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Commodities Briefing 12.Oct 2010

Posted on 12 October 2010 by VRS |  Email |Print

From Bloomberg: Commodities rose to the highest in two years, led by agriculture futures, after a U.S. Department of Agriculture report last week showed corn production in the country would decline more than expected by analysts.
The Standard & Poor’s GSCI Index of 24 raw materials rose as much as 1.3 percent to 571.4810, the highest level since Oct. 3, 2008. The UBS Bloomberg Constant Maturity Commodity Index climbed to 1,490.731, the highest since Aug. 27, 2008. Corn futures gained as much as 8.5 percent and soybeans jumped to a 16-month high……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From WSJ: Commodity prices are on the move again. Will the result be the same as when they soared, back in 2008? For those who don’t remember, commodity prices, but especially oil took off. Crude prices tacked on around $50 between the start of 2008 and their peak in July at over $145 a barrel.
OK, so this time oil prices are being relatively well behaved, only gaining around $10 a barrel to some $85 over the past couple of months. But the real momentum right now is in food prices……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Commodityonline.com: If you thought gold prices will continue its bull run for years to come, you may take note of an investment bank’s advice. Natixis, French investment bank, said gold prices will likely decline slowly in 2011 as the global economy continues to recover and investors turn to other asset classes for better returns.
Record high gold prices have spurred new gold mine production and scrap gold sales, and have reduced consumer appetite for gold jewelry, leaving gold reliant upon investors to sustain the rally……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Seekingalpha.com: From a technical analysis perspective, there has never been a better time to own or purchase gold. Every tradable asset has what is known as support and resistance. Support is the value by which any asset is assumed safe for buying. This is determined by previous price levels.
When prices reach this level more buyers than sellers step into the market. In the latest leg of the gold bull market, $1,000 has been established as the new floor……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Resourceinvestor.com: After the violent moves in the gold market last week which took it to another all time high of $1,363, and then a wrenching $25 pull back in a matter of hours, many traders are left grasping for an intelligent way to deal with the barbarous relic. Those who were too clever by half and traded out of the yellow metal early are now trying to buy it back on any dip, driving it relentlessly higher.
The gold bugs who read this letter will not be surprised to hear that the Van Eck International Investor’s Gold Fund (INIVX) has been the top performing US mutual fund for the past five years, with an annual 27% return……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Mineweb.co.za: Citi Investment has forecast a consolidation in the LME copper price as Chinese copper imports decline over the next couple of months due to very high copper prices. “Short term upside for base metals may be limited,” Citi advised, “but we expect gains for most of them in the medium term. Aluminum and copper are our favorites.”
Citi also revised its short and medium-term forecasts for gold to $1,450/oz. However, Citi analysts suggested that medium term, “silver could outperform gold if global industrial production keeps recovering.”………………………………………Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Hardassetsinvestor.com: As of Thursday last week, Copper was up 194% since hitting bottom after the crash,and up 14% in the past 6 weeks alone. We haven’t seen prices like this since the end of April. Should investors be paying attention?
Copper supply and demand are never perfectly counter-correlated, but the reality this time seems to be clearer than normal. Copper supply has been getting tighter in the past few months, with copper inventories dropping to recent lows……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Commodityonline.com: Even as French investment bank Natixis predicted that the gold prices will fall in 2011, it is bullish on platinum and palladium. According to the bank’s forecast, platinum and palladium prices are expected to average $1,650/oz and $520/oz respectively in 2011.
Growing automotive sales in developing economies will underpin demand for the metals, used in autocatalysts to clean exhaust emissions, the bank said……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Bloomberg: Aluminum is most likely to be the first industrial metal used to back an exchange-traded product in a market where $100 billion has already been invested in precious-metal funds, a survey of analysts showed.
Aluminum was the top candidate for 14 of 16 analysts and traders surveyed by Bloomberg. More of it is produced than all other non-ferrous metals combined. Tin was the least likely because it has the smallest stockpiles……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Mineweb.co.za: In the short term, both precious and base metals are likely to go up but, both markets can’t continue to rise in unison. This is the view expressed in Natixis’s Fourth Quarter Metals review.
The group points out that “On the one hand, investors are still seeking a safe haven store of value to protect themselves from potential currency debasement as the US, UK and Japanese central banks all contemplate a resumption of unorthodox monetary policies and, as the Brazilian finance minister Guido Mantega pointed out, the world is facing ‘an international trade war’ as countries attempt to benefit from currency depreciation……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Cpifinancial.net: Base metal prices have rallied strongly during the third quarter, with copper prices breaking through $8,300/tonne. While all metals have registered strong gains almost irrespective of the fundamentals, Natixis Commodity Markets concludes in its latest Quarterly Review that there is still upside potential over the next twelve months.
Base metal prices have benefited from a swift rebound in demand from the exceptionally low levels experienced in 2009……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Brisbanetimes.com.au: Australia needs capital to support its biggest mining expansion in more than 150 years, while other countries grapple with unemployment, debt and sluggish growth, Treasurer Wayne Swan said.
”Australia is about to embark on its biggest mining investment boom since the 1850s Gold Rush,” Mr Swan said in the prepared text of a speech today at the New York Stock Exchange. ”This pushes us to pick up the pace of reform, to make Australia an even more attractive investment destination.”………………………………………Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From AFP: Saudi Oil Minister Ali al-Nuaimi said he was satisfied with the current price of oil and saw no reason to change output quotas, as he arrived in Vienna Monday for an OPEC meeting later this week.
“Am I comfortable with the price? Yes,” Nuaimi, the de-facto head of the Organisation of Petroleum Exporting Countries (OPEC), said……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Bloomberg: OPEC may leave oil production quotas unchanged when it meets Oct. 14 in Vienna after Saudi Arabian Oil Minister Ali al-Naimi described the market as “very well- balanced” between the interests of consumers and producers.
“Everyone is happy with the market,” al-Naimi said late yesterday when asked, as he arrived at his hotel, whether the Organization of Petroleum Exporting Countries should boost supplies this year. “Consumer, producer, everyone is happy.”………………………………………Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Reuters: Iran increased its estimated oil reserves on Monday to a level which would return it to third place in the world after Iraq said last week it had overtaken its neighbour.
Coming ahead of an OPEC meeting on Thursday, one analyst said the two countries were in a “bidding war” over reserves, which is usually a consideration including other criteria such as production capacity when it comes to allocating quotas……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From UPI: The International Energy Agency says governments aren’t doing enough to harness the full potential of energy efficiency.
The IEA, which advises rich countries on energy issues from its headquarters in Paris, said only 40 percent of the 25 energy efficiency policy recommendations it made in 2008 have been implemented……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From WSJ: Metals markets are about to get some insatiable new customers with the launch of exchange-traded funds that will target industrial resources like copper, aluminum and tin.
Like the $55 billion SPDR Gold Shares, these new funds will buy actual metal, creating a conundrum for markets where supplies are already struggling to meet the demands of China’s booming economy……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Peopledaily.com.cn: Tensions over currencies are set to continue through the month running up to the Seoul G20 summit. Officials and economists have said a stronger yuan is not a panacea for global imbalances, and too fast an appreciation may add uncertainty to the fragile global economic recovery.
China’s foreign exchange policy was a central discussion point at the International Monetary Fund’s annual meeting from Oct 8 until Oct 10. The United States took the lead in claiming that an “undervalued yuan” as the primary cause of global imbalances and in calling for a faster yuan revaluation……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From WSJ: South Korea leaders, who will host the next big global economic meeting, on Monday began pushing for new ideas to resolve the currency battles unfolding around the world. After little progress was made on currency issues at the International Monetary Fund’s annual meeting over the weekend, the turmoil threatens to overwhelm the agenda of the Group of 20 leaders’ summit in Seoul on Nov. 12.
South Korean officials worry that unless there is progress at the summit, other countries will decide the G-20 isn’t the right forum for dealing with critical global economic issues……………………………………….Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Dow Jones: This weekend’s aggressive airing of differences over China’s currency policy poses the biggest challenge yet to the Group of 20 developed and developing nations’ viability as an international forum.
That’s the view of both G-20 officials and outside observers attending the International Monetary Fund’s annual meetings………………………………………Full Article: Source

Posted on 12 October 2010 by VRS |  Email |Print

From Wallstreetpit.com: Commodity and international investments have a reputation for being risky. But once you get to know them, you might consider inviting them into your portfolio.
Roger Gibson, best-selling author of Asset Allocation: Balancing Financial Risk, joined us a few weeks ago to discuss portfolio construction and the benefits of diversification……………………………………….Full Article: Source

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