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Commodities Briefing 20.Nov 2008

Posted on 20 November 2008 by VRS |  Email |Print

From FT Adviser: The slump in gold prices in the last eight months will continue into the new year as people begin to seek out riskier investments, according to AM Ruthven & Associates Ltd.

Gold prices, however, have fallen back since then with the strengthening in the value of the US dollar a key factor behind this reversal…. Full Article: Source

Posted on 20 November 2008 by VRS |  Email |Print

From Sfgate.com: In his first speech on global warming since winning the election, President-elect Barack Obama promised Tuesday to set stringent limits on greenhouse gases, saying the need is too urgent for delay.

Many observers had expected Obama to avoid tackling such a complex, contentious issue early in his administration. But in videotaped comments to the Governors’ Global Climate Summit in Beverly Hills on Tuesday, he called for immediate action….. Full Article: Source

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From BBC: Opec members have lost about $700bn (£467bn) because of falling crude prices, the oil cartel’s president Chakib Khelil said in an interview.

Oil prices have fallen 60% from their $147 peak, prompting speculation Opec will cut output again to boost prices….. Full Article: Source

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From FT: With stock market volatility running close to all-time highs, trading equity volatility as a separate asset class is becoming more expensive and hedge funds are turning their attention instead to the commodities markets.

Derivatives based on commodity indices provide cheaper access to the “long volatility” trade that has been among the most successful equity market strategies of the past two years….. Full Article: Source

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From Indiatimes.com: Commodities- long considered to be an efficient asset diversifier - have not been spared in the recent global financial market mayhem. While the bull run was perceived to have been driven by the demand from emerging markets and broader supply constraints, the recent fall in prices has kept investors wondering over the prospects of a recovery,

The signals that commodity prices are moving further below long-term equilibrium levels continue to grow. Despite the growing lists of producers cutting output and projects being cancelled or deferred, prices show little signs of bottoming out….. Full Article: Source

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From Financialpost.com: Canada’s carbon footprint is making its mark in the national, and the international, marketplace. Earlier this year, the Montreal Climate Exchange (MCeX) launched trading of futures contracts on Canada CO2e, or what the world likes to call carbon credits.

The country’s first foray into the carbon futures market is significant, says Jean Piette, a senior partner with Ogilvy Renault in Montreal and the first lawyer in Quebec to develop a practice devoted entirely to environmental law….. Full Article: Source

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From Skynews.com.au: The outlook remains bleak for commodity prices with more falls expected next year for coal, iron ore and base metal prices. Surpluses have been building in a host of commodities as the financial crisis grips and consumer demand slows, driving prices down.

Economists and analysts alike are predicting the weakness to continue well into next year. ‘Copper really is the bell weather commodity out of the lot, that’s the one that really gets looked at,’ Chris Weston from IG Markets said. ‘There is a lot of talk it could fall considerably.’…. Full Article: Source

Posted on 20 November 2008 by VRS |  Email |Print

From Reuters: State-controlled Russian banking major Sberbank said on Wednesday sales of precious metals have surged this year as its clients seek safe investments in the face of turbulent financial markets.

Sberbank, Russia’s largest lender, said its clients had bought around 6 tonnes of silver ingots in the first 10 months of the year — three times as much as during the whole of 2007. Gold purchases for the period totalled 10 tonnes, or 1-1/2 times as much as during the whole of last year….. Full Article: Source

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From Guardian: Cash raised from selling carbon allowances to companies to cover their emissions should be used to pay for measures such as improving energy efficiency in homes, a thinktank urged.

Some 7% of the UK’s carbon permits distributed under the new phase of the EU’s emissions trading scheme (ETS) will be auctioned, instead of being handed out for free….. Full Article: Source

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From Guardian: OPEC must act more promptly in raising oil output in case of a shortage, the head of the International Energy Agency (IEA) said on Wednesday, as the producer group meets next week to discuss sliding prices and demand.

“If (there is) a shortage of supply, we would want them to act more quickly,” Nobuo Tanaka, executive director of IEA, said on the sidelines of its World Energy Outlook 2008 presentation in Seoul….. Full Article: Source

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From Straitstimes.com: China is expected to reform its oil pricing mechanism within 20 days as part of efforts to reduce consumption and air pollution, state media reported on Wednesday.

The China Daily quoted on its website an anonymous source ‘close to Beijing’s top decision-making circles’ as saying the new price system would be released within 20 days….. Full Article: Source

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From Independent: The Chancellor, Alistair Darling, is being urged to put £54m raised from auctioning carbon credits into a dedicated fund to promote green measures in Britain.

Allowances granting the right to produce some four million tonnes of carbon went under the hammer yesterday, with each tonne selling for around £13.60. The funds, which were raised in the world’s first carbon auction, go to the Treasury….. Full Article: Source

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From Reuters: ICE Futures U.S., a wholly-owned subsidiary of IntercontinentalExchange Inc, said Tuesday it will change electronic trading hours for certain agricultural futures and options contracts.

ICE said it has reduced the trading hours by 30 minutes for some agricultural products and the RJ-CRB index. Trading will end at 2:45 p.m. EST (1945 GMT). Those products used to trade until 3:15 pm EST. The change is effective with the start of trading on Monday, December 1, 2008….. Full Article: Source

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From FT: Sales of gold coins and bars reached their highest levels for more than a decade in the third quarter while gold exchange traded funds saw record inflows as investors sought a safe haven from the crisis in financial markets following the collapse of Lehman Brothers, the US investment bank.

The enormity of that rush into the gold market in the third quarter was revealed by the World Gold Council in its latest Gold Demand Trends report, published on Wednesday….. Full Article: Source

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From Investopedia.com: Depending on the nature of the fund and the manager, it is quite likely that a hedge fund would invest in commodities, especially in a high inflation environment when prices for commodities such as precious metals, energy and real estate usually increase substantially.

Investing in commodities in a high inflation environment is usually a wise investment. One caveat here is that hedge funds and hedge fund managers may invest in anything they see as a wise investment….. Full Article: Source

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From Nytimes.com: The world should hold a food summit in the first half of next year to seek fairer trade and help farmers in poor countries make a decent living, the head of the United Nations food agency said on Wednesday.

Jacques Diouf, head of the Food and Agriculture Organization (FAO), said the summit would seek to reform trade, encourage greater food production in developing countries and ensure funding for infrastructure and agricultural productivity….. Full Article: Source

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From Theglobeandmail.com: Aluminum prices matched a three-year low and copper shed nearly 4 per cent Wednesday as hefty builds in warehouse stocks reinforced concerns about weaker demand, particularly from the auto industry.

Aluminum for delivery in three months on the London Metal Exchange fell to $1,870 (U.S.) a tonne, matching Tuesday’s low price, which was the lowest since October, 2005. The energy-intensive metal ended at $1,878 a tonne, down from $1,918 at the close on Tuesday….. Full Article: Source

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From Forbes: Now that corn prices have plunged, is the ethanol industry still in the hot seat for driving up prices? Just a few short months ago, when agricultural commodity prices reached their peaks, U.S. biofuel companies took the heat for a litany of woes: high food prices, world hunger and misplaced government spending.

The corn-dependent industry faced blame from a diverse alliance of cattle ranchers, grocers and environmentalists….. Full Article: Source

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From FT: Falling oil prices are set to cost the government about £6bn in revenues next year, putting further pressure on strained public finances.

Although the loss of tax receipts will be offset by the beneficial effects to the economy of the falling oil price, the plunge from its peak of more than $145 per barrel in July has called into question the outlook for North Sea production. North Sea oil is an important source of government revenues, employment and export earnings….. Full Article: Source

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From Bloomberg: Crude oil fell for a fifth day, approaching $50 a barrel, as the contracting world economy increases concerns that demand for fuels will slow.

U.S. fuel use during the past four weeks averaged 19.1 million barrels a day, down 7 percent from a year ago, an Energy Department report said yesterday. The MSCI Asia Pacific Index dropped for a fourth day, down 3.7 percent to 76.30. This followed a drop yesterday in the Dow Jones Industrial Average to the lowest since March 2003….. Full Article: Source

Posted on 20 November 2008 by VRS |  Email |Print

From Investorschronicle.co.uk: On the day I went to meet Jim Rogers, Xstrata had announced that it would close two nickel mines earlier than planned. Several producers in the former Soviet Union had reined back capital investment.

The price of oil fell below $60. Was this the end of the commodity bull market he predicted back in the late 1990s, I wondered. Absolutely not. “This is making the fundamentals better for commodities…farmers cannot even get loans for fertiliser any more, inventories for agricultural products are the lowest they’ve been for fifty years….. Full Article: Source

Posted on 20 November 2008 by VRS |  Email |Print

From Mineweb.com: Investors in platinum and palladium exchange traded funds are fundamentally different people who treat their investments differently. Palladium ETFs are now a significant demand sector of the metal.

Investors in platinum and palladium exchange traded funds (ETFs) have proved to be two fundamentally different groups of people with platinum fund investors holding their investments for a short term and palladium fund investors taking a longer-term view….. Full Article: Source

Posted on 20 November 2008 by VRS |  Email |Print

From Forbes: Gold ended higher Wednesday but prices pulled back sharply off of the day’s early gains as investors were overcome by a strengthening dollar and more bleak economic data.

Other precious metals prices fell. Agriculture and energy futures also declined. Gold and other commodities got a slight boost early in the day from a weakening dollar, but futures turned lower as the dollar strengthened later in the day….. Full Article: Source

Posted on 20 November 2008 by VRS |  Email |Print

From CNN: The dollar lost ground against major currencies Wednesday as stocks fell hard and reports showed an economy in contraction. A selloff gained momentum near the close Wednesday and the major indexes tumbled to 5-1/2 year lows.

The U.S. currency fell against the British pound, which rose to $1.4972 from $1.496 late Tuesday. The dollar also lost ground Wednesday against the Japanese yen at ¥95.93 from ¥96.75 Tuesday in New York….. Full Article: Source

Posted on 20 November 2008 by VRS |  Email |Print

From Bloomberg: Canada’s currency weakened for a second day as global stocks dropped and oil prices fell, diminishing the outlook for countries that rely on commodity exports.

The Canadian dollar fell as much as 1.8 percent to C$1.2538 per U.S. dollar, from C$1.2312 yesterday. It traded at C$1.2528 at 4 p.m. in Toronto. One Canadian dollar buys 79.80 U.S. cents….. Full Article: Source

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