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Commodities Briefing - Archive | March, 2014

Latin America’s economies: Life after the commodity boom

Posted on 28 March 2014 by VRS  |  Email |Print

One morning last month Louis Dreyfus, a big commodity-trading house, formally opened a new $10m storage depot in the Peruvian port of Callao. Two of its six bunkers were piled high with 55,000 tonnes of fine brown dust covered by white tarpaulins—copper and zinc concentrate, awaiting blending and shipment.
The warehouse is “a bet that Peruvian mining will continue to be competitive,” says Gonzalo Ramírez, a Dreyfus manager. That looks like a sound wager. Blessed with high-grade ores and cheap energy, Peru’s output of copper—already the world’s third-largest—will more than double in the next three years, thanks to the opening of several low-cost mines……………………………..Full Article: Source

Is structured commodity finance a hidden bubble?

Posted on 28 March 2014 by VRS  |  Email |Print

Commodity markets focus on bringing commodities from their place of origin to the centres of demand in the most efficient manner. Banks, trade houses, consumers and producers all aim to bring efficiency to this flow, but there is always room for improvement.
Structured finance, the activity of lending against inventory held as collateral, focuses on ameliorating and streamlining two aspects of the commodity business – cash flow and flow of goods. Structured finance has usually been the forte of large financial institutions, but recently commodities trading firms have entered this business. This has resulted in excess lending capacity, which has led to lower costs of capital for borrowers………………………………Full Article: Source

Commodity traders: Is there still value?

Posted on 28 March 2014 by VRS  |  Email |Print

During boom times when commodity prices were high compared to mining costs, producers had no qualms about giving up some margin for the use of third party traders to act as middle men in brokering the deals between producer and end-user.
Since the 2008 global financial crisis, companies having become more discerning over their cost base, questioned the necessity of the trader. This question has become more imperative as falling grades, increased labour, transport and utility costs and deeper mines threaten producers’ margins. The trend among producers is to go direct………………………………Full Article: Source

Why commodities are sending the stock market mixed signals

Posted on 28 March 2014 by VRS  |  Email |Print

Early Thursday, the Dow Jones Industrials managed to claw back some of the ground it lost yesterday, with the average rising 17 points as of 10:45 a.m. EDT. Mixed economic data set the stage for a choppy morning for the market, with new claims for unemployment benefits falling to their lowest levels of the year, but a 0.8% drop in pending home sales contracts in February offseting some of the enthusiasm.
From a longer-term perspective, though, the Dow Jones Industrials haven’t yet demonstrated their ability to break out to new highs, and investors are looking to other markets for clues on where the Dow and the broader stock market could go next………………………………Full Article: Source

OPEC to cut exports on lower Asian demand, Oil Movements says

Posted on 28 March 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries will curtail exports through mid-April in response to lower seasonal demand from refiners in Asia, according to tanker-tracker Oil Movements.
OPEC, responsible for 40 percent of global oil supplies, will reduce shipments by 620,000 barrels a day, or 2.5 percent, to 23.78 million a day in the four weeks to April 12, the researcher said in an e-mailed note. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………Full Article: Source

A U.S.-Saudi move to lower oil prices?

Posted on 28 March 2014 by VRS  |  Email |Print

Could the U.S. unleash a flood of oil from the strategic petroleum reserve that would drive down prices in order to punish Russia? While the idea has been kicked around over the last few weeks – most recently by George Soros – it has also been dismissed as not a serious option.
Some say the impact of an oil sale, if it actually succeeded in lower prices, would be temporary. Saudi Arabia could cut back on production to keep oil prices at their current levels. Others decried the idea as contrary to the objective of the SPR, which has been setup to be used only in cases of emergency………………………………Full Article: Source

U.S. oil now 10pct of world total

Posted on 28 March 2014 by VRS  |  Email |Print

The United States now produces 10.4% of the world’s crude oil, or 7.84 million barrels of crude oil a day. Of that total, 3.22 million barrels (43%) come from tight plays, including the shale oil fields of North Dakota and Texas. The rest comes from conventional production.
For those of you who are wondering why the U.S. Energy Information Administration (EIA) is claiming that 7.84 million is 10% of global production we’ll explain. According to the EIA and the International Energy Agency (IEA) and OPEC, total global production in 2014 will average right around 90 million barrels a day, meaning that 10% would equal 9 million barrels………………………………Full Article: Source

What does that have to do with the price of gold?

Posted on 28 March 2014 by VRS  |  Email |Print

Earlier this month the price of gold hit a six-month high of $US1370 an ounce, buoyed by investors and civil unrest in Ukraine. So what does a foreign conflict have to do with the price of gold?
To those outside the gold industry it might seem strange that geopolitical uncertainty in Crimea might mean good things for your average gold miner in Kalgoorlie-Boulder. But, for one of the world’s oldest currencies, civil unrest is just one of many seemingly random factors to affect its price………………………………Full Article: Source

Gold slips below $1,300, likely to stutter short term

Posted on 28 March 2014 by VRS  |  Email |Print

As tensions ease on Russia/Ukraine, the gold price has suffered falling briefly below $1300 an ounce overnight and then again a little more heavily in European trade this morning. Russia now appears to have managed to annex Crimea without any sanctions of serious consequence being raised against it and President Putin has played the diplomat by cutting out some of the competitive sanction rhetoric.
There seems to be little doubt that the West – and Europe in particular – has no stomach for a serious economic fight given that tit for tat sanctions might be more of a problem for those European states dependent on Russian gas for 30% of their supplies than they would be for Russia itself………………………………Full Article: Source

Gold holds steady near $1,300

Posted on 28 March 2014 by VRS  |  Email |Print

Gold held steady just above $1,300 on Thursday as the metal’s safe-haven appeal was boosted by weaker equities, but gains were limited by a second day of outflows from gold funds.
Spot gold was flat at $1,302.96 an ounce by 0721 GMT. Asian markets were in skittish mood on Thursday following a soft finish on Wall Street and amid simmering tensions over Ukraine………………………………Full Article: Source

Gold extends losses as haven demand wanes

Posted on 28 March 2014 by VRS  |  Email |Print

Gold prices sank to a six-week low on Thursday as signs of improving U.S. economic growth and easing concerns about Ukraine sapped investor interest in the haven asset. Gold for April delivery, the most active contract, fell $8.70, or 0.7%, to $1,294.70 a troy ounce on the Comex division of the New York Mercantile Exchange. This was gold’s lowest settlement price since Feb. 11, when futures closed at $1,295 an ounce.
Gold had rallied over the first two months of 2014 as investors sought to protect their wealth from risks such as a slowing U.S. economy, turbulence in emerging markets, and a political crisis in Ukraine. Gold is considered by some traders as a safer investment than currencies or Treasury bonds, because the precious metal’s value isn’t tied to a government or country………………………………Full Article: Source

Why this base metal is weathering the rout

Posted on 28 March 2014 by VRS  |  Email |Print

Amid a brutal rout in base metals this year, one commodity is standing out from the crowd and has even further to run this year, analysts told CNBC. Prices of nickel, a metal used in the production of stainless steel, have been soaring in recent months, up roughly 17 percent year to date and trading at $16,300 per metric ton on Thursday.
Its peers however, including copper, iron ore, aluminum and zinc, have been tanking alongside. Copper, for example, has lost around 12 percent year to date, as worries over the use of copper in Chinese trade financing deals panicked investors………………………………Full Article: Source

Inflation-fighting ETFs

Posted on 28 March 2014 by VRS  |  Email |Print

A startling rise in food prices this year has stoked inflation fears. While, by definition, inflation is a rise in prices, not all prices rise at the same rate. The price of physical goods such as agriculture and other commodities often rises fastest in inflationary periods.
The following ETFs may benefit from an inflation surprise, as they either hold physical commodities or invest in companies that deal in physical commodities: The PowerShares DB Agriculture ETF holds futures contracts on a range of agricultural commodities including wheat, corn, sugar, coffee, cattle, hogs and soybeans………………………………Full Article: Source

Investors pile into energy ETFs

Posted on 28 March 2014 by VRS  |  Email |Print

Investors are pouring money into energy companies, putting seven times as much into exchange-traded funds as they did last quarter.
They are betting oil and gas get more expensive and fatten profits of producers from Devon Energy Corp. in Oklahoma to Pakistan’s Oil & Gas Development Co. Those are two of the stocks held in the $39 billion U.S. market of energy-sector ETFs, which took in $2 billion in new money since Dec. 31………………………………Full Article: Source

3 commodity ETFs surging on Russia sanctions

Posted on 28 March 2014 by VRS  |  Email |Print

As Russia took full control over Crimea over the weekend, the situation turned even worse with the U.S. and European Union imposing various tough sanctions against the country. This has raised the possibility of Russia being trapped in recession this year, and likely sometime soon, compelling many rating agencies to downgrade their outlook on Russia.
This is particularly true as the two major rating agencies – Standard & Poor’s and Fitch Ratings – each reduced their credit rating outlook on Russia from stable to negative………………………………Full Article: Source

ETFs grow in popularity and complexity in EU

Posted on 28 March 2014 by VRS  |  Email |Print

EDHEC-Risk Institute has announced the results of the EDHEC European ETF Survey 2013, a comprehensive survey of 207 European ETF investors. The survey was conducted as part of the Amundi ETF & Indexing research chair at EDHEC-Risk Institute on “Core-Satellite and ETF Investment.”
Among the key findings of the 2013 survey: Satisfaction has remained at high levels across most asset classes. There have been increases in satisfaction for corporate bond, commodity, real estate and sector ETFs, but satisfaction rates for ETFs based on the most liquid ETF asset classes are far more consistent compared to those based on illiquid asset classes………………………………Full Article: Source

Commodity-based currencies strengthen on higher energy prices

Posted on 28 March 2014 by VRS  |  Email |Print

The New Zealand dollar, along with some other currencies of nations that rely heavily on the export of raw goods, strengthened Thursday, boosted by rising oil and natural-gas prices and some positive economic data.
The New Zealand dollar gained 1% against its U.S. counterpart, to $0.8674, and 1.1% against the yen, to 88.60. Intraday, the New Zealand currency reached $0.8688 against U.S. dollar, its highest level since Aug. 2, 2011. The Canadian dollar rose 0.6% against the U.S. currency and 0.8% versus the yen………………………………Full Article: Source

Emerging-market currencies are ripping

Posted on 28 March 2014 by VRS  |  Email |Print

Several high-beta emerging-market currencies are having a great day against the U.S. dollar — especially the Turkish lira, the Brazilian real, and the South African rand. It’s been about two months since the worst of the selling in an episode that sent the lira to record lows and saw the rand and the real fall to their lowest levels since 2008.
The biggest gainer of the three today is the real, up 1.1% against the dollar. The rand is up 0.9% and the lira is up 0.3%………………………………Full Article: Source

China aims to launch pollution permit market within three years

Posted on 28 March 2014 by VRS  |  Email |Print

China plans to launch a nation-wide market to trade pollution permits within three years as part of efforts to tackle its environmental crisis, the Ministry of Finance (MOF) said on Monday. The ministries of finance and environmental protection have submitted draft guidelines for a market to the State Council, China’s Cabinet, which will make the final decision, MOF said.
“We will facilitate cross-regional trading, especially among regions covered by the same air and water pollution control regimes,” the statement said. The market would cap emissions of key pollutants from major facilities and force those that exceed their caps to buy permits in the market, hence providing economic incentives for polluters to invest in cleaner technologies………………………………Full Article: Source

2014 a good year for commodity bulls, so far

Posted on 27 March 2014 by VRS  |  Email |Print

If you were betting on the price of most commodities going up this year, your bet has likely paid off. Clashes over Crimea and drought in Brazil helped send prices of commodities from wheat to zinc higher in 2014 so far.
Out of roughly 27 active contract commodity markets tracked by analysts at Citi, close to two thirds increased in value during the first quarter to date, while fewer than 10 saw (mostly) marginal declines. As an asset class, commodities have done better than most other asset classes, after two years of underperformance, according to Citi…………………………………Full Article: Source

Agricultural commodities prices rocket

Posted on 27 March 2014 by VRS  |  Email |Print

Agricultural commodities have been strong performers since the start of the year. Good for the speculators, but does it does raise wider concerns that a global economic revival might end up being squeezed.
Analysts cite demand from China as being a major driver of agricultural prices. But fears the Crimean crisis could end up restricting Ukrainian grain exports have also sent them shooting higher. If supply constrictions are the primary driver, higher prices could yet dent global economic revival as consumers forced to pay more for food have less money to pay for other goods…………………………………Full Article: Source

Will the stagnant demand in commodities encourage hedging

Posted on 27 March 2014 by VRS  |  Email |Print

The commodity market, which had defied gravity during the last few years, is showing signs of slowing down. It is not a breather but a shift to a bear cycle. No doubt the “investors” have vanished and the herd mentality has gone out.
The standard explanation during the period of price surge was that the booming demand, particularly from China, was clashing with stagnant supply of energy, metals and agricultural produce. Talks of stagnant or falling demand are now in the favour…………………………………Full Article: Source

Are we trying to fight Russia through commodity prices?

Posted on 27 March 2014 by VRS  |  Email |Print

Although Russia has shown its might through hosting the Winter Olympics, followed by its annexation of Crimea, it’s still in a precarious position because of its reliance on taxes collected from the oil and natural gas industry.
The country receives over half of its revenue from oil taxes, and the country needs Brent crude prices of over $110 to balance its budget this year. In the face of Russian aggression, is the United States subtly pressuring Russia by threatening to flood the crude oil market, leading to falling prices? Additionally, is this week’s conditionally authorized approval of Jordan Cove LNG facility to non-Free Trade Agreement countries another warning shot to Russia?………………………………..Full Article: Source

China’s ‘airpocalypse’ good news for commodities

Posted on 27 March 2014 by VRS  |  Email |Print

The mining industry may be in the doldrums but Robert Friedland, the executive chairman and founder of Ivanhoe Mines, remains undaunted and sees commodity prices bouncing back in two or three years.
We make no apologies for giving you yet more of him, as he tells the best stories in the sector. Of hard and soft rocks, mineral grades and so on, he gives you all that, but tells you why it is important, and where this stuff is being used…………………………………Full Article: Source

China’s commodity speculation: From copper to gold

Posted on 27 March 2014 by VRS  |  Email |Print

Investors should always be cautious about recommendations from Goldman Sachs. There is a saying on the Street: The firm always takes the other side of the trade it is recommending to clients, as it did with subprime mortgages.
Now, Goldman thinks it’s a good idea to sell gold. “We see potential for a meaningful decline in gold prices … and reiterate our year-end $1,050 gold price forecast,” reads a recent report. In yet another report, Goldman digs into the mystery of Chinese commodity speculation and comes to the same conclusion. However, the logic is unsound…………………………………Full Article: Source

Resource revenue growth nears end

Posted on 27 March 2014 by VRS  |  Email |Print

The Australian government’s commodities forecaster expects resources export revenue to grow more than 60 per cent to $284.42 billion in the next five years as boomtime LNG and iron ore expansions supply what is expected to be sustained global growth.
But in real terms, which strips out inflation, the Bureau of Resources and Energy Economics has declared an end to a long stretch of resources revenue growth in four years…………………………………Full Article: Source

Spain’s oil deposits and fracking sites trigger energy gold rush

Posted on 27 March 2014 by VRS  |  Email |Print

Spain is already the world’s largest olive oil producer but now it’s looking to a very different kind of oil to pull it out of economic decline: petroleum. The discovery of two significant offshore deposits, and prospects for fracking in many areas, have triggered a black-gold rush, with demand for exploration permits up 35% since 2012.
A report published this week by Deloitte says the oil industry could create 250,000 jobs and constitute 4.3% of GDP by 2065. The report is based on an estimate of 2bn barrels of oil and 2.5bn cubic metres of gas…………………………………Full Article: Source

Obama moves to wean Europe off Russian oil and gas

Posted on 27 March 2014 by VRS  |  Email |Print

Barack Obama pitches the US as a source of energy that would weaken the European Union’s dependence on Russia for oil and gas “in the light of what’s happened”. In response to the Russian annexation of Crimea, many European leaders have been torn between the desire to impose sanctions whilst also being heavily dependent on Russian energy exports.
On Wednesday, President Obama met with EU leaders to discuss exporting US natural gas to Europe, which could be an alternative to Russian exports…………………………………Full Article: Source

Are US weekly oil imports from OPEC nations finding support?

Posted on 27 March 2014 by VRS  |  Email |Print

Higher-grade crude yields larger volumes of premium products such as gasoline, but it doesn’t yield as many lower-value products due to chemical differences. In the past, refiners spent millions of dollars on equipment that would allow them to produce larger amounts of premium products from heavier and sourer crude.
As the economics maybe isn’t there to change existing capacity to accommodate lighter and sweeter crude, demand for crude from Kuwait, Colombia, Venezuela, and Saudi Arabia remains strong…………………………………Full Article: Source

Barclays raises 2014 gold price forecast, cites performance so far

Posted on 27 March 2014 by VRS  |  Email |Print

Barclays raised its 2014 gold forecast to $1,250 per ounce from $1,205 on Wednesday, saying the change comes after taking into account gold’s year-to-date performance.
The bank maintained it has not altered its overall view on the yellow metal and believed gold’s next move will be lower as the macro background that could accelerate prices sustainably has not changed though investor sentiment has stabilised. It forecast gold prices at $1,150 for 2015…………………………………Full Article: Source

Gold to stay above last December’s lows in 2014: CPM Group

Posted on 27 March 2014 by VRS  |  Email |Print

Average annual gold prices are expected to remain steady and stay above the lows seen at the end of 2013, said CPM Group Tuesday. The New York-based consultancy released its annual gold yearbook at Bloomberg’s headquarters during an event fittingly called, An Evening On Gold which featured a panel of gold experts. The yearbook is considered one of the industry’s most coveted staples for forecasting the metal.
Findings from CPM Group’s Gold Yearbook show gold prices averaged $1,409.43 an ounce in 2013, down 15.6% from the average gold price of $1,670.15 an ounce in 2012. This was the first annual average decline for the yellow metal in more than a decade…………………………………Full Article: Source

Net gold investment to fall 9.5 mln ozs in 2014 - CPM

Posted on 27 March 2014 by VRS  |  Email |Print

Commodities specialists CPM Group forecast Tuesday that the decline in investment demand for gold will continue this year as “a tug of war between short and long term investors is expected to weigh on overall net additions to gold investment holdings,” which are projected to deteriorate from 30.9 million ounces in 2013 to 21.4 million ounces in 2014.
“The price sensitivity among longer term investors, renewed strength in equity and real estate markets, and weak demand from some major gold consuming nations could deflate the price of gold and drive away shorter term investors,” CPM advised in its Gold Yearbook 2014, which was released Tuesday afternoon…………………………………Full Article: Source

Gold bullion the only global meltdown safeguard, says asset allocator

Posted on 27 March 2014 by VRS  |  Email |Print

The only way to hold gold in a portfolio is through physical gold kept close by rather than listed gold, according to Panthera Solutions’ Markus Schuller. Schuller, a recent guest speaker at Citywire’s Zurich and Geneva fund selector events, said investors should also steer clear of gold ETFs as access to the precious metal would become difficult in the event of another financial meltdown.
He told Citywire: ‘Gold is usually pitched as great inflation hedge, which is not backed by empirical evidence, at least not in the sense of seeing a rising gold price as soon as inflation starts rising.’………………………………..Full Article: Source

Should you be prepared for a bullish run in gold bullion?

Posted on 27 March 2014 by VRS  |  Email |Print

After 12 years, gold bullion’s glorious bull run ended with a thud in 2013, retracing 30% and locking in the biggest annual decline since 1981. Many speculate that gold bullion prices melted in 2013 as investors tried to figure out when the Federal Reserve was going to be cutting its generous $85.0-billion monthly bond purchases.
Investors lean toward gold bullion and other precious metals as a hedge against both a weak U.S. dollar and inflation. A tapering of the Federal Reserve’s monetary policy suggests that the U.S. economy is getting stronger. While there was no real sign of sustained economic strength in 2013, just the idea that the Federal Reserve would have to start tapering at some point was enough to send gold bullion prices lower…………………………………Full Article: Source

How to invest in gold (safely)

Posted on 27 March 2014 by VRS  |  Email |Print

The price of gold has often had a negative correlation with the stock market and often it has served as a hedge against inflation and currency volatility. But, when investing in gold, it is important to remember what the much-hyped asset class is, and what it is not.
Having gold in your portfolio is a speculative play, since it does not yield income, dividends or distributions. But it is a good diversification tool…………………………………Full Article: Source

Gold demand surge in China

Posted on 27 March 2014 by VRS  |  Email |Print

China’s Gold import from Hong Kong was reported to surge in February after more banks were permitted to import gold by the government amid the increasing demand for gold, the Chinese government gave authorized permission for more banks to carry out import of precious metals because of which Gold import in the country climbed a record high last month and is expected to continue.
According to expert analyst report, net import of China in February reached a total of 109.2 mt when compared to the 83.6 mt in January a year ago………………………………..Full Article: Source

Copper sends bad news

Posted on 27 March 2014 by VRS  |  Email |Print

Dr. Copper is signaling that more danger is ahead. Copper, which is consumed for a wide variety of uses including manufacturing and construction, is said to have a Ph.D. in economics because of its ability to forecast economic activity. Hence the Dr. Copper moniker.
When prices of the red metal drop it often presages slower economic activity and lower stock prices. Benchmark contracts for copper have tumbled from around $3.38 a pound at the beginning of the year to about $3.00 recently. But that’s only part of the story…………………………………Full Article: Source

3 commodity ETFs surging on Russia sanctions

Posted on 27 March 2014 by VRS  |  Email |Print

As Russia took full control over Crimea in the weekend, the situation turned even worse with the U.S. and European Union imposing various tough sanctions against the country. This has raised the possibility for Russia being trapped in recession soon this year, compelling many rating agencies to downgrade their outlook on Russia.
This is particularly true as the two major rating agencies – Standard & Poor’s and Fitch Ratings – reduced their credit rating outlook on Russia from stable to negative each………………………………..Full Article: Source

European ETF survey finds ETF investors are generally positive

Posted on 27 March 2014 by VRS  |  Email |Print

EDHEC-Risk Institute has announced the results of the EDHEC European ETF Survey 2013, a comprehensive survey of 207 European ETF investors. The survey was conducted as part of the Amundi ETF & Indexing research chair at EDHEC-Risk Institute on “Core-Satellite and ETF Investment.”
Among the key findings of the 2013 survey: Satisfaction has remained at high levels across most asset classes. There have been increases in satisfaction for corporate bond, commodity, real estate and sector ETFs, but satisfaction rates for ETFs based on the most liquid ETF asset classes are far more consistent compared to those based on illiquid asset classes…………………………………Full Article: Source

Canadian dollar higher as commodity currencies rally

Posted on 27 March 2014 by VRS  |  Email |Print

The Canadian dollar ended higher Wednesday, catching a wave of positive sentiment for commodity currencies and other risk-sensitive assets that also buoyed the Australian dollar. The U.S. dollar is at C$1.1098 Wednesday, from C$1.1167 late Tuesday, according to data provider CQG.
Its session low at C$1.1089 marked its lowest point since March 17. The commodity bloc in general–the Canadian, Australian and New Zealand dollars–generally did well despite discouraging economic developments in China, said Vassili Serebriakov, forex strategist at BNP Paribas in New York…………………………………Full Article: Source

The good, the indifferent, and the ugly of emerging-market currencies

Posted on 27 March 2014 by VRS  |  Email |Print

The Fed’s decision to taper its monthly asset purchase program has been seen as bullish for the dollar, and in turn it has caused emerging market currencies to fall. In a new report called “The Myth of the great EM currency slump,” Societe Generale’s Klaus Baader writes that the reaction of different currencies has actually been diverse.
“A review of 12 Asia-Pacific currencies reveals that performances over the past two years have been highly diverse and contrary to the notion of a generalized sell-off across emerging markets,” writes Baader, looking at Asian currencies…………………………………Full Article: Source

World awash with raw Sugar, El Nino threat in Brazil keeps bulls in charge

Posted on 27 March 2014 by VRS  |  Email |Print

The world is awash with sugar as Brazil sugar is being offered at deep discounts for export and new harvest a few weeks away. However, positive trends continue in ICE Raw Sugar futures for May delivery which is up 1.18% at US$ 0.171 a pound on possible El Nino impacting sugar production in Brazil later this year.But markets have calmed down after rallying to a four-month high of $0.1846 a pound.
In the short run, however, raw sugar is being offered at 10 points below ICE futures which suggests abundant stocks worldwide, a Reuters report quoting trade sources said…………………………………Full Article: Source

Commodities have outperformed this year, but oil prices may fall: Citi

Posted on 26 March 2014 by VRS  |  Email |Print

Commodities have mostly outperformed other assets by a wide margin so far this year, analysts at Citi said on Tuesday. Of the roughly 27 active contract markets that Citi regularly tracks, nearly 20 commodities show increases in value in the first quarter to date, but not all are destined to continue their rise.
A bar graph provided by Citi shows that among the commodities, coffee and lean hogs have seen the biggest price increases so far this year, while West Texas Intermediate crude has seen the least. Among the decliners, Brent crude saw the least amount of percentage losses, while iron ore saw the most……………………………….Full Article: Source

2014 year of commodities (March update)

Posted on 26 March 2014 by VRS  |  Email |Print

That 2013 was a year when equities ruled supreme is now well recorded history. Generally speaking, expectations at the end of the year were that 2014 would be more of the same. Among the popularly reported forecasts were the S&P 500 going to 2,000 while $Gold would plunge to $1,050.
While the calendar will ultimately decide the wisdom of those forecasts, reality is already casting doubt on them. Perhaps the numbers in those forecasts were inadvertently switched. Demand for Gold and Agri-Commodities seems to be the dominant factor for prices this year, even after taking into account unique supply situations in some cases. As the year continues to unfold, investor attitudes on commodities, and in particular Gold and Agri-Commodities, need to adapt to the reality of the situation. ………………………………Full Article: Source

U.S. shale oil could withstand big price correction: analyst

Posted on 26 March 2014 by VRS  |  Email |Print

U.S. oil production from shale formations such as the Bakken in North Dakota and Eagle Ford in Texas would remain economically viable even if world crude prices drop by as much as 30 per cent from today’s levels, a U.S. analyst says.
The industry that has revolutionized North American energy supply faces numerous risks, including the potential for weak markets, transport constraints and the inability of technology to keep up with demand, though none currently looks like it could force a halt in drilling for the light, tight oil, said Skip York, analyst at Wood Mackenzie, the international energy consultancy……………………………….Full Article: Source

Will gas prices keep rising?

Posted on 26 March 2014 by VRS  |  Email |Print

Recent rises in the price of crude oil have also driven gasoline prices higher, to around $3.50 per gallon currently. Despite the recent rally, gas prices might actually be in for a decline in the coming months. Don’t blame OPEC this time…
OPEC’s policy to maintain its quota at 30 million barrels per day has driven oil prices higher in the past. But in recent months OPEC’s production has increased, mainly due to the slow recovery of Libya’s oil production and the sharp rise in Iraq’s production. Moreover, OPEC’s current oil production is higher than the agreed upon quota: As of February, output reached 31.4 million barrels per day. If OPEC continues to increase its production, this trend could push oil prices lower……………………………….Full Article: Source

Is gold back?

Posted on 26 March 2014 by VRS  |  Email |Print

After slumping in 2013, gold has moved higher this year on worries over the Ukraine crisis and U.S. economic growth. While miners have welcomed the rally, the battle between the gold “bugs” and bears still appears far from decided.
“Gold excites people,” Nick Sheard, chairman of Australian minerals explorer Carpentaria Exploration, told The Diplomat. “If you’ve ever panned gold, when you see that speck of gold you get quite excited and it’s the same with investors.” He added, “Gold is still considered a reserve currency and whenever there’s a crisis you see strong buying.”………………………………Full Article: Source

Gold prices to consolidate lower in 2014: CPM Group

Posted on 26 March 2014 by VRS  |  Email |Print

Despite a strong start to 2014, gold prices are likely to consolidate lower due to longer-term investors’ price sensitivity and shorter-term investors’ concerns about US Federal Reserve monetary policy, analysts from the New York-based research firm CPM Group said Tuesday.
“CPM Group does not expect gold prices to decline significantly from current levels, but neither does it expect a sharp increase in prices over 2014 and 2015,” analysts said in the group’s Gold Yearbook 2014, which was released Tuesday. In 2014, gold prices are expected to average $1,256.77/oz, down 10.8% from the $1,409.52/oz last year, CPM analysts said in the report……………………………….Full Article: Source

Gold hitting $9,000 and $50,000 – Are these legitimate forecasts for gold prices?

Posted on 26 March 2014 by VRS  |  Email |Print

After a disappointing 2013, gold has started off the year doing quite well, despite finishing at a one-month low during the Monday trading session. Nevertheless, some Wall Street traders and contrarian investors see gold hitting new highs in the near future.
One forecast that has been making headlines was made by James Rickards, portfolio manager at West Shore Funds, in which he suggested the yellow metal could rise anywhere from $7,000 to $9,000 within the next three to five years……………………………….Full Article: Source

Why nickel may be just beginning a major breakout move

Posted on 26 March 2014 by VRS  |  Email |Print

Governments around the world especially in the emerging economies are now beginning to worry about inflation and currency devaluation. Turkey and India have taken emergency measures to increase rates and the U.S. is tapering as there are growing concerns about significant declines in their respective fiat currencies.
Even the Russians and Chinese are concerned. The ruble and yuan are hitting new lows. Paper currencies may be on the verge of failing. Eventually, a new currency backed by gold or silver could be established to restore trust……………………………….Full Article: Source

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