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Commodities Briefing - Archive | May, 2014

The El Niño effect: What it means for commodities

Posted on 30 May 2014 by VRS  |  Email |Print

The odds of extreme weather this year have crept up to around 80 percent in favor, according to forecasters, posing a very serious risk to the price of soft commodities.
EL Niño, a climatic phenomenon caused by warm waters in the tropical Pacific Ocean can trigger downpours or droughts and affect temperatures, threatening crop yields and prices. Investors are now weighing how to be positioned ahead of a possible event………………………………………..Full Article: Source

“Africa Rising” – but can it duck the commodity curse?

Posted on 30 May 2014 by VRS  |  Email |Print

The International Monetary Fund’s “Africa Rising” conference opened in Maputo with gushing descriptions about the “potential” and “opportunity” of the fast growing continent.
IMF chief Christine Lagarde, the guest of honour, told the gathering of politicians, aid workers and business types that “we are witnessing a moment of transformation in Africa.” Former US President Bill Clinton joined in via video to talk of Africa’s “remarkable economic progress.”……………………………………….Full Article: Source

Why Investors Might Want To Exercise Caution

Posted on 30 May 2014 by VRS  |  Email |Print

The M&A frenzy in commodity related stocks is not taking place in the E&P plays like we suspected but rather a much more boring segment of the commodity space; food stocks. There is a rush to combine in the sector as companies look to build up scale in order to help in negotiating placement of their products as well as the price they receive.
This is a trend we suspect will continue and based off of all the recent action it appears that the sweet spot of the market is $4-8 billion market capitalization area. We are not speculators in the sector but if we were that is the area of the market we would focus on………………………………………..Full Article: Source

India: Banks must quickly get into the commodity market act

Posted on 30 May 2014 by VRS  |  Email |Print

Banks are not allowed to participate in the Indian commodity derivatives markets. Such non-participation of the most important financial institution of the country – banks – is an important missing link in the evolution of this market in India.
While much has been talked about in various contexts recommending banks’ participations, the latest Report of a Finance Ministry committee suggesting steps to fulfill the objectives of price discovery and risk management in the commodity derivatives market, says: “… One way to reduce the cost of capital for the commodities trader is, to make banks … an integral part of trading in commodity derivatives.”……………………………………….Full Article: Source

OPEC May Crude Output Advances From Three-Year Low in Survey

Posted on 30 May 2014 by VRS  |  Email |Print

OPEC crude production climbed in May for the first time in three months, led by gains in Angola and Saudi Arabia, a Bloomberg survey showed. Output from the 12-member Organization of Petroleum Exporting Countries rose by 75,000 barrels a day to an average 29.988 million, according to the survey of oil companies, producers and analysts.
Last month’s total was revised 50,000 barrels a day higher to 29.913 million because of changes to the Saudi Arabian and United Arab Emirates estimates………………………………………..Full Article: Source

U.S. crude rises as gasoline stocks draw supports

Posted on 30 May 2014 by VRS  |  Email |Print

U.S. crude prices rose on Thursday after government inventory data showed a sharp drawdown in gasoline that outweighed a build in overall crude stocks, while Brent edged up supported by the low Libyan output and the Ukraine crisis.
U.S. crude stockpiles rose 1.7 million barrels last week, but a strong start to the summer driving season drained gasoline inventories by 1.8 million barrels, far more than forecast, the Energy Information Administration reported………………………………………..Full Article: Source

Ukraine: The real energy crisis starts in June

Posted on 30 May 2014 by VRS  |  Email |Print

On June 3, Russia plans to reduce the gas supply to Ukraine — and hence, to Europe — if Kiev has failed to pay in advance for next month’s gas deliveries, the price for which has been doubled as a result of the political crisis.
Interim Ukrainian Prime Minister Arseniy Yatsenyuk is trying to play hardball with Moscow, suggesting gas talks cannot move forward until Russia addresses the issue of the $1 billion in gas it stole when it annexed Crimea………………………………………..Full Article: Source

Citi Research Sees Gold Averaging $1,337/Oz In Second Half

Posted on 30 May 2014 by VRS  |  Email |Print

Citi Research looks for gold prices to improve from current levels in the second half of 2014 but overall appears to be more pessimistic toward the outlook for gold-mining equities. The bank issued a pair of research reports on gold and silver Thursday.
Citi said it looks for the gold price to average $1,337 an ounce in the second half of the year, then rising to $1,365 in 2015. In particular, Russia-Ukraine tensions may help provide a lift, Citi said………………………………………..Full Article: Source

Gold Prices Drop to 16-Week Low

Posted on 30 May 2014 by VRS  |  Email |Print

Gold prices sank to their lowest level in 16 weeks as worries about political friction in Eastern Europe subsided and amid signs that the U.S. economy continues to recover from a winter slowdown.
Gold has hovered around $1,300 for much of the past month, as the simmering conflict between Russia and Ukraine stoked investor appetite for the haven asset. Some investors believe gold holds its value better than other assets during geopolitical upheaval because it doesn’t have links to governments or countries………………………………………..Full Article: Source

Citigroup Really Dislikes Gold Miners, But If You Insist On Buying Them, Buy These

Posted on 30 May 2014 by VRS  |  Email |Print

To call Citigroup bearish on gold miners like Gold Fields (GFI) and Harmony Gold (HMY) would be like saying a New York Yankees fan dislikes the Mets: It goes beyond simple dislike. But if you’re going to insist on buying gold stocks, they recommend Goldcorp (GG), Barrick Gold (ABX) and Newmont Mining (NEM).
The past year’s developments have exposed the industry’s intrinsically bad fundamentals. Companies cannot change these, but can merely attempt to position themselves better than peers. We believe a shift from “short termness” to longer term value is needed. We have yet to see this happen………………………………………..Full Article: Source

Scotiabank positive on nickel - coal and uranium at rock bottom

Posted on 30 May 2014 by VRS  |  Email |Print

“Indonesia’s ban on the export of all unprocessed nickel-containing ores will turns today’s world supply & demand balance from ‘surplus’ to ‘deficit’ by early 2015,” says Scotiabank economist Patricia Mohr.
In the latest edition of the Scotiabank Commodity Price Index published Wednesday, Mohr observed that Chinese stainless steel producers’ inventories of Indonesian ore “will largely be depleted by year-end.” As a result, Chinese mills urgently boosted imports of FeNi (nickel & iron) by 70% during the first quarter of this year………………………………………..Full Article: Source

Nickel rally may not extend comfortably over rest of Q2

Posted on 30 May 2014 by VRS  |  Email |Print

Nickel market is bulish for the medium and long term with the metal expected to be on track for its first annual gain in three years. However, investors should be wary of getting too comfortable with the rally over the rest of second quarter, according to Kedia Commodity.
Nickel was the victim of continual supply surpluses, whcih should have pushed prices down to levels that prompted output cuts. However, with Nickel Pig Iron (NPI) supply from Indonesia now cut off and with the market having to replace former supply from Indonesia with stockpiled material, the downward trend in nickel is unlikely to resume, Kedia report said………………………………………..Full Article: Source

US steel sheet market seen possibly entering new stable period

Posted on 30 May 2014 by VRS  |  Email |Print

The US sheet steel market might be in for another stretch of relative stability, as new upcoming outages balance import pressure and drab demand, market sources said Thursday. One industry consultant said manufacturing — and thus steel consumption — should perk up a bit in the second half of the year, but “lower raw material prices, higher utilization, and higher imports may cap the upside at something less than $700/st,” he said.
“Probably the best outcome would be a ’steady-as-she-goes’ scenario, thus avoiding price volatility — and that seems to be the case today whether one talks about base metals (other than nickel), ferrous scrap prices, or even equities,” the consultant said………………………………………..Full Article: Source

Silver ETFs Look to Regain Lost Luster

Posted on 30 May 2014 by VRS  |  Email |Print

The iShares Silver Trust and the ETFS Physical Silver Shares have posted double-digit losses over the past three months, but silver’s recent struggles could give way to higher prices in the months ahead.
“Often viewed by investors as a leveraged play on gold, silver is an attractive longer term portfolio diversifier in our view, with a low correlation to most other major asset classes yet offering protection from currency debasement risk and inflation,” said ETF Securities in a new research note………………………………………..Full Article: Source

3 Commodity ETFs Beating the Market in 2014

Posted on 30 May 2014 by VRS  |  Email |Print

While the Fed’s upper hand had caused the U.S. equity markets to deliver stellar returns last year, 2014 has seen lackluster returns so far. The benchmark index S&P 500 had given us a nice 14% return last year by this time, a little less than five times the return S&P 500 has delivered so far this year. This clearly signals that we might not see equities delivering even close to the solid 32% return of 2013.
While the Fed hitting the taper chord certainly played the culprit, a severe winter, geopolitical tensions in Russia, slowdown concerns in China, emerging market turmoil and valuation concerns also took part of the blame………………………………………..Full Article: Source

Fink Says Leveraged ETFs May ‘Blow Up’ Industry

Posted on 30 May 2014 by VRS  |  Email |Print

BlackRock Inc. (BLK)’s Laurence D. Fink, who oversees the world’s biggest exchange-traded fund lineup, said leveraged ETFs are a structural problem and have the potential to “blow up” the industry.
“BlackRock would never do a leveraged ETF,” Fink said in a question-and-answer session with Deutsche Bank AG co-chairman Anshu Jain today in New York. Fink said he doesn’t understand why the U.S. Securities and Exchange Commission allows them to operate………………………………………..Full Article: Source

CME Group Among Those In Talks With LBMA On Alternative To Silver Fixing

Posted on 30 May 2014 by VRS  |  Email |Print

CME Group confirmed Thursday that the U.S. exchange operator is in talks with the London Bullion Market Association on trying to help develop a possible alternative to the London silver fixing.
The London Silver Market Fixing Limited said earlier this month that it will stop administering the London silver fixing after Aug. 14. The LBMA quickly stepped up in looking for feedback for an alternative and launched an online market survey last week. Ahead of the long U.S. Memorial Day weekend, the LBMA said it had already received over 250 responses………………………………………..Full Article: Source

Is Aussie Dollar ETF in Trouble?

Posted on 30 May 2014 by VRS  |  Email |Print

The Australian economy which has enjoyed steady growth over two decades has lately been witnessing a slump. Commodity abundance was the one of major driving forces of Australia – especially the base metals and energy product – that assisted the nation to dodge recession during the global financial meltdown.
However, slowdown in China, a major importer of Australian natural resources, falling prices of iron ore – Australia’s largest export, faltering consumer confidence thanks to government spending cuts and new tax burden in a 2014/15 federal budget have lately affected the nation’s growth………………………………………..Full Article: Source

Possible currency union within Eurasian Economic Union to be considered in future

Posted on 30 May 2014 by VRS  |  Email |Print

The issue of creating a currency union on the basis of the Eurasian Economic Union may be considered in the future, Russian First Deputy Prime Minister Igor Shuvalov said on Thursday.
“Sometime in future, we will have to look seriously at creating a financial union, or maybe even a currency union,” he said. “So far, this issue is outside the current agenda.” The Eurasian Economic Union Treaty was signed by the leaders of Russia, Belarus and Kazakhstan on Thursday………………………………………..Full Article: Source

Bohai exchange’s new moly trading platform to boost price transparency, trade in China

Posted on 30 May 2014 by VRS  |  Email |Print

China’s Bohai Commodity Exchange, or BOCE, a government-backed online trading platform, has added molybdenum to its list of spot commodities, and this is expected to boost moly trade in the mainland and increase price transparency, industry sources said Thursday.
On May 27, BOCE — which is headquartered at Tianjin city in Hebei province, north China — officially launched moly concentrate and ferromoly spot trade on its trading platform at its new moly trade center at Luanchan city in Henan Province, central China………………………………………..Full Article: Source

U.S. 2014 agricultural exports near record $150 billion

Posted on 30 May 2014 by VRS  |  Email |Print

U.S. agricultural exports for fiscal 2014 will reach a record $149.5 billion, the Department of Agriculture said on Thursday, higher than its earlier forecast of $142.6 billion and up 6 percent on the year.
The forecast for the U.S. agricultural trade surplus in fiscal 2014 is up $6.3 billion from the February estimate to $39 billion, its second highest ever. The fiscal year started on Oct. 1 and will end on Sept. 30………………………………………..Full Article: Source

The state of carbon pricing: Around the world in 46 carbon markets

Posted on 30 May 2014 by VRS  |  Email |Print

Carbon markets, designed to make polluters pay and reduce emissions, are more common than ever. But the economic slump and the structural flaws mean they’re stumbling, a new report suggests. We take a whistlestop tour of the schemes.
As eight new markets opened in 2013, and both the US and China established programmes, there was some hope that carbon pricing was coming of age. But only 12 per cent of the world’s emissions are covered by the projects. And the last 12 months have been tough for some flagship schemes………………………………………..Full Article: Source

China’s Tianjin extends carbon compliance deadline

Posted on 30 May 2014 by VRS  |  Email |Print

Energy producers and industrial emitters covered by a carbon trading market in China’s Tianjin have been given an extra six weeks to comply with the scheme as many have yet to verify their 2013 emissions.
The setback marks the latest delay in China’s drive to force heavy industry to use market mechanisms to rein in rapid growth in greenhouse gases in the world’s biggest-emitting nation. The 114 firms in the scheme in the northern city of Tianjin were supposed to be the first in the country to hand over permits to the government to cover for their 2013 emissions………………………………………..Full Article: Source

Lower demand for commodities leads to higher commodity prices?

Posted on 29 May 2014 by VRS  |  Email |Print

China is the dominant consumer of commodities in the world, representing 40% of demand for industrial metals. Therefore, an economic slowdown in China should exert downward price pressure on commodities. That is only part of the story, however. In early 2014, commodities were at the top of the performance table for asset categories whilst the growth slowdown in China is common knowledge.
Koen Straetmans, Senior Multi-Asset Strategist at ING IM starts: “Two factors have played a specific role in the pricing of commodities this year: weather patterns and geopolitical risk………………………………………..Full Article: Source

Global ETP inflows hit $33.5bn in April, says BlackRock

Posted on 29 May 2014 by VRS  |  Email |Print

Year-to-date inflows in Europe bigger than those for the whole of 2013; Lyxor lists first ETF to track Euronext CAC PME index; commodity ETPs helped by precious metals and agriculture; ETFs tracking the healthcare sector see assets pass $1 billion.
Global exchange-traded product (ETP) inflows surged to a six-month high of $33.5 billion in April, representing the best April on record for the industry, according to figures from BlackRock. Europe-listed ETPs have attracted more assets in the first four months of 2014 than 2013 as a whole, resulting in $20.6 billion in inflows year to date………………………………………..Full Article: Source

Commodity Prices Slip Again in April: Scotiabank

Posted on 29 May 2014 by VRS  |  Email |Print

After a strong start to 2014, Scotiabank’s Commodity Price Index fell by 3.2% month-over-month (m/m) in April, the second consecutive monthly decline. The All Items Index is currently 1.3% below a year earlier.
“In the first half of 2014, the improvement in oil prices for Western Canada’s oil patch has been bolstered by a narrowing of the two price discounts which hurt earnings last year,” said Patricia Mohr, Scotiabank’s Vice President of Economics and Commodity Market Specialist. “Firstly, the Western Canadian Select (WCS) heavy crude oil discount off WTI oil declined to about US$21.57 per barrel (still high, but a US$4 improvement over a year ago). Secondly, the discount on WTI oil off Brent — the international benchmark — has also dropped to US$8 year-to-date (YTD). The net result, the S&P TSX Oil & Gas Exploration and Production Index has climbed by almost 16% YTD.” (Press Release)

America’s oil boom and the price at your pump

Posted on 29 May 2014 by VRS  |  Email |Print

After a harsh winter, it’s time to get out and hit the open road. So what’s with $4-a-gallon gasoline? North American oil production is on the rise, so you might have expected a break at the pump by now. Yet gas prices remain stubbornly high.
What happened to the homegrown energy boom? Isn’t there and oil and gas boom in the Permian Basin and North Dakota? How come gas isn’t back to $2 a gallon?……………………………………….Full Article: Source

Dubai in Land of OPEC Gives Blessing to Going Green: Arab Credit

Posted on 29 May 2014 by VRS  |  Email |Print

Dubai, better known for palm-shaped islands and the world’s tallest skyscraper than energy conservation, is on a mission to cut power and water use as the rising costs of fuel and desalination threaten future growth.
The utility leading the campaign for conservation is the one benefiting the most from soaring demand. Dubai Electricity & Water Authority, whose bonds have outperformed Persian Gulf companies on the strength of rising demand, created a unit to advise customers on ways to reduce consumption while the government may start a fund to help energy saving, Chief Executive Officer Saeed Mohammed Al Tayer said……………………………………….Full Article: Source

EU lays out energy plan, to reduce Russia dependence

Posted on 29 May 2014 by VRS  |  Email |Print

The European Commission laid out plans Wednesday to cut the EU’s costly reliance on energy imports, especially from Russia which has threatened to halt gas supplies to Ukraine, a key transit point for Europe.
A report prepared for European Union leaders recommended a broad series of measures to promote indigenous sources, including renewables and nuclear energy, and to make progress on a single energy market………………………………………..Full Article: Source

The coal industry and Asia in 2014

Posted on 29 May 2014 by VRS  |  Email |Print

New regulations and policy initiatives in China in 2014 can be expected to reflect the priorities set in China’s 12th Five-Year Plan, including “higher quality growth”, which includes a stronger focus on environmental protection, climate, and energy efficiency. However, despite stricter environmental standards, China’s coal demand is expected to increase by almost 20% over the next five years.
By the end of 2014, China is expected to finalise all of the seven pilot emission trading schemes it announced in 2011. Once finalised, China’s emissions trading schemes will cover about 7% of the country’s total greenhouse gas emissions in Shenzhen, Beijing, Shanghai, Tianjin and Chongqing, as well as in the Guangdong and Hubei Provinces………………………………………..Full Article: Source

Update On The Coal Sector

Posted on 29 May 2014 by VRS  |  Email |Print

We always try to keep an open mind to various types of investments; be they a type of technology, a certain company or a specific industry. Even when we form an opinion on an industry that is working, we constantly research to see whether we need to adjust our position to the opposite of where we are or move to a neutral posturing.
With that said, we have come across an interesting report on the coal sector, and we wanted to highlight that today based on the fact that we recently discussed the coal names mentioned in this report………………………………………..Full Article: Source

Global gold prices will depend on India’s import policy: S&P DJI

Posted on 29 May 2014 by VRS  |  Email |Print

Even as the risk appetite in the West is on the rise and US manufacturing activity is gaining momentum, gold prices may take a cue from India’s policy on imports, according to experts at S&P Dow Jones Indices.
The experts at S&P DJI noted that gold as a safe haven investment instrument was slowly losing sheen on account of tapering programme by the US Federal Reserve and improvement in the investment environment. Investors used gold as a store of value in the instances of crisis or inflation to safeguard the real value of the investments………………………………………..Full Article: Source

Gold sinking as ETP assets drop to lowest since 2009

Posted on 29 May 2014 by VRS  |  Email |Print

After two months of treading water, gold prices are starting to sink. Futures in New York reached a 15-week low on Wednesday after investors sent US equities to a record high. Assets in global exchange-traded funds backed by bullion are near the smallest since 2009, and money managers have cut their bets on a rally by a third since this year’s peak in March.
Gold’s slump is erasing gains from earlier this year, when increased tension between Ukraine and Russia and a winter slowdown for US economic growth sent prices to their biggest first-quarter gain since 2008. Goldman Sachs Group Inc. and Societe Generale SA are predicting the metal will extend 2013’s 28% slump. Futures have tumbled 9.1% from this year’s high in mid-March………………………………………..Full Article: Source

Gold prices ease in Asia with China, India demand eyed

Posted on 29 May 2014 by VRS  |  Email |Print

Gold prices eased in Asia Wednesday with the focus on demand prospects in India and China as the world’s top two importers of the yellow metal. On the Comex division of the New York Mercantile Exchange, Gold futures for August delivery traded at $1,262.20 a troy ounce, down 0.28%, after hitting an overnight session low of $1,264.60 and off a high of $1,293.50.
China has mulled measures to boost its economy and India’s recent federal election brought in a new government dedicated to taming inflation and shoring up public finances. Investors are eyeing those efforts for signals on demand, particularly India where the previous government had moved to restrict gold imports………………………………………..Full Article: Source

Gold Bear Market Is Losing Momentum

Posted on 29 May 2014 by VRS  |  Email |Print

It’s constructive to look at the other side of your positions to see where you might be wrong. If you’re long a market, a good way to do this is by taking the inverse of the symbol representing your position. At stockcharts.com, you do this by putting “$ONE:” in front of your symbol and it shows you a chart of the inverse of your position.
I like to do this instead of looking at the leveraged ETFs because they tend to decay over time. The non-leveraged inverse ETFs are fine, but they don’t exist for many markets. Therefore using “$ONE:” gives you the bear market perspective of anything you want to look at………………………………………..Full Article: Source

If Market Can’t Hold $1,220, Gold May Head Towards $1,000: iiTrader (Video)

Posted on 29 May 2014 by VRS  |  Email |Print

Kitco News speaks with iiTrader’s Bill Baruch, following gold’s dip below $1,260 on Wednesday, to see if he thinks the yellow metal is headed lower. “A lot of volume was built in these June options that went off yesterday so we started to see a move ahead of that [on Tuesday] and the market took the downturn,” he says.
“The Ukraine situation seemed to take a step in a positive direction and any safe-haven buying that was found because of that was then coming out of the metal as well.” Baruch says that it is important to keep an eye on the ECB meeting, as well as nonfarm payrolls, next week. He also says that it is important for gold to hold the $1,220 level………………………………………..Full Article: Source

Jeff Wright sees Gold to avg $1,300/Oz in 2014; Not moving more than $50 in either direction

Posted on 29 May 2014 by VRS  |  Email |Print

Gold should stay centered around $1,300/oz, not moving more than $50 in either direction, through the end of the year. Forces holding gold within that narrow band include the U.S. Federal Reserve tapering quantitative easing to a point where, possibly in mid-October, asset purchases will end and interest rates will increase. Also, the macroeconomic environment’s improvements are still fairly soft.
The one area of concern that could drive gold either much higher or much lower is the continuing crisis in the Ukraine. There is safe-haven demand around the world to avert exposure to what is now viewed as a soft conflict. If the conflict between Ukraine and Russia escalates, gold could go above $1,350/oz. If there is a peaceful resolution, gold could dip lower before coming back up $1,250–1,300/oz………………………………………..Full Article: Source

Will Silver Prices Rally Soon?

Posted on 29 May 2014 by VRS  |  Email |Print

The price of silver has softened by 2.3% since the start of 2014. Yet the price of gold has rallied, spiking a healthy 5% over the same period. This is contrary to the historical correlation that has existed between the two metals, with silver typically following gold. We have seen a key measure of this correlation, the gold-to-silver ratio, continue to widen. The gold-to-silver ratio represents the number of ounces of silver required to buy one ounce of gold.
There are those who argue the ratio should sit somewhere between nine and 19, representing both where the ratio has sat historically and the natural occurrence of silver compared to gold. But with the ratio having topped out at 100 twice in the last 40 years, once in 1980 and again in 1991, it is a fluid measure of the value of silver in comparison to gold………………………………………..Full Article: Source

Nickel, Palladium and Platinum Metals Outperforming in 2014

Posted on 29 May 2014 by VRS  |  Email |Print

Platinum, Palladium and Nickel are outperforming the S&P 500 by a wide margin in 2014. The relative strength is fundamentally due to declining supply from key regions such as South Africa, Russia and Indonesia.
Growth for Platinum, Palladium and Nickel is very strong especially in growing economies in Asia which need catalytic converters and stainless steel. China has hardly any domestic PGM or nickel production. They must import. Focus on advanced PGM/Nickel development projects in stable jurisdictions in North America………………………………………..Full Article: Source

Palladium reaches 3-year high as gold sags

Posted on 29 May 2014 by VRS  |  Email |Print

Palladium rose to the highest since August 2011 after mining companies and the main labor union failed to reach an accord to end a pay strike in South Africa, the second-biggest producer. Gold fell to a 15-week low.
Palladium has risen 12 percent since Jan. 23, when the workers walked out. The country’s new miningminister will talk with the companies after meeting leadership of the Association of Mineworkers and Construction Union yesterday, his department said in a statement on its website………………………………………..Full Article: Source

Copper’s wake-up call

Posted on 29 May 2014 by VRS  |  Email |Print

Copper spreads on the London Metal Exchange (LME) tightened sharply last week as the market finally started reacting to the continued steady erosion of available stocks. The previous disconnect between dwindling stocks availability and a relatively loose market structure had caused much collective head-scratching in the market.
The conundrum looks as if it is now being resolved as front-month backwardation returns to levels historically associated with the current low level of stocks. A research note by Goldman Sachs, advising short position-holders to roll out of the front part of the curve, seems to have acted as a collective wake-up call………………………………………..Full Article: Source

US steel sheet prices continue to trade in narrow range: sources

Posted on 29 May 2014 by VRS  |  Email |Print

US steel sheet prices continued to trade in a narrow range Wednesday, though one market source reported a deal well below prevailing prices. Platts maintained its daily hot-rolled and cold-rolled coil assessments at $680-690/st and $810-820/st, respectively — both normalized to a Midwest (Indiana) mill ex-works basis.
One top-tier producer reported an HRC sale of more than 3,500 st in the southern US at $680/st, with an unspecified delivery date, and as a deal with another buyer for July shipment for just more than 400 st at the same price. Only the 400 st transaction was within Platts lot size specifications of up to 500 st………………………………………..Full Article: Source

Are Precious Metal ETFs Dead In The Water?

Posted on 29 May 2014 by VRS  |  Email |Print

Flash back to the summer of 2011. The U.S. Congress struggled with a decision to raise the debt ceiling. The “PIGS” (i.e., Portugal, Italy, Greece, Spain) had dramatically overspent, endangering the existence of the euro-zone. Stocks cratered. The CBOE S&P 500 Volatility Index (VIX) soared. Meanwhile, the SPDR Gold Trust (ARCA:GLD) catapulted 26% in a matter of six weeks.
Flash forward to the summer of 2014. Tensions have flared up between Russia and Ukraine, but the conflict has had little direct impact on stock assets. Even fewer seem concerned about the sustainability of country debt in Europe. What’s more, gold bears have hammered the idea that the yellow metal might serve as a safe haven against political turmoil, inflation or electronic money printing………………………………………..Full Article: Source

Which Commodity ETPs Should You Buy?

Posted on 29 May 2014 by VRS  |  Email |Print

You know, an 18 percent gain over 12 months isn’t a bad return. That’s how much the S&P 500 has appreciated since April 2013. But the index is now stalled. In fact, since New Year’s Day, domestic equities have been ceding ground to commodities—a reversal of a two-year trend.
Consider “soft” commodities such as coffee and cocoa. In the past year, “spot” (immediate delivery) prices for Arabica coffee have shot up 53 percent because of a crippling drought in Brazil, the world’s top producer. Supply deficits have similarly ratcheted cocoa prices up 25 percent over the last 12 months. Corn’s been a different story, though. Cash maize prices have slumped 17 percent amid rising inventories………………………………………..Full Article: Source

What Is an ETF?

Posted on 29 May 2014 by VRS  |  Email |Print

Most investors know how to answer the question “What is an ETF?” in a very basic way - but knowing all the details of what an exchange-traded fund offers can add a lot of value to your portfolio. The simple definition of what an ETF is, according to Investopedia, is a basket of assets or a commodity that trades on a stock exchange. An ETF’s price can change quite a bit on an intraday basis, depending on how much it is bought or sold each day.
But there’s more to answering “what is an ETF” than that. How are ETFs traded? What makes them different from other investing vehicles? Are they better or worse than stocks, bonds, mutual funds, and other options?……………………………………….Full Article: Source

Paper money is unfit for a world of high crime and low inflation

Posted on 29 May 2014 by VRS  |  Email |Print

Has the time come to consider phasing out anonymous paper currency, starting with large-denomination notes? Getting rid of physical currency and replacing it with electronic money would kill two birds with one stone.
First, it would eliminate the zero bound on policy interest rates that has handcuffed central banks since the financial crisis. At present, if central banks try setting rates too far below zero, people will start bailing out into cash. Second, phasing out currency would address the concern that a significant fraction, particularly of large-denomination notes, appears to be used to facilitate tax evasion and illegal activity………………………………………..Full Article: Source

Scotland: Separate currency ‘most likely’

Posted on 29 May 2014 by VRS  |  Email |Print

A separate currency is the most likely option for an independent Scotland, according to a report from Barclays. The report considers four currency options if Scotland votes Yes in the referendum, including a formal monetary union with the UK, an informal monetary union with the UK or so-called Sterlingisation, joining the euro area, and an independent currency under various monetary regimes.
The bank said it takes no stand on the political question of how Scotland should vote or which outcome is in the best interests of Scotland economically………………………………………..Full Article: Source

Renminbi is far from being a reserve currency

Posted on 29 May 2014 by VRS  |  Email |Print

Scarcely a week passes without news about the ascendance of China’s currency, the renminbi. But China has a long way to go before its currency can rival — let alone displace — the dollar as the dominant global reserve currency.
To be sure, China already plays a significant role in international trade and finance, with major financial centres like London and Frankfurt eagerly lining up for renminbi business. Recent speculation that China’s economy may soon be as large as America’s has boosted this interest further, causing many to believe — whether ruefully or gleefully — that the renminbi will soon dominate………………………………………..Full Article: Source

US emissions trading schemes poised for wider role

Posted on 29 May 2014 by VRS  |  Email |Print

One consequence of the Environmental Protection Agency’s new carbon dioxide rules may be a wider role for the fledgling US emissions trading schemes such as the Regional Greenhouse Gas Initiative, which covers nine states in the northeast of the country.
It has not yet been formally confirmed, but it seems very likely that participation in the RGGI or a similar scheme would be accepted by the EPA as a way to comply with its regulations………………………………………..Full Article: Source

IEA Graphic Shows How to Radically Reduce CO2

Posted on 29 May 2014 by VRS  |  Email |Print

Worldwide, nations are going to have to slash their greenhouse gas emissions drastically to prevent average global temperatures from warming beyond the point of no return, which many scientists consider to be 2°C warmer than average temperatures just before the industrial age.
In fact, the International Energy Agency in a new report says “radical action” is needed to transform how we produce and consume energy in order to prevent the worst of global warming………………………………………..Full Article: Source

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