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Commodities Briefing 07.Oct 2010

Posted on 07 October 2010 by VRS |  Email |Print

From Smh.com.au: The International Monetary Fund says the boom in metal prices, which has driven a surge in Australian export income, may only be halfway through its growth spurt. In the fund’s biannual World Economic Outlook, published today, it shrugs aside recent commodity market jitters to state there are ”few convincing signs” that key metal supplies are catching up with demand.
After studying swings in global metal prices since 1850, the fund says the commodity boom that began earlier this decade is only about halfway through the average growth period of 20 years……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Cnbc.com: Global commodity markets are headed for a “significant correction” by year-end, warns Sailesh Jha, managing director, Asia macro strategy & sales at Jefferies Singapore. While the growth outlook for emerging markets is “looking pretty strong”, Jha highlights that in the next two-three months “data will soften and the tide will turn”.
The Reuters/Jefferies CRB Index of 19 commodities has advanced as much as 14 percent over the last 12 months……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Bloomberg: Commodities rose to the highest in almost two years on speculation central banks around the world will join the Bank of Japan in increasing purchases of government debt to boost economic recovery.
The Standard & Poor’s GSCI Index of 24 raw materials rose as much as 0.6 percent to 559.976, the highest level since Oct. 7, 2008, before paring gains. The UBS Bloomberg Constant Maturity Commodity Index climbed to 1,442.24, the highest since Aug. 29, 2008……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

Commodity markets rallied in September as investor sentiment turned positive amidst the prospects of further rounds of quantitative easing. A noticeable trend shift is taking place, suggesting fundamental supply and demand dynamics will take priority over macroeconomic indicators in determining prices over the long term.
Nelson Louie, Global Head of Commodities at Credit Suisse Asset Management said, “As reflected in Fed Chairman Ben Bernanke’s recent comments, subduing deflation will likely continue to be a top priority of the Federal Reserve over the near term, and as more quantitative easing takes place, we expect commodities prices will continue to rise. While macroeconomic factors have driven returns over recent history, we expect fundamental factors to drive prices moving forward over the longer term.”………………………………………Full Press Release: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Bullsource.com: By 2012, the US will be overdue for another recession, Rogers says. He points out that the government can’t quadruple its debt again. “We’re going to have a serious problem the next time we have a slowdown,” comments Rogers.
The investor believes a bubble is forming in the bond market. He is bullish on rice and sugar and still believes agriculture has a wonderful future for the next 5-15 years……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Reuters: Spot gold rallied to new records on Wednesday, eyeing the $1,350 level, as anticipation of further easing by the U.S. Federal Reserve eroded investor confidence in currencies, and renewed its safe-haven appeal.
“The trust in the FX markets and currencies in general is disappearing. Now with the dollar weakness, it’s strong support for gold, as is safe-haven buying which is mainly investment driven,” a Europe-based trader said……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Forbes: Devaluation! Volatility! Armed rebellion! There’s so much to worry about, and the fearmonger industry is there to help you cope with it all. The product for sale: gold bullion funds. The U.S.-registered ones hold $60 billion or so. No surprise, with the price of gold tripling in five years, that money is pouring in.
Gold is supposed to be an anchor of stability in uneasy times. Currencies can collapse, stock markets can crash, bonds can default, but that yellow stuff is there forever. And so you are expected to put some portion of your retirement assets, like 5% or 10%, in gold……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Qfinance.com: Writing about a volatile commodity price always runs the risk of having the markets make nonsense of anything one says by the time the piece is published. However, the awesome rise of the price of gold, which is on a 21 month tear and has been tumbling one record high after another since it went through $1290 on Wednesday 22 September, is worth commenting on in and of itself.
The explanations being given for this are many and various, mostly having to do either with the weakness in the US dollar (which boosts dollar denominated commodities like gold) or with investor disquiet in the face of mixed economic signals, or with some combination of the two. ………………………………………Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Mineweb.co.za: Record high gold prices are set to extend their rally in the next five years, as the United States struggles out of recession and confidence in paper currencies wanes, James Turk, founder of bullion dealer GoldMoney, said.
Turk said the prospect of persistently low U.S. interest rates and an increasingly soft dollar were set to drive prices up from their current high near $1,350 an ounce……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Mineweb.co.za: The old clichéd expression Onwards and Upwards certainly seems to describe the path of the gold price at the moment, and perhaps even more so for gold’s little sister, silver, both of which have been making minimally interrupted progress over the past weeks, months and even years.
The big question is how much further this can continue before a major correction occurs - and there will inevitably be a major correction at some time, but whether this will be in days, weeks or years is far from predictable. While the big money out there maintains a distrust in the forward growth of the major Western economies, perhaps belied by recent stock market rises, money may well continue to pile into precious metals……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Reuters: Platinum was tipped on Wednesday by two leading investment bank analysts to be among the strongest performing commodities in the coming months, while gold and crude oil were seen remaining firm.
Limited supplies and the potential for increasing demand from the manufacturing sector are seen supporting platinum prices, while the analysts warned of the potential for a significant setback for gold if real interest rates rise, although not seeing it as an imminent threat……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Commodityonline.com: Platinum Group Metals (PGMs) have been on a high in the recent past with the prices gaining on increased auto sales in China and India.
Platinum and palladium witnessed major gains in the past few weeks. Palladium, the precious metal used as a catalyst in converters that clean car exhausts, rose to 30-month peak of $581.50 an ounce last week. It has risen 45 per cent since May……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Ninemsn.com.au: The current era of higher prices and scarcity in base metals such as copper and tin could “continue for some time”, the International Monetary Fund said on Wednesday in an upbeat look at commodities.
The warning came as the price of tin hit a fresh all-time high, up nearly 60 per cent since January, copper rose to a two-year high and the cost of other metals such as nickel rose on the London Metal Exchange……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Seekingalpha.com: The domestic oil and gas sector has been under intense pressure to discover new resources and increase supply. A renewed emphasis on domestic, on-shore drilling has revitalized the industry from coast to coast in North America.
To add to the pressure, demand from developing nations will soon exceed even the wildest predictions of only a few years ago. China, India and Brazil will be three of the largest emerging economies set to impact the global supply of oil……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Bloomberg: Oil traded near a five-month high in New York after the dollar weakened against the euro and a government report showed a drop in U.S. gasoline stockpiles, bolstering optimism in an economic recovery.
Futures climbed 0.5 percent yesterday as the U.S. currency fell on speculation the Federal Reserve will act to revive the economy by buying bonds……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Ibtimes.com: Assets in U.S. listed Exchange-Traded Funds (ETF) and Exchange-Traded Notes (ETN) surpassed $900 billion for the first time, according to a recent data from National Stock Exchange, Inc. (NSX)
The assets in U.S. listed ETFs and ETNs stood at about $900.1 billion at September 2010 month-end, an increase of approximately 28 percent over September 2009 month-end when assets totaled $704.9 billion……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Reuters: Global policymakers clashed over exchange rates on Wednesday as Western leaders warned China and other emerging markets that simultaneous efforts to weaken their currencies could derail economic recovery.
Treasury Secretary Timothy Geithner said countries with large trade surpluses must let their currencies rise lest they trigger a devastating round of competitive devaluations……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From BBC: The Chinese Premier Wen Jiabao has warned the European Union against pressurising China on its currency policy. In a speech to top EU officials, Mr Wen said a big change in the value of the yuan could cause “social and economic turbulence” in China.
Earlier EU finance ministers joined the United States in calling for China to let the value of its currency rise……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Washingtonpost.com: The Obama administration is trying to escalate international pressure on China to change how it manages its currency, casting a global focus on what U.S. officials say has become a major risk to the economic recovery.
Calling the currency issue the “central existential challenge” facing the world economy, Treasury Secretary Timothy F. Geithner acknowledged that the administration’s effort to settle the one-on-one spat through quiet diplomacy had failed and marked a new phase in the struggle with Chinese officials……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Investorsoffshore.com: The Dubai Mercantile Exchange has announced that it has achieved the highest level of open interest for its benchmark Oman Crude Oil Futures Contract (DME Oman) since the commencement of trading on the Exchange on June 1, 2007.
As of September 30, open interest in the DME stood at 21,797 contracts. Open interest is the total number of outstanding futures contracts held by market participants and is regarded as a leading performance indicator in the industry. Open interest in DME Oman has increased steadily since launch: the previous total open interest record of 20,160 contracts was set in July 2010……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Fool.co.uk: Under the Kyoto protocol most of the developed world, with the notable exception of the US and Australia, agreed to cap their emissions of greenhouse gasses, allocating caps to individual emitters such as power generators.
The protocol recognised carbon trading, so if an emitter undershot its cap it could sell its surplus to one which exceeded its cap. The EU Emissions Trading System is the largest mechanism for trading such carbon credits — the right to emit one tonne of carbon dioxide or its equivalent……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Bloomberg: A European Union plan to use so- called benchmarks to limit the distribution of free carbon- dioxide allowances may put “upward pressure” on prices, according to Bloomberg New Energy Finance.
The preliminary proposal, disclosed yesterday in a draft from the EU regulator, doesn’t affect the overall cap for the eight-year period ending in 2020, said Konrad Hanschmidt, a London-based analyst at New Energy Finance……………………………………….Full Article: Source

Posted on 07 October 2010 by VRS |  Email |Print

From Latimes.com: Buoyed by its prudent fiscal policies and growing global demand for its commodities, Latin America will see solid economic growth in 2010 and 2011, according to new reports issued Wednesday by the World Bank and the International Monetary Fund.
The region generally has resisted the ripple effects of the global crisis better than more-developed nations, the institutions said at their joint annual meeting in Washington. That’s a marked contrast to past global crises that weighed heavily on Latin American economies……………………………………….Full Article: Source

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