EU asks traders for help

Posted on 22 May 2013 by VRS  |  Email |Print

The investigation into possible oil-price fixing gathered pace as trading houses from Glencore Xstrata Plc, the $70 billion mining firm, to Gunvor Group Ltd. were asked to provide information to European regulators.
Glencore Xstrata, Gunvor and Vitol Group, which aren’t under investigation, along with other firms with offices in Switzerland, are assisting the European Commission with the inquiry, said three people familiar with the situation, who asked not to be identified because the matter is private. The commission announced last week that it’s probing whether oil companies colluded to distort prices……………………………..Full Article: Source

NESDB chief: Gold price drop temporary

Posted on 22 May 2013 by VRS  |  Email |Print

The decline in the global gold price will be only temporary and will rebound on speculation that Italy and other countries in Europe may have to sell gold reserves for debt repayment, the head of the NESDB said on Tuesday. National Economic and Social Development Board (NESDB) secretary general Arkom Tempitayapaisit said he disagrees with an analyst at a foreign bank who forecast that the gold price is now on a five-year downward trend and will fall below US$1,000 per ounce. The gold price on Tuesday evening in New York was $1,380.16 per ounce.
It would be difficult for the gold price to continue downwar for five years, he said. Gold is held both as a reserve and as a speculative commodity……………………………..Full Article: Source

What to make of falling gold prices

Posted on 22 May 2013 by VRS  |  Email |Print

Gold is continuing to lose its luster. Last fall, gold was trading at nearly $1,800 per ounce. Last week, its price dipped below $1,400 per ounce. And as prices fall, a number of high-profile investors have moved toward the exits.
Notably, in the first quarter of 2013, billionaire George Soros cut his position in the exchange-traded fund SPDR Gold Trust by 12 percent, according to government filings. Meanwhile, in a recent Credit Suisse investor survey, 60 percent of investors said gold bullion is the commodity about which they are the most pessimistic……………………………..Full Article: Source

Gold charts point to fresh trouble ahead with eyes on $1,100/oz

Posted on 22 May 2013 by VRS  |  Email |Print

Gold’s recent slump could have much further to run, with a breach of its April low at $1,322 potentially setting up bigger losses towards levels not seen since mid-2010, chart analysts say.
Since posting its biggest two-day loss in 30 years last month, bullion has struggled to recover, and last week suffered its longest string of daily losses in four years. With April’s low again looming, a breach could spark a significant move lower, according to analysts who study past price moves to determine the future direction of trade……………………………..Full Article: Source

Gold price seen as still high despite big fall

Posted on 22 May 2013 by VRS  |  Email |Print

Singapore government investment chief says it is difficult to justify the current value of the metal given its limited practical usage. While falling gold prices have sent a flood of Chinese housewives to Causeway Bay jewellery shops to hunt for bargains, Singapore’s top investment official has warned that the precious metal still looks overpriced.
Lim Chow Kiat, the chief investment officer of the Government of Singapore Investment Corp, told a forum yesterday that it was difficult to justify gold prices given its relatively limited practical use……………………………..Full Article: Source

Robin Hood in reverse – gold being taken down to make the rich richer

Posted on 22 May 2013 by VRS  |  Email |Print

The past week or three have been, to say the least, disappointing for precious metals investors. Gold and silver have continued to step downwards towards new interim lows as money continues to move from bullion (or at least from paper variations of it) to the general stock markets which have been continuing to perform well.
All this despite, so we hear, continuing high demand for physical gold and silver from Asian markets in particular. But this physical metal demand growth seems to be being more than countered by some strange precious metals sales patterns – the latest of which saw silver plunge 10% in 4 minutes on a big computer sell order – from a single client according to a major Japanese bank – at a light trading time……………………………..Full Article: Source

Short squeeze fades in precious metals, contrarians spot time to buy

Posted on 22 May 2013 by VRS  |  Email |Print

The price of both silver and gold slipped back in London on Tuesday morning, cutting into yesterday’s rapid gains from four-year and one-month lows respectively.World stock markets stalled after hitting a series of near and new all-time highs so far this month.
The British pound fell hard – supporting the gold price in Sterling above £910 per ounce – after new data showed a slowdown in consumer price inflation. “These stunning upside reversals off fresh lows [in gold and silver] were somewhat justified,” says a note from brokers INTL FC Stone, “given that both were quite oversold.”…………………………….Full Article: Source

Platinum buying quickens as gold allure diminishes: Commodities

Posted on 22 May 2013 by VRS  |  Email |Print

At a time when diminishing faith in gold is spurring investors to sell record amounts of the metal, demand for platinum and palladium is strengthening as mining companies curb supply.
Gold owned through exchange-traded products fell 17 percent this year as platinum holdings rose 31 percent and those in palladium 17 percent, data compiled by Bloomberg show. Platinum will end the year at $1,690 an ounce, or 16 percent more than now, while palladium will gain 7.5 percent to $800 an ounce, according to the medians of 15 analyst estimates compiled by Bloomberg. The majority of 38 analysts surveyed last month said gold would post an annual drop, ending a 12-year winning streak……………………………..Full Article: Source

Is the platinum sector imploding?

Posted on 22 May 2013 by VRS  |  Email |Print

Investors in platinum stocks have dumped their shares in a panic over the last six weeks, fearing that the platinum sector is in terminal decline. Since April the sector has fallen by 20%, bringing the cumulative decline for the year to 30%.
But since April contrarian asset manager RE:CM has increased its holdings in Implats and Lonmin, while retaining sizeable investment in Amplats. All four of its equity funds are exposed to the platinum sector in degrees ranging from 3% of the fund up to 15% in the case of its SA-focused Flexible Equity Fund……………………………..Full Article: Source

Metals prices to continue to drop this year - S&P

Posted on 22 May 2013 by VRS  |  Email |Print

Weak global demand will constrain Latin American metals and mining sector’s performance this year, Standard & Poor’s advised Monday. “Sluggish demand and oversupply remain key risks for most metal commodities,” said S&P Credit Analysts Rafaela Vitoria and Diego Ocampo. “We expect metal prices to continue to drop in 2013, as a result of oversupply and slowing demand, which will pressure credit metrics.”
In their analysis, S&P observed that the outlook on the Asia Pacific region is critical to the metals and mining sectors. “Our base-case outlook expects growth in the region to hold steady or pick up slightly in 2013 and 2014. China’s real GDP could expand 7.9% in 2013, and 8% in 2014,” said the analysts……………………………..Full Article: Source

World crude steel output rises by 1.2pct to 132 mln tons in April 2013 Y/Y: WorldSteel

Posted on 22 May 2013 by VRS  |  Email |Print

World crude steel production of the 63 countries reporting to the World Steel Association (worldsteel) rose to 132 mn tons in April 2013, an increase of 1.2% compared to April 2012.
China’s crude steel production for April 2013 was 65.7 mn tons, up by 6.8% compared to April 2012. Elsewhere in Asia, Japan produced 9.2 mn tons of crude steel in April 2013, up by 1.0% over April 2012. South Korea’s crude steel production was 5.5 mn tons in April 2013, down by -6.3% compared to the same month last year……………………………..Full Article: Source

How to short silver with ETFs

Posted on 22 May 2013 by VRS  |  Email |Print

Silver has been performing quite poorly over the past few weeks due to the broad commodity weakness and a shift to more risky asset class like equities. This is especially true with the backdrop of the strengthening dollar and continued bullishness in the equity space that are tempering the demand for lower risk assets across the board.
In fact, the white metal has plunged 30% in the year-to-date time frame and more than 50% since its peak at the end of April 2011, making it one of the worst performing metals this year. Currently, the metal is trading below $23 per ounce with some forecasting a bigger drop in the days ahead as well……………………………..Full Article: Source

Ghana to establish commodities exchange to connect agric sector to the capital market

Posted on 22 May 2013 by VRS  |  Email |Print

Ghana is ready to restructure its capital market to spur economic growth, Finance Minister Seth Terkper said. The restructuring is necessary for the Ghana to meet international standards in its securities market regulations, Seth Terkper told Ghana’s first-ever capital market conference.
Ghana’s Securities and Exchange Commission (SEC) will review the legislation that impedes a well-functioning securities market, Terkper said……………………………..Full Article: Source

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