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Commodities Briefing 18.Dec 2009

Posted on 18 December 2009 by VRS |  Email |Print

From Businessweek.com: They could be a smart inflation hedge in 2010. And some pros see a long-term bull market for oil, grain, and gold
Oil, gold, corn, wheat—perhaps the most attractive thing about commodities is they seem so concrete. Investors know that a barrel of oil may be worth more or less at the end of the day, but it will never disappear. In an age when major financial institutions can go bust overnight, that holds a lot of appeal………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Reuters: Banks are boosting their commodities staff to take advantage of the upswing in prices this year and greater risk appetite among investors.
Deutsche Bank is interested in bidding for RBS Sempra as part of its plan to beef up in commodities, a person familiar with the situation said on Thursday………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Asiamoney.com: After what has been a nine-month rally, gold and oil prices are expected to trade in a narrow range over the next few months, while copper is forecast to fall 15%, according to hedge fund manager David Bensimon.

Commodities have had a nine-month rally since March and should enter a consolidation phase. “It’s perfectly normal that the rally has run out of steam and the markets need time to digest these gains,” says Bensimon, who runs Polarcap Prosperity in Singapore………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Tradefinancemagazine.com: Commodity trade banks have had to face a range of difficult issues and circumstances through the course of the global economic crisis.
Now though, with some lessons learned and certain sectors growing stronger, the traditional players are eyeing the changed scene and new opportunities. Michele Martensen assesses the market………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From WSJ: Bidders for RBS Sempra Commodities, a joint business between Royal Bank of Scotland Group PLC and Sempra Energy, have been narrowed to five, including Deutsche Bank AG, a person familiar with the situation said Thursday.

“There has been a lot of interest in the business, and at this point bidders have been narrowed down to five, from about 20,” the person said, adding the goal was to sell “as soon as possible.”……………………………….Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Investmentnews.com: Mutual funds could invest directly in commodities under legislation introduced Wednesday by House Ways and Means Committee Chairman Charles Rangel, D-N.Y., and Select Revenue Measures Subcommittee Chairman Richard Neal, D-Mass.
The Regulated Investment Company Modernization Act of 2009 (HR 4337) includes a number of provisions to update the tax laws that apply to mutual funds. The rules have been changed little since the 1930s………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Tradefinancemagazine.com: Some of commodity finance’s biggest players sum up their outlook for the commodity/natural resource financing space for 2010 and beyond.
Federico Turegano, Société Générale, Paris: “I don’t think the recovery is going to be identical in every part of the world. And I think that what works in one market may not necessarily apply to another so I would encourage financial institutions to keep a level of discipline and rigour in the way we price risk and structure transactions going forward.”……………………………….Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Bloomberg: New Finance Capital LLP’s Opus Commodities Fund managed by David Mooney topped the performance ranking of 45 funds of commodity hedge funds surveyed by Feri Institutional Advisors GmbH, an investment adviser.

The Opus fund returned 15.7 percent in the 12 months to October, according to Bad Homburg, Germany-based Feri………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Business24-7.ae: De-hedging by gold producers has emerged as one of the prime reasons for the rise in gold prices, analysts said. A total of 105 tonnes of gold was de-hedged by producers in the third quarter of 2009 and it played a tremendous in raising the price of gold by nearly $50 an ounce.
Though the volume of gold de-hedged – primarily by companies like global miner Anglo Gold Ashanti and Canadian miner Barrick Gold – in the final quarter of 2009 is expected to be large, no data in this regards is available as yet………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Mineweb.com: Melek said the bull case for gold could reach a peak annual price of US$1,500 per ounce. Meanwhile, Melek forecasts that silver and PGMs should outperform gold “because demand for these materials will grow as investors buy them to hedge against the U.S. dollar and inflation (like gold); as jewellery demand recovers and as producers use them in manufacturing.
Supplies are unlikely to grow much in the short term due to production cuts on the mine side and a relatively high currency in producing countries.”……………………………….Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Commodityonline.com: In 1705, John Law submitted a proposal to the Scottish Parliament that a new bank be set up that issued interest bearing notes to replace gold and silver coins as currency. He believed that public confidence alone was the basis of public credit and would allow bank notes to replace gold.

As he told a friend “I have discovered the secret of the philosopher’ stone; it is to make gold out of paper.” ……………………………….Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Commodityonline.com: Nowadays, there’s a multitude of speculators who are engaging in the US-dollar carry trade, all betting that they’ll reach the exit door first, before the clock strikes midnight, - or when the Fed begins to tighten liquidity.
However, recent signs that the US-economy is rebounding from its two-year slump, at a much faster pace than expected, has widened the US-Treasury’s yield curve to its steepest level in more than two-decades, a sure sign, that Fed rates won’t stay pegged near zero percent much longer, and that higher interest rates lie ahead in 2010………………………………..Full Article: Source

Posted on 18 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 above $1,120 an ounce as the dollar strengthened in response to better than expected U.S. economic data and upbeat comments from the Fed on the economic outlook………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Copper is up nearly 130 percent since the beginning of the year—not a bad run, especially given the sluggish pace of the economic recovery.

In some ways, copper has risen on a warm thermal of hope and prayer—the expectation of economic recovery, rather than recovery itself………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From WSJ: Copper prices will likely continue their recovery in 2010 as the global economic mends, but they will face some head winds later if the Federal Reserve raises interest rates as expected later in the year, and that in turn boosts the U.S. dollar.

While all commodities will be affected by economic conditions, copper is especially sensitive because the metal is widely used in industrial applications such as construction, electronics and automobiles………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Seekingalpha.com: So if the Chinese really are saving the world and buying up all of those ’scarce’ base metals, then presumably the mining companies would know about it?

Well according to Statistic Canada they didn’t know China existed as of September 2009………………………………..Full Article: Source

Posted on 18 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 18 December 2009 by VRS |  Email |Print

From Businessspectator.com.au: OPEC oil exporters will agree next week to keep production levels unchanged, analysts polled by Reuters unanimously said on Thursday, as prices above $US70 a barrel are more than comfortable for the group.

The 15 analysts asked by Reuters predicted the Organization of the Petroleum Exporting Countries would maintain its output targets and stress again the need for tighter compliance with existing quotas when they meet in Luanda on December 22………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From BBC: GE Power is one of the world’s biggest makers of power-generating machinery like turbines that transform gas, steam, wind, sun or moving water into electricity in 120 countries.

It has just signed a $1.4bn contract to supply wind turbines for a wind farm in Oregon that will generate enough electricity for 235,000 homes………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Farmonline.com.au: A pair of Senators may have stirred the waters around cap-and-trade when they unveiled an alternative climate change measure on Friday.

The measure is intended as an alternative to cap-and-trade legislation. Senators Maria Cantwell, D-Wash., and Susan Collins, R-Maine, are among a group of moderate lawmakers who like the idea of capping carbon emissions but are opposed to creating a new financial market for trading emissions permits………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Commodities-now.com: As many of the world’s leaders arrive in Copenhagen to try to seal a climate deal, the signals emerging regarding progress from COP15 are mixed.

Yesterday, the negotiating process was subject to an “unexpected stop,” according to Yvo de Boer, the United Nation’s top climate official and it has indeed been a week of stops and starts as even on Monday, informal talks between the COP15 presidency and developing countries ended a daylong boycott of negotiations, which was apparently caused by controversy over the Kyoto Protocol………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Etfdb.com: Commodity ETFs have seen billions of dollars of cash inflows in recent years, as investors have embraced these exchange-traded products as efficient ways to gain exposure to an asset class that was previously off limits to many.
The majority of investors have focused either on funds offering diversified exposure to a variety of natural resources (such as DJCI or DBC) or on single-commodity funds investing in either precious metals or oil and gas………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Forbes: Some purists don’t like gold exchange-traded funds because they prefer to own, or at least to have claim to, a guarded, secured and insured physical commodity.
For them gold is the ultimate store of value, after all, and paper money only had meaning when it could be exchanged for metal in one form or another………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Theglobeandmail.com: These ETF picks will help you track higher precious metals’ prices or miners that benefit from them
If you think gold prices will keep rising, these are the must-buy gold and silver ETFs……………………………….Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Marketwatch.com: Individuals who believe the value of the U.S. dollar is on a long-term decline are increasingly backing up those beliefs with investments designed to gain when the greenback tumbles.

Funds flowing into currency-based exchange-traded funds last month doubled the inflows this year, while trading in the most popular currency index futures has increased fivefold in the last year, Morningstar and exchange data show………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Smartmoney.com: Stocks dropped sharply on Thursday after jobless claims increased and the government scrapped plans to sell off stock in Citigroup indicating that the path to recovery will remain balky. Investors backed off and took most exchange-traded funds down as they did.

In Washington, a Senate panel lent its support to Ben Bernanke for a second term as Federal Reserve chairman, news that triggered mixed reactions………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From Managementtoday.co.uk: A new Arab monetary union, modelled on Europe, could give birth to an important new currency.

Interesting news from the Gulf, where four oil-rich Arab states have just entered a ‘monetary union pact’; this will lead to the creation of a central bank for the region and a new currency modelled on the Euro – dubbed, with startling originality, the ‘Gulfo’………………………………..Full Article: Source

Posted on 18 December 2009 by VRS |  Email |Print

From WSJ: Commodities prices fell almost across the board as a sharp jump in the U.S. dollar heightened concerns that key drivers of the big rallies lately for products from cotton to gold could be faltering.

Commodities have generally benefited in recent months from dollar weakness, which has made the products more affordable for investors using other currencies………………………………..Full Article: Source

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