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Commodities Briefing 08.Oct 2010

Posted on 08 October 2010 by VRS |  Email |Print

From Reuters: Commodities could extend a rally that has lifted prices more than 10 percent since late August, if central banks pump billions more dollars into the global economy to prop up the sputtering recovery.
Raw materials prices surged after U.S. Federal Reserve Chairman Ben Bernanke said on August 27 the Fed was prepared to use “unconventional” policies such as buying more long-term securities to drive down interest rates, if necessary……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Seekingalpha.com: Commodities have been popular with investors for many years. But it may be time for caution, suggests Tony Boeckh in his book, The Great Reflation. Bull markets always face “a huge headwind.” Large price increases do not lead to rising prices over the long term, he warns.
His main points: Studies show real prices for commodities decline over the long run; “over the past 210 years, industrial commodities, adjusted for inflation, have fallen about 70%.”………………………………………Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Smallcapinvestor.com: When investors think of ways to play a strengthening market in commodities, many tend to think of shipping stocks as a way to generate big gains from high-beta stocks. Right now, that might not be a bad idea.
The PowerShares DB Commodity Index tracks a wide range of commodity prices and as the chart below shows, it’s up 14 percent since June 1st. ………………………………………Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Emirates247.com: Spot gold prices hit a fresh record of $1,362.58/oz this morning, the ninth record in ten sessions for the yellow metal. The shiny metal continued breaching new high records for the third consecutive session taking advantage of concerns surrounding global recovery, which raise speculations that central banks around the world will add to stimulus to bolster growth.
Demand from Asia, especially India amidst festival season that started in September and will end in November, is expected to keep prices buoyed up……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Livemint.com: Central banks are expected to be net buyers of gold in 2011 for the first time in nearly two decades, the World Gold Council said on Thursday. “For next year, we will probably see a scenario where central banks are net buyers (of gold) for the first time in something like 17 years,” Marcus Grubb, the WGC’s managing director for investment, told delegates at the World Gold Investment Congress in London.
He said central banks had been net buyers of 7.7 tonnes of gold in the second quarter of 2010. Before 2009, they were net sellers of an average of 400 tonnes per year……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Resourceinvestor.com: Five years ago, a big investment house like Merrill Lynch would have scarcely thought to mention gold. But in 2010, the yellow metal is a hot topic.
A September report on gold from Merrill is much in the news today. The research piece is titled “Global Gold M&A Heats Up”, and details the bank’s suspicions that major gold producers are on the hunt for acquisitions……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Moneymorning.com: The world’s wealthiest people are moving their money out of stocks and into gold bullion, sucking the yellow metal up by the ton in some instances.
Fears that the dollar will continue to lose value in the wake of the U.S. Federal Reserve’s quantitative easing have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds (ETFs), UBS AG executive Josef Stadler told the Reuters Global Private Banking Summit……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Mineweb.co.za: It is a gold rush the likes of which the country has not witnessed in a long time. Fears of double dip recession in the US and the subsequent global fallout of such an event has caused high net-worth individuals in India thronging to precious metal counters.
“The way this class (read wealthy investors) responds to a fear situation is by buying bars and kilos of gold,” said A L Adjaniawala, precious metals analyst at KJMC Capital, a Mumbai-based research firm……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Hardassetsinvestor.com: The risk trade is on again. You can tell that by watching the Gold Miners Ratio, a fraction that compares the relative weight of the Market Vectors Gold Miners ETF to its younger sibling, the Market Vectors Junior Gold Miners ETF.
The “senior” fund comprises 30 established gold producers, while the “junior” portfolio includes 60 issuers, mostly companies engaged in the exploration and development of gold properties……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Resourceinvestor.com: Precious metals have risen to new highs on deepening concerns about the US economy and the growing risk of currency devaluations internationally. Gold reached new nominal record highs at $1,364.77 per ounce and silver reached new 30 year record nominal highs at $23.52/oz.
While gold has been grabbing some headlines recently, especially in the financial media, poor man’s gold silver remains the “ugly sister” and is rarely covered in the financial media and almost never in the mainstream press and media……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Mineweb.co.za: Europe’s demand for copper products is expected to rise by 18-20 percent in 2010 and return to pre-crisis levels in 2012, said a senior executive at KME Group, a leading maker of copper and copper alloy products.
Consumption of copper products, widely used in construction, power and automotive industries, rose about 20 percent in the first six months of this year in Europe after a 25-30 percent drop in crisis-hit 2009, KME’s Domenico Cova told Reuters……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Globaltimes.cn: Premier Wen Jiabao responded to allegations the nation is blocking the exports of rare earth metals to Japan saying, “China has not and will not obstruct the trade of rare earths.”
China will ensure a sustainable supply of the resources, while still controlling the output, Wen said at the sixth China-EU Business Summit Wednesday in Brussels. China will not use rare earths as a bargaining tool, Wen said……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Economist.com: The 50th birthday of OPEC in September was accompanied by few celebrations—although philatelists salivating at the prospect of the commemorative stamps issued by the 12 countries in the oil cartel may have held private parties.
Members, always mindful that not everyone is happy with their sway over oil markets, may yet permit themselves some backslapping at a gala dinner at OPEC’s next meeting on October 14th. An organisation dedicated to “the stabilisation of oil markets” and “a steady income to producers” has done a decent job of late……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Reuters: Robust oil prices might induce OPEC to pump more, helping to calm a rising market and limit damage to a fragile economy, but the producer club is unlikely to agree a formal change in output when it meets in Vienna next week.
The 12-member Organization of the Petroleum Exporting Countries has not officially changed production policy since December 2008. It then reacted to a price crash and a recession, which crushed fuel demand, by announcing its deepest ever supply cut……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Tradearabia.com: Gulf Arab oil ministers will meet in Kuwait on Sunday to discuss crude output policy ahead of an Opec meeting to decide production levels in Vienna next week.
The ministers from leading exporter Saudi Arabia as well as from the UAE, Kuwait and Qatar typically meet to discuss the Gulf perspective on oil output policy ahead of full Opec meetings……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Cri.cn: September was a busy month for the Tianjin Climate Exchange, as it secured three deals including one offsetting the emmissions of a high-profile international forum recently held in the city. The exchange has brokered a total of six carbon deals since its establishment in 2008.
“Compared with the first two years, we have seen big changes this year,” said Mu Lingling, the exchange’s vice president, at the sidelines of the fourth round of the ongoing United Nations climate talks from Oct. 4 to 9……………………………………….Full Article: Source

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From Barrons.com: Funds that rely on buying futures contracts to track commodities are underperforming similar actively managed mutual funds, according to Stan Luxenberg.
In a column for TheStreet.com, the former executive editor at Individual Investor magazine compares actively managed commodity mutual funds to their ETF counterparts……………………………………….Full Article: Source

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From Benzinga.com: What a run for commodities. Throw the names of all the major and even obscure hard assets into a hat and chances are you would’ve picked a lot more winners than losers this year.
Metals have shined. Coffee and sugar have gotten investors excited and that’s without direct consumption of those products. Wheat, cotton, corn, all bullish in a big a way……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Etfdb.com: As the ETF world has surged ahead in recent years, perhaps no corner of the industry has generated as much interest as the commodity space. The introduction and proliferation of exchange-traded commodity products has granted many investors access to a section of the investable universe that was previously beyond their reach.
The democratization of an asset class with the potential to add valuable diversification benefits to traditional stock-and-bond portfolios has been met with open arms–and open wallets. Inflows to commodity ETFs topped $30 billion in 2009, and the cash flows have remained strong for much of this year as well……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Thehindu.com: NCDEX, a leading agri-commodity exchange, is witnessing a big rise in the average daily trading volume (ADTV) of non-agricultural commodities, led by steel and crude oil contracts.
Addressing presspersons here on Thursday, R. Ramaseshan, Managing Director and CEO, said the ADTV for crude had risen to Rs. 277 crore in September from Rs. 6.57 crore in April……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Reuters: The U.S. futures regulator said on Thursday it would look at whether new regulations could help prevent market disruption from high-frequency algorithmic trading in the wake of the May 6 “flash crash.”
The Commodity Futures Trading Commission has new powers in a Wall Street reform law to tackle attempts to manipulate or disrupt markets, and plans to look at high-frequency traders’ role in the equities plunge as it crafts new rules……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Bloomberg: JPMorgan Chase & Co., the second- largest U.S. bank by assets, agreed to buy the North American natural-gas and power-trading book from a joint venture between Royal Bank of Scotland Group Plc and Sempra Energy for about $220 million.
The sale, which requires regulatory approval from the Federal Energy Regulatory Commission, completes the divestiture of the last of the principle assets of the venture, San Diego- based Sempra said in a statement today……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Benzinga.com: The U.S. dollar hit 15-year lows against the Japanese Yen Thursday, after data on U.S. unemployment benefits did little to reduce expectations that the Federal Reserve will resort to more quantitative easing.
Elsewhere, the dollar slipped to an all-time low against the Swiss Franc while the Australian dollar surged to a 27-year high against the greenback……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Guardian: The World Bank warned today that a full-scale currency war risked a return to the protectionism of the 1930s amid fears that growing tension between Washington and Beijing will hinder the global economy’s recovery from its deepest post-war slump.
Concerns that this weekend’s annual meetings of the Bank and the International Monetary Fund will see an escalation of the war of words between the US and China over the level of the yuan sent the dollar to an eight-month low against the euro today……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From BBC: Global currency wars pose “a real threat” to economic recovery, the head of the International Monetary Fund, Dominique Strauss-Kahn, has warned.
In an interview with the BBC, he said currency disputes showed countries were not co-operating as well as they had during the financial crisis……………………………………….Full Article: Source

Posted on 08 October 2010 by VRS |  Email |Print

From Danielstrading.com: Financial markets were consumed this week with talk of quantitative easing - the prospect that the Federal Reserve will buy assets to pump liquidity into the economy and stimulate economic recovery. Also called monetary stimulus, QE is often thought of as “priming the pump.”
Once the money is injected, the theory goes, it will drive more lending and more spending, and thus, more economic activity……………………………………….Full Article: Source

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