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Commodities Briefing 18.Oct 2010

Posted on 18 October 2010 by VRS |  Email |Print

From Thisismoney.co.uk: The prospect of a global currency war, with sterling as a major casualty, has triggered a stampede of investors into commodities. With British and American central banks tipped to restart the money creation programme known as quantitative easing, smart operators have been abandoning paper currencies in favour of solid assets such as gold, copper and even corn and sugar.
Among major commodities, only cocoa has bucked the trend and seen a price decline this year. Others have shot up, with gold - traditionally seen as a substitute for paper money - rising in value by more than 25%……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Emirates247.com: Global markets, including commodities, continue to focus on the implications of the long awaited second round of quantitative easing from the US Federal Reserve. So far the expected introduction of QE2 has hammered the dollar against other currencies raising fears that it could have a destabilising effect on the global economy.
The dollar has lost more than ten per cent in value versus the euro in just one month with only one out of 45 global banks predicting such an aggressive weakening over such a short period of time……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From AFP: OPEC nations seeking higher oil prices to boost revenues may get their wish as the sliding dollar sees investment switch from the US currency and into crude and other commodities, according to analysts.
Yet higher commodity prices, which help to push up inflation, are also seen as a threat to the economic recovery. The Organization of Petroleum Exporting Countries, which pumps 40 percent of world oil, chose last week to keep its official production target unchanged at a ministerial meeting in Vienna, home to the cartel’s headquarters……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Emirates247.com: Strong oil prices boosted Opec’s crude export earnings by nearly $145 billion in the first nine months of 2010 and the income could end the year higher by around 30 per cent, official US figures showed on Saturday.
The 12-nation Organisation of Petroleum Exporting Countries, which pumps just under 40 per cent of the world’s oil supplies, earned about $547 billion in the first nine months of this year compared with nearly $402 billion in the first nine months of 2009, showed the figures by the Energy Information Administration (EIA) of the US Department of Energy……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Albawaba.com: Russia and Middle East energy businesses are embarking on new partnerships that will see joint investment projects in each other’s core energy activities. Badr Jafar, Executive Director of the Crescent Group of Companies, explains the active role being played by Crescent in this pioneering initiative.
Despite being the world’s two resource giants, with a combined 63% of world oil and gas reserves and 39% of world oil and gas production, Russia and the Middle East have until recently had a surprisingly weak commercial relationship……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Bi-me.com: 50 years ago, five oil-producing nations of the world met in Baghdad for a conference which led to the creation of OPEC. Five decades later, the 12 nation group is sitting on around three quarters of the world’s proven reserves.
Sheikh Zaki Yamani, former Saudi oil minister was made famous by being the face of the 1973 oil embargo and was also taken hostage by Carlos the Jackal. CNN’s Marketplace Middle East’s John Defterios sat down with the architect of Saudi Arabia’s energy policy in an exclusive interview, aired Friday, to discuss OPEC and its past 50 years……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Bloomberg: Hedge funds cut their bullish bets on natural gas to the lowest level this year as expanding stockpiles drove prices to a 13-month low.
The funds and other large speculators cut wagers on rising prices by 36 percent in the seven days ended Oct. 12, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the third week of declines, bringing the reduction since Sept. 21 to 71 percent……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Mineweb.com: Fed Chairman Ben Bernanke said he thought the current high unemployment and low inflation environment would linger into 2011 and as a result there is a “case for further action” on the monetary policy front.
Bernanke said the Fed might expand its holdings of longer-term securities. He also said that the Fed has little experience in judging the economic effects of more asset purchases. This tells us that we are stepping off into new territory. The same will be true of the rest of the world……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Business.in.com: Finally, gold went for its much anticipated and awaited date with the all-time high mark of $1,300 per ounce on September 24, 2010, albeit only for a fleeting moment. However, if you ask the Lalit Modis and Suresh Kalmadis of the world, whatever goes up, comes down (often) with a bang — the higher one goes, the harder can be the fall.
George Soros, the 79-year-old billionaire, calls gold’s spectacular nine-year bull rally the ultimate asset bubble. But, he has also helped drive up gold prices by doubling his bet on gold. He says that when interest rates are low, conditions are ripe for asset bubbles to develop, and they are developing at the moment. But, bubbles are good if you buy at the start rather than towards the end……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Seekingalpha.com: So long as the U.S. Federal Reserve intends to pump nearly a trillion more into the economy by buying Treasurys and filling the coffers of big banks, gold and its closely linked exchange traded fund, State Street’s GLD, has a good 10% upside.
We could see gold at $1,500 an ounce by year’s end from current prices of around $1,368 for the October gold futures contract on Friday……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Gulfnews.com: Bullion investors may be rightly impressed by silver’s outperformance of gold this year, but they would be well advised to be wary of seeing the precious metal purely as a cheaper proxy for its yellow cousin.
While gold has grabbed headlines this year with its rally to record highs above $1,385 (Dh5,086.41) an ounce, silver has quietly outpaced those gains. A $100 investment in silver on January 1 would now be worth around $146, versus a gold investment’s $126……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Sify.com: Diamond traders in Mumbai have geared up to have the world’s largest diamond market. The Bharat Diamond Bourse (BDB) is spread over 20 acres, with eight towers of nine storeys each, housing 2,500 offices in addition to the customs department, banks and other service providers who cater to the gems and jewellery trade.
An extra space of two million square feet has also been provided for auditoriums, theatres or trading halls. The BDB has been set up with an objective of establishing necessary infrastructure facilities for the promotion of the export of diamonds, and will provide support and service facilities to make India an international trading center for gems and jewellery……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Seekingalpha.com: This commodity is one of the most versatile on the planet. It can be used as a lubricant or a propellant — it’s even used as a coolant for nuclear reactors and in some medicines. It’s actually so widely used that I’d bet most people reading this are within arms reach of some of this metal.
The element is light enough to float on water. It’s also soft enough to be cut with a regular kitchen knife. Despite soaring demand, this commodity doesn’t trade on a major exchange. That hasn’t stopped its price from tripling between 2005 and 2009……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Bloomberg: China’s medium and heavy rare earths reserves may only last 15-20 years at the current rate of production needs, Chao Ning, section chief of foreign trade at the Ministry of Commerce, said.
“We can not rule out the possibility that China may need to rely on imports sometime in the future for these minerals, instead of supplying the world,” Chao said……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Theaustralian.com.au: Patersons Securities adviser Tony Locantro was telling his clients on Thursday not to be afraid of selling. He says it’s dotcom bubble deja vu all over again as the market booms.
“My phone conversations are similar to 1999 and 2007-08 before the GFC really hit,” he wrote to clients on Friday. “Yesterday I had to fight a client to get him to sell his Independence Group (IGO) at $7.10 that were purchased in the IPO at 20c. Again it proves that the lessons from the GFC have not been learnt.”………………………………………Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Bloomberg: China’s power restrictions “has been greater and is likely to be more long-lasting on aluminium than on steel,” Macquarie Group Ltd. said in a report.
Macquarie has a “positive view” on aluminum prices for the fourth quarter, according to the report dated Oct. 18. “However, any near-term strength in aluminium prices would encourage the quick ramp-up of new projects next year, once the pressure from Beijing eases.”………………………………………Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Ninemsn.com.au: The new wave of physically backed industrial metal exchange traded products, which seemingly loom large on the horizon, are unlikely to be welcomed by manufacturers, who would face increased competition for often tight supplies.
But it is far from clear that the impending innovation would be a great boon to investors either……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Commodityonline.com: Investment funds have dabbled in commodities for several years as prices boomed, but even more traditional-minded institutions such as pension funds are now dipping their toes in the water.
So far, these funds are allocating only a tiny portion of their portfolios to commodities, including gold. Still, this is enough money to contribute to rising prices, even if supply/demand fundamentals for some commodities, such as food items, do not always justify the rise……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Brecorder.com: A commodities and currency exchange will go live in Mauritius on Monday offering a local platform for investors worldwide eyeing Africa’s rich resources. The African continent is the world’s most impoverished region, but commodity-hungry economies such as China are increasingly eyeing investment opportunities.
“Mauritius is the gateway to Africa. We feel that in the next 30 to 40 years Africa will play a very important role in the financial life of the globe,” said Venkat Chary, chairman of the exchange, known as the Global Board of Trade (GBOT). The exchange will offer Mauritius rupee/US dollar, dollar/rand, euro/dollar, British pound/dollar and Japanese yen/dollar pairings……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Businessdailyafrica.com: The government should seriously rethink its strategies for revitalising agriculture. It is saddening that despite Kenya having an agro-based economy, has citizens who continue to experience food supply shortages.
The problem has led to high incidence of hunger, malnutrition and, in some extremes, starvation. While the efforts that have produced the Agricultural Sector Development Strategy are commendable, a lot needs to be done to revamp agricultural production and development……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Ibnlive.in.com: Indian Commodity Exchange (ICEX) is expected to launch iron ore futures contract by December after it receives permission from the market regulator Forward Markets Commission (FMC), a top exchange official said here.
“We are awaiting FMC approval, which is expected shortly. Within month’s time after the approval, we will be able to launch iron ore contract,” ICEX’s Chief Executive Officer (CEO) Sanjay Chandel said……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Abc.net.au: The weakening US dollar is encouraging investment in commodities like wheat, which is helping the price remain high. Grain analysts say the damage to farmers from the rising Australian dollar would be much higher if the wheat price was lower.
Speculative investment is flowing into the grains market, because it’s cheaper to invest when the US dollar is low……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Abcnews: If the G20 wants to soothe currency tensions, finance leaders may have to do more than simply repeat a well-practiced refrain that too much foreign exchange rate volatility is unwelcome.
These Group of 20 officials, meeting in South Korea beginning on Friday, face even greater pressure to deliver something substantive after the United States delayed a hotly anticipated report on whether China (or any other country) was manipulating its currency to gain a trade advantage……………………………………….Full Article: Source

Posted on 18 October 2010 by VRS |  Email |Print

From Bloomberg: Yuan forwards strengthened on speculation China’s central bank will allow its currency to rise to help reduce its economy’s dependence on exports.
China should keep a gradual and controlled pace in re- valuing its currency, Li Daokui, an adviser to China’s central bank, said at a forum in Beijing on the weekend. Central bankers and other officials meet in Shanghai today for a conference sponsored by the International Monetary Fund……………………………………….Full Article: Source

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