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Commodities Briefing 17.Dec 2009

Posted on 17 December 2009 by VRS |  Email |Print

From Resourceintelligence.net: In its updated report on global commodity strategy, BMO Senior Commodities Analyst Bart Melek lauds stimulus packages around the world as stemming “possible depressing and massive deleveraging and panic selling”.

These international efforts led global commodities markets to perform far better than could have been predicted at the start of the year. Base and precious metals and energy commodities performed “extremely well”………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Dow Jones: A major Wall Street bank has found a link between an increase in speculative bets on commodity futures and rising prices–because both are logical reactions to shifting economic conditions.

In a study published Wednesday, analysts with J.P. Morgan Chase & Co. (JPM) found that information indicating rising demand and tightening supplies tends to inflate prices while luring banks and hedge funds into a market at the same time………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Forbes: Over 90 percent of the market swings in oil since 2006 were due to supply shocks, not price speculation, JPMorgan said Wednesday in a study that questions tough market curbs proposed on commodity investors.
“It is often heard in non-market circles that if speculators move prices, then removing speculators from the equation would reduce prices,” JPM, one of the leading voices in commodities among Wall Street banks, said in the study………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From WSJ: Small-capitalization stocks closed higher as a pickup in commodities prices drove broad gains for small energy and materials stocks.

For energy firms, the push higher came as oil prices reversed some recent weakness after the Department of Energy reported crude-oil stockpiles dropped more than expected………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Marketoracle.co.uk: Anything can happen in commodity trading. As much as inflation can come about there can be deflation and result in a declining market. Most people do not think it is possible to profit in a declining market.
This could not be further than the truth. As long as there exist trends profits can be made on the upside or on the downside. However on the upside there is no limit how high it can go…so there is statistically more profits on the upside………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Investors Business Daily: Commodities rallied across the board Wednesday as the U.S. dollar dipped from a two-month high and the Federal Reserve said it would keep short-term interest rates at record lows for an “extended period.”

IPath DJ AIG Sugar Total Return Sub-Index ETN, which tracks sugar futures, blasted 5.15% to 73.31 in above-average volume. It outpaced all ETFs, including leveraged ones………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Forbes: As the global economic expansion becomes more evident and accelerates in 2010, commodity prices will keep pace with stocks, as China continues to stockpile industrial inputs. A resurgent dollar for most of the year will keep the lid on gains.
After crashing 57% from July of 2008 through early March of 2009, commodity prices as measured by the Dow Jones-UBS Commodity Index have rallied nearly 30% through mid-December, but still need to gain 130% to get back to the 2008 peak………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Insidefutures.com: Gold has been the asset to own in the past year, and now people are starting to question it. On the other hand, natural gas has finally seen a spark and investors are wondering whether it’s time to buy this beleaguered market. The picture for crude oil is a bit more complex.

Gold has been the asset to own for the past year. Now that gold’s seen a correction, people have started to doubt it. I think gold still looks bullish in the coming year, and if you are a long-term investor, I recommend considering dips as opportunities to buy at cheaper levels………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Commodityonline.com: Whom should we believe on gold prices? Jim Rogers, Peter Schiff or Nouriel Roubini? That is the questions I have been asking several bullion traders and gold dealers across China these days.
Some are optimistic and agree with Schiff that gold will indeed cross the massive $5000 per ounce mark that Schiff has predicted. Others say people like Schiff are inflating the value of gold by inflated predictions………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Mineweb.com: In its latest quarterly Commodity Review, investment bank Société Générale forecasts continued strength in investor flows into commodities in the first half of 2010, helped by central banks keeping policy rates at extremely low levels.
The bank suggests that, not least due to the size of the output gap in the United States, the recently developed fears of an increase in FOMC interest rate policy has been overdone and therefore recommends buying into the latest correction in commodity prices………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Commodityonline.com: In today’s turbulent, volatile, roller-coaster market, is the age-old adage about “Buy and Hold” bad advice? In recent months I have heard or read comments such as…”The “Buy and hold strategy” is an archaic idea and would be financial suicide in today’s market.”

“People are better off with short-term strategies so that they can try to buy before the market goes up and sell before the market goes down. Then…when the market goes down, that is a buying opportunity. Use the volatility in your strategies”……………………………….Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Reuters: Gold hit a record $1,226.10 an ounce on Dec. 3, as prices were boosted by speculation that more central banks will diversify their foreign exchange reserves into bullion, and by weakness in the dollar.

They have since pulled back to just below $1,110 an ounce as the dollar strengthened in response to better than expected U.S. economic data, but analysts said the underlying bull trend was intact………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Purchasing.com: Global commodity statistical groups are quibbling over exact tonnage in excess but the fact is that zinc supply is outpacing demand this year and that could be setting the stage for reduced pricing in 2010-especially if the dollar starts to rebound as the U.S. economy recovers.

Zinc has been selling at an average $1.05/lb this month on the London Metal Exchange (LME), the first time it has passed $1 since April 2008 despite continued lack of……………………………….Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Mineweb.com: Copper prices are likely to shake off their traditional year-end fall in 2009 because of investment fund buying, the chief executive of Aurubis, Europe’s largest copper producer, said on Wednesday.

“I do not expect a copper price fall at the end of 2009 as happens in most years,” Bernd Drouven said………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Gulf-times.com: Global energy demand will rise 35% in 2030 compared with 2005 due to a host of reasons including the rapid expansion in non-OECD countries such as China and India, an ExxonMobil outlook shows.

This necessitates trillions of dollars in investment and a commitment to innovation and technology, ExxonMobil said in its latest edition of Outlook for Energy: A View to 2030’……………………………….Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Forbes: Carbon taxes discriminate against energy producing states so OPEC members oppose them, Algeria’s energy minister said, adding his country was wary of European plans for huge solar power investment in North Africa.

Some developed countries have imposed, or plan to impose, taxes on carbon emissions as part of efforts to slow climate change………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Kyodo: With more foreign aid and investment, China can impose a stricter target to slow the growth in its greenhouse gas emissions, said Nobuo Tanaka, executive director of the International Energy Agency.
“Based on our analysis, projects currently planned in China, such as energy conservation and the introduction of more renewable energy, would slash the country’s carbon intensity by 47 percent,” the head of the Paris-based energy research organization said in an interview………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Theaustralian.com.au: Demand for gas in the eastern states and South Australia is expected to grow fourfold over the next 20 years, as Queensland export projects start and the Rudd government’s emissions trading scheme drives gas-powered electricity generation at the expense of coal-fired power.

The growth will mean that Queensland will exceed its existing gas pipeline capacity by 2013, NSW in 2012 and Victoria between 2012 and 2015………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Theglobeandmail.com: Wall Street sees carbon trading and related derivative products as the next big thing in financial innovation. Critics say it’s the next big financial mess.

Carbon trading provides a way for companies to stimulate green energy and carbon reduction projects by financing them through the purchase of carbon credits………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Wallstreetpit.com: The hyper-rich club of oil exporters: Saudi Arabia, Kuwait, Bahrain and Qatar, all Arab states of the Gulf region that own almost 40% of the world’s total oil reserves and possess a combined GDP of $1.2 trillion, have agreed to launch a single currency modeled on the euro, hoping to displace the greenback as the pricing currency for oil.
The four nations said they will launch a Gulf Monetary Council in 2010 that will pave the way for a full-fledged regional central bank………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Etftrends.com: There are several gold-focused exchange traded funds (ETFs), but a new product recently filed with the Securities and Exchange Commission (SEC) could have the most interesting twist yet.

Sprott Asset Management is planning to introduce a new ETF called the Sprott Physical Gold Trust………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Nytimes.com: Authorities warned regulators globally against hitting the derivatives market with harsh measures such as requiring trading to take place on exchanges, citing their expertise through London’s dominance of the sector.

The Treasury and its financial watchdog the Financial Services Authority published a paper on Wednesday providing the UK perspective on discussions between regulators over the past several months, said David Lawton, head of the FSA’s market infrastructure and policy department………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Bloomberg: The U.K. pushed back on European Union and U.S. proposals to trade standardized derivatives on exchanges and clearing houses, saying that other steps can reduce risks to the financial system instead.

While the U.K. broadly supports EU and U.S. objectives, the Treasury and Financial Services Authority said in a report today that they have concerns that the proposals could concentrate risk………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From WSJ: U.S. stock futures rose on Wednesday, along with oil and other commodity prices, ahead of a statement from the Federal Reserve that’s expected to signal no major changes in monetary policy.

Futures on the Dow Jones Industrial Average gained 39 points to 10,437. S&P 500 futures rose 5.4 points to 1,109.30 and Nasdaq 100 futures added 10.5 points to 1,805.50………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Reuters: Deutsche Bank has emerged as a key bidder for commodities trading company RBS Sempra, the Financial Times reported on Thursday.
Part-nationalised Royal Bank of Scotland said in November it was selling its 51 percent stake in the firm, which it jointly owns with Sempra Energy, as part of a deal to lighten the bank’s risk in exchange for government aid………………………………..Full Article: Source

Posted on 17 December 2009 by VRS |  Email |Print

From Bloomberg: Cocoa futures jumped, extending a rally to a 30-year high, as funds stepped up buying and the dollar’s decline enhanced the investment allure of commodities. Coffee reached the highest level since August 2008.

Hedge-fund managers and other large speculators have quadrupled their bets on rising cocoa prices since late May, according to U.S. Commodity Futures Trading Commission data………………………………..Full Article: Source

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