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Commodities Briefing 28.Oct 2008

Posted on 28 October 2008 by VRS |  Email |Print

From FT: Gold’s popularity among investors has soared over the past year as the credit crunch has rocked financial markets.

The US Mint has sold all of its stock of some popular gold coins, sales of gold bars have risen strongly and gold exchange traded funds have seen record inflows as investors looked for a safe haven from the turmoil affecting credit and equity markets….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Mineweb.com: The credit crunch has put $50 billion of capital expenditure for new or expending projects at risk, according to Credit Suisse.

The credit crisis risks delaying around $50 billion of the mining sector’s capital expenditure used to fund new or expand existing projects in 2009, Credit Suisse said on Monday….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From BBC: The US dollar and the Japanese yen are emerging as winning currencies in the global financial crisis. Both are considered safe havens because their banks have lent less than banks in other countries to emerging markets.

In contrast, the main currency losers have been the euro and the British pound. Investors had been using dollar-denominated loans to invest elsewhere, but as the crisis has worsened cash-strapped banks and lenders have been calling in these loans, which has resulted in a scramble for dollars to pay them off….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From FT: Oil prices fell to a fresh 17-month low on Monday, trading just above $60 a barrel, on signals of lower energy demand in November, in spite of the arrival of the cold season in the northern hemisphere.

Nippon Oil, Japan’s largest refiner, said it will refine 15 per cent less crude oil next month than it did a year earlier because of weakening domestic demand….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From People.com: China Steel & Iron Association has called a conference of the largest domestic steelmakers to work out a common stand in bargaining with major iron ore producers in the 2009 round of price negotiations starting next month.

This round of negotiations is expected to be different from previous ones that were largely dominated by the ore suppliers. This time, the market situation has changed as fallout from the global credit crisis has greatly depressed demand….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Bloomberg: Investments in funds tracking the Dow Jones-AIG group of commodity indexes plunged $20 billion, or 36 percent, in the third quarter amid financial market turmoil and concerns the global economy may fall into a recession.

About $35 billion tracked the commodity indexes at the end of the third quarter, Dow Jones said today in an e-mailed statement. That compares with $55 billion at the end of the second quarter as the index surged toward a record on July 3….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From CNN: China’s reliance on cheap coal to fuel its economy cost a hidden $248 billion last year through damage to the environment, strain on the health care system and manipulation of the commodity’s price, according to a report released by Greenpeace.

Coal accounts for more than 70 percent of China’s energy use, helping to buttress the country’s double-digit economic growth. But as demand for electricity has soared, supplies of coal have been strained — and the government’s role in keeping prices low has become more expensive….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Mondovisione.com: Dubai Gold & Commodities Exchange (DGCX) announced changes to its Indian Rupee futures contract. The revised Indian Rupee futures contract will be available for trading from November 3, and will provide cash settlement in US Dollars, facilitating the settlement process for both local and international market participants.

More contracts will be available on a monthly basis out to twelve months forward and trading hours will be extended to 08.30 to 23:30. In addition, the last trading day will be two business days prior to the last business day of the contract month….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Hardassetsinvestor.com: OPEC has been insisting that the oil market is oversupplied for months, and at its heavily anticipated emergency meeting last Friday, instigated by crude prices that have dropped over 50% since summer, they finally did something about it.

A reduction of 1.5 million barrels per day (bpd) will take effect on Nov. 1 - effectively cutting OPEC’s production by around 5%. How did the market react?…. Full Article: Source

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From Business-standard.com: Despite the global turmoil, gold prices have been falling, of late. It’s no more being seen as a safe haven. The yellow metal has failed to perform in the past years of crisis too.

Looking at the Samvat year’s performance of various assets, it is clear that gold has not performed. This only proves that the yellow metal, at best, acts as a capital protector. During Samvat 2064 that has just ended, the global financial instability and liquidity crisis eclipsed stocks and financial markets all over the world….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Forbes: Copper soared 7 percent Monday as a rise in new home sales gave hope the ailing sector could have hit bottom, while grains rallied on bargain hunting after a recent sell-off linked to the sinking stock market.

Crude oil closed at an 18-month low amid continued concerns that a global recession would dent demand, while gold rose as the dollar surged to a 2-1/2-year high against the euro….. Full Article: Source

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From Bloomberg: Cocoa fell for a ninth straight session, heading for its biggest monthly drop since 2003, as the dollar’s surge increased the cost of commodities for overseas buyers.

The dollar rose against the U.K. pound for the seventh straight session as investors sought a haven from plunging emerging-market stocks and bonds. That increased the price of cocoa for buyers with pounds, the currency used to pay for the chocolate ingredient in West Africa, the world’s biggest supplier. …. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Ftadviser.com: ETF Securities has completed the acquisition of Gold Bullion Securities, the world’s first listed provider of gold ETCs. Graham Tuckwell, chairman of ETF Securities, said the acquisition underlined its ambitions within the ETC arena.

He said: “These products will fit well within our commodities platform and be part of an expanded marketing effort for gold products in particular.” The London and Australian-listed products will give the ETF provider an increased share of the market and be added to its range of more than 120 ETCs….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Livemint.com: India’s third largest commodity bourse National Multi-Commodity Exchange today said it will kick start futures trading in cotton (V-797 variety) on 3 November.

“Futures contract in kalyan kapas (V-797) as approved by Forward Markets Commission will be available for trading with effect from 3 November,” NMCE circular said….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Seekingalpha.com: Corn-based ethanol, which always was a mistake, is finally out of favor, and the crop price has fallen to $4/bu. This is just the beginning of a long-term secular decline in corn’s fortunes. First, the US fiscal wreckage will put pressure on its subsidy payments.

Far more important, the cost of US health care will turn the debate to the causes of poor health itself, and the fact of our underlying poor diet….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Mineweb.com: The World Gold Council reports that gold jewellery demand fell 21 percent year on year in the second quarter, but anecdotal eveidence suggests a sharp pick up in the third quarter.

The gold price drove demand for jewellery 21% down in the second quarter of this year compared to the second quarter of 2007. This came as the gold price remained high and volatile and inflation spread across the world….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From FT: If “IMF” and “G7” are in the headlines, it follows that the financial crisis is not going away. Rather, with the panic now concentrated in the foreign exchange markets, the danger to the world’s economy becomes all the more acute.

The G7’s warning that it was “concerned” about “excessive volatility” in the yen and its “implications for economic and financial stability”, was highly unusual. Markets took it as a signal that intervention could be imminent….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Chinadaily.com: A month after two environment and energy exchanges opened virtually simultaneously in Beijing and Shanghai in August, an environmental trading platform was established in Tianjin municipality, one of most vigorously developing cities in China.

The newly unveiled Tianjin Climate Exchange (TCX) is a joint venture of US-based Chicago Climate Exchange (CCX), China National Petroleum Corporation Assets Management Co Ltd (CNPCAM) along with Tianjin Property Rights Exchange (TPRE)….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From RIAN: Russia expects its best grain harvest in 16 years this year and is planning to develop eastern export markets, the country’s agriculture minister said.

Speaking to parliament’s upper house, Alexei Gordeyev said that this year was witnessing the largest grain harvest since 1992, with the 2008 crop expected to exceed 100 million metric tons in net weight….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Mineweb.com: Despite government moves around the world to allay the financial meltdown, it’s not over yet and in the meantime gold and silver may offer the best bets for capital protection.

There has seldom been a more appropriate occasion in which to use the immortal words of Yogi Berra - “It ain’t over ’til it’s over”- than the current financial turmoil which has seen world stock markets decimated and commodities prices plunging….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Iii.co.uk: Australian Crop Forecasters (ACF) cut its forecast for the country’s 2008/09 wheat crop by 2.5 percent on Tuesday after crop failures in the south-east grainbelt.

ACF said it now expected the harvest to be 19.5 million tonnes, down from a 20 million tonnes estimate on Oct 21, following hot weather damaged crops in the states of Victoria and South Australia at the weekend….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From USAtoday.com: The real King Solomon’s mine? Archaeologists reported finding a desert site not full of gold or diamonds but loaded with copper and offering a new glimpse of Bible-era industry.

Jordan’s Khirbat en-Nahas site has intrigued archaeologists since the 1930s, when they first linked ruins there, including a fortress, copper mine and smelter, to the Bible’s Edomite kingdom. Debate has ensued ever since over whether Edom really existed in the 1000 B.C. era of King Solomon described in the Old Testament….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Guardian.co.uk: The next president should use the Clean Air Act to control greenhouse gas emissions and establish a national cap-and-trade programme.

The urgency of the current situation cannot be overemphasized: The latest scientific research tells us that global warming is accelerating at a rate beyond previous expectations, and that the window for a timely response is closing quickly….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Bloomberg: Gold rose after U.S. equity indexes erased earlier declines, reducing the need to sell the precious metal to cover losses in other markets. Silver fell.

Gold fell 7.3 percent last week as the Standard & Poor’s 500 Index lost 6.8 percent. The metal touched $681 an ounce on Oct. 24, the lowest since Sept. 4, 2007, as share indexes plunged worldwide on concern that a global recession may damp demand for raw materials. The S&P fell as much as 2.4 percent today before rebounding to gain as much as 1.9 percent….. Full Article: Source

Posted on 28 October 2008 by VRS |  Email |Print

From Chinapost.com.tw: Crude oil, copper and gold led a drop in commodities, heading for the worst month in at least 38 years, on expectations a global recession will curb raw-material demand.

Oil extended four consecutive weekly declines, copper traded at a three-year low and the slide in gold increased the chances of the metal breaking its seven-year winning streak….. Full Article: Source

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