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Commodities Briefing 13.Oct 2010

Posted on 13 October 2010 by VRS |  Email |Print

From Theage.com.au: Bubbles could be building in gold and commodities, emerging markets and resources shares. Low interest rates in much of the developed world are probably helping to create more asset bubbles, says the chief economist at AMP Capital Investors, Shane Oliver.
However, Oliver says valuations of these markets suggest we are only in the start of the next bubble, which probably has years to run with opportunities for investors in the meantime……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Theaustralian.com.au: Worried that the China resources story may not have legs and will blow up with a bang that wrecks your investment plans? Not sure that emerging markets are undervalued, now everyone has ploughed into them? Then investing in soft commodities — agriculture and food — could be the answer for you.
That’s the message from Joanna Davison, a managing director of Colonial First State Global Asset Management, which is one of several fund managers to spruik the virtues of investing in food……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Investorschronicle.co.uk: In keeping with the global march upwards in commodities prices, soft commodities prices have spiked after markets were spooked by a US Department of Agriculture (USDA) report which slashed forecasts of global grain stocks.
The USDA said grain supplies were “expected to fall dramatically” with stocks of coarse grain in the US and European Union likely to halve and corn stocks in the US also likely to halve. Weather problems and natural disasters such as the central Asian wildfires have hit northern hemisphere production hard……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Nasdaq.com: Commodities can have great trends and represent a diversification alternative for longer term profit opportunities. However, very few individual investors are willing to trade futures, which is traditionally how traders get access to that market.
There are some excellent low cost alternatives to futures but which method is best really depends on what your investing objectives are……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From The West Australian: Investors looking for exposure to gold have three options: buy gold stocks, buy actual gold or invest in a gold exchange traded fund (ETF), which holds physical stocks and tracks movements in price. More popular overseas, ETFs have been slower to find a following in Australia. But that is changing, according to ETF Securities Asia Pacific head of sales Nigel Phelan.
“Investors are using ETFs a lot more,” he said. “Ever since the global financial crisis took hold people obviously want the surety of having a physical asset……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Forbes.com: Any psychoanalyst looking at the behavior of investors today would see clear strains of schizophrenia in a comparison between the markets for gold and US Treasuries. Currently, the 10-year Treasury yield is setting new lows on a daily basis.
In the financial models all economists were taught at school, this would be an indication of an economy with low inflation expectations and a strong currency. But the dollar has fallen over 12% since June, and the price of gold continues to hit all-time highs. These results are completely antithetical……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Kitco News: Goldman Sachs has raised its 12-month forecast for gold to $1,650 an ounce, citing expectations for further quantitative easing in the U.S. and prospects for long-term interest rates to continue falling.
“With U.S. real interest rates pushing lower off the slowdown in the pace of the U.S. economic recovery and the growing prospect of another round of quantitative easing, we expect gold prices to continue to climb,” said the Goldman report, authored by David Greely and Damien Courvalin……………………………………….Full Article: Source

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From Resourceinvestor.com: Taking into account 11 key measurements based on historical movements and price ratios, gold is likely to exceed $5,000 and silver is likely to exceed $200 within the next five years. If silver reverts to its historical ratio of 16 to 1 with gold, then it could rise even higher.
In recent weeks gold and silver have broken through their multi-month consolidation levels, and investors are wondering where the precious metals are headed. On a short term basis both gold and silver are overbought and due for a correction that may retest the breakout levels of $1,250 on gold and $20 on silver……………………………………….Full Article: Source

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From Resourceinvestor.com: Lately I’ve been seeing quite a few analysts calling for a top in gold. I have to say these analysts don’t really understand what’s happening. If they did they would know that far from topping, gold is just getting started.
Just as a preface let me point out that the fundamental driver of this leg up in gold is the same driver that it’s been for the entire 10-year bull market: currency debasement. Only now every country in the world is getting in on the race to the bottom. That being said it’s the dollar’s turn to collapse……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Bloomberg: Codelco, the world’s biggest copper producer, expects a “tighter” market for the metal next year because of continued demand from China and a lack of new supply.
“China is continuing to have a strong demand and from the supply side we have only a couple of new projects coming on- stream,” Codelco Chief Executive Officer Diego Hernandez said today in an interview in London……………………………………….Full Article: Source

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From Mineweb.co.za: Weighted market value averages suggest that, at this point in time at least, investors (and no doubt the odd speculator) are betting that listed copper stocks are likely to outperform gold counterparts. For example, Southern Copper, a big name, is on a rip.
The numbers, based on about 100 listed copper stocks, and hundreds of listed gold specialists, indicate that dollar gold bullion may have peaked, for now at least. There are bulls and bears, as usual, for any particular metal; such subjects are intensely canvassed on a daily basis……………………………………….Full Article: Source

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From Commodityonline.com: China is all set to drive the aluminium market once again with its imports set to go up around 25 times in the next four years. According to Harbor Intelligence, global leader in aluminium market forecast, said conditions like accelerating demand in China, stronger seasonality, a weakening US dollar, confidence in bullish territory and falling aluminum inventories will ensure a big bull run in aluminium market.
Prices should reach $2,400 per mton (110 cent/lb) before year end, it said. For next year, prices should average $2,527 per mton (115 cent/lb) and increase as high as $2,700 per mton (125 cent/lb) at some point in the first half of the year……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Mineweb.co.za: Credit Agricole CIB has upgraded all its industrial metals price forecasts for next year, citing a weak dollar and positive impact of further quantitative easing in the United States.
The bank’s price forecast for copper next year is $8,725 a tonne from $7,200 in July, aluminium at $2,450 from $2,350, lead at $2,544 from $2,500, tin at $25,000 versus $20,500, nickel at $24,500 from $23,500, and zinc unchanged at $2,475……………………………………….Full Article: Source

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From AFP: OPEC hiked its forecast for world oil demand growth on Tuesday ahead of its output meeting here and after the cartel’s most influential member Saudi Arabia expressed satisfaction with current prices.
The Organization of Petroleum Exporting Countries raised its demand growth estimate for 2010 from 1.2 to around 1.3 percent and held steady its forecast for next year, as the cartel that pumps 40 percent of crude oil prepares for its meeting on Thursday……………………………………….Full Article: Source

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From WSJ: The moratorium may be over, but oil companies will still have to wait before they can resume deepwater oil and gas drilling in the Gulf.
How long, industry and government officials say, will depend on how quickly the industry can implement a raft of new safety and environmental requirements, and how long federal regulators take to confirm that companies’ operations have reached the new, higher standards……………………………………….Full Article: Source

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From AP: Libya’s de facto oil minister says there’s no need to change oil quotas at this week’s meeting of the Organization of Petroleum Exporting Countries.
Shukri Ghanem, the head of Libya’s National Oil Corp., said at an international oil conference in London on Tuesday that oil stocks are well above historic levels……………………………………….Full Article: Source

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From Evwind.es: Wind energy could meet 12% of global power demand by 2020, and up to 22% by 2030, according to a study published today by the Global Wind Energy Council and Greenpeace International.
The ‘Global Wind Energy Outlook 2010’ (GWEO 2010) (1) finds that wind power could play a key role in satisfying the world’s increasing power demand, while at the same time achieving major greenhouse gas emissions reductions……………………………………….Full Article: Source

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From Nytimes.com: Carbon credit trading has long been decried by some climate change experts as an ineffective way to combat global warming, compared with imposing regulatory limits on polluting greenhouse gas emissions.
But after more than a decade of negotiations, the Kyoto Protocol established a carbon emission credit system, in 2006, overseen by the United Nations. Known as the Clean Development Mechanism, or C.D.M., it allows companies in industrialized countries to sponsor a greenhouse gas emissions-reducing project in a developing country……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Reuters: UK-based ETF Securities said it would launch exchange-traded products for base metals, as it seeks to tap into a global market worth nearly $120 billion (75.6 billion pounds) that has been dominated by investment in gold.
The new products will include copper, aluminium, zinc, nickel, lead and tin as well as a basket of all six major base metals, although no launch date has yet been set……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Bloomberg: Hedge funds received net deposits in August of $11.3 billion, the largest since February, as investors increased their appetite for risk, according to TrimTabs Investment Research and BarclayHedge Ltd.
Emerging-market, fixed-income and macro funds, whose managers seek to profit from global themes or trends, took in the most cash, the research firms said today in a report. Emerging-market funds received $2.5 billion, fixed-income funds got $2.3 billion and the macro category took in $2.1 billion……………………………………….Full Article: Source

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From Bloomberg: The top U.S. commodity regulator will review algorithmic trading and other practices such as “spoofing” and “quote stuffing” as part of the largest rewrite of Wall Street rules since the 1930s.
The Dodd-Frank financial legislation may make it easier for the Commodity Futures Trading Commission to punish manipulation and disruptive trading in markets for commodities such as oil, wheat and natural gas……………………………………….Full Article: Source

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From Dow Jones: Quantitative easing in the U.S. and foreign exchange interventions by various countries to limit the rise of their currencies, a situation many have likened to a “currency war,” could create a new wave of global asset bubbles and inflation, the China Securities Journal argued Tuesday in a front-page editorial.
Quantitative easing will trigger a new round of asset price rises, and continued U.S. dollar depreciation will result in higher resource prices, the paper said. Rising prices for staple goods are already causing imported inflation pressures for developing markets, it added……………………………………….Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From Indiatimes.com: European Central Bank President Jean-Claude Trichet on Tuesday urged the world’s major economies to avoid a race to devalue their currencies, saying this would hurt a still-fragile financial system.
Asked if the ECB would react to any further monetary easing from other major central banks, Trichet said he would ascertain what impact such measures had on the European economy before making any decisions. “I never take, on behalf of the governing council, any precommitments. I only say we will do whatever is necessary,” Trichet said………………………………………Full Article: Source

Posted on 13 October 2010 by VRS |  Email |Print

From FT Alphaville: We’ve already posted about how investors are front-running the Fed, which is to be expected, but have they gotten ahead of themselves as well?
In agreement with those queasy Barcap analysts, economist James Hamilton thinks the market is already pricing in a huge amount of extra asset purchases (emphasis ours):………………………………………Full Article: Source

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