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Commodities Briefing 19.Oct 2010

Posted on 19 October 2010 by VRS |  Email |Print

From Economist.com: The statistics pages at the back of the Economist have always been a useful guide for me, because they provide perspective from the daily volatility of the markets. So it is particularly instructive to look this week at our own commodity price index. Higher wheat and metals price have been hitting the headlines, so it is no surprise that the all-items index is up 8.4% on the last month.
It is more surprising that it has risen 28.1% over the last year. Furthermore, this is not a boom that is driven by oil. The crude price has only risen 10.2% over the last year……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Cityam.com: Gold bullion was down 0.7 per cent to $1,361 while the dollar gained ground against all major currencies except the yen yesterday. Talk of the inverse link between these safe havens is not new and the chart below shows it in action over the last four days.
But this relationship is not only true of gold; dollars have been pouring into commodities in general over the past few months, growing every time the dollar weakened……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Bloomberg: A further round of quantitative easing from the U.S. Federal Reserve will be a “game changer” for commodities, prolonging a bull market, according to UBS AG.
Palladium, iron ore, copper, gold, thermal coal and zinc are the bank’s top picks, according to the note dated today, which summarised a bank commentary from Oct. 18……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Consumeraffairs.com: We all know how well gold has been doing lately, hitting all-time records although today gold futures were slightly lower because of slight rise in the value of the dollar. You can’t turn on CNBC or Bloomberg without someone talking about how 10% of their portfolio is in gold.
Would you be surprised to learn that even though gold has been hitting record prices lately, at least five other commodities have performed even better, as have Exchange Traded Funds (ETFs) that are tied to their performance?………………………………………Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From AFP: Saudi oil minister Ali al-Nuaimi said late Monday he hoped that OPEC and oil producers would work jointly to ensure a steady supply of oil on the market.
Speaking at a symposium marking the 50th anniversary of the Saudi-led oil cartel, Nuaimi also stressed that Saudi Arabia continued to have large surplus reserves of easily-accessed oil, despite worries to the contrary……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Hardassetsinvestor.com: Last week oil went for a bit of a roller coaster ride—with a low of almost $81 and a high of almost $84 (though not necessarily in that order). But that’s nothing new. Oil’s been pretty volatile for the past few months, bouncing between $72 and $84 all summer long: Crude’s gone up and down and everywhere in between.
And then there was last week. Oil started last Monday in the $82.25 to $82.50 range, but lost around a dollar or more (depending on where you draw the lines) by Tuesday morning. By Wednesday, crude had gained that dollar back and then some, almost touching $84 by midmorning Thursday. But on Friday, it spiraled down to near $81……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Thefuelcardpeople.co.uk: Senior executives within oil production cartel Opec have insisted that oil prices need to move higher if the commodity is to continue to provide profits for its producers in the face of the weakening dollar.
According to AFP, ministers from Algeria, Libya and Venezuela suggested that prices of between $70 and $80 a barrel are insufficient and called on the organisation to increase the amount it charges for crude……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Cnbc.com: South Korea, holder of the world’s fifth-biggest foreign exchange reserves, is considering buying gold to diversify its dollar-heavy portfolio, the country’s central bank said, adding it would be cautious in making any final decision.
Even a small realignment of South Korea’s reserves would have a powerfully bullish effect on the gold market………………………………………Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Investorsalley.com: With the global economy struggling to sustain even a modest recovery, the U.S. Federal Reserve pledging further quantitative easing if needed, and the dollar and several other leading currencies showing unrelenting weakness, there have been plenty of reasons for precious metals to rally of late - and gold and silver have done just that.
Gold has set a series of all-time record highs over the past five weeks, topping $1,350 an ounce for the first time ever as the dollar slipped to its lowest level since early January……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Peopledaily.com.cn: China will further reduce quotas for rare earth exports by 30 percent at most next year to protect the precious metals from over-exploitation, said an official from the Ministry of Commerce.
He added that the country is now facing the possibility that reserves of medium and heavy rare earths might run dry within 15 to 20 years if the current rate of production is maintained……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Reuters: China looks set to remain the leading producer of rare earth metals for years to come, with prices to double next year, top European producer AS Silmet of Estonia said on Monday.
China is the world’s biggest producer of rare earth metals, vital for the auto and electronics industries……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Bloomberg: Copper prices rose to the highest level in 27 months as the dollar resumed a slide, boosting the appeal of commodities as alternative assets.
The greenback erased an earlier advance against a basket of major currencies on speculation that the Federal Reserve will ease monetary policy further to help bolster the economy. Copper reached $3.88 a pound, the highest price since July 2008……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Barrons.com: The iPath DJ-UBS Copper ETN has gained more than 26% in the past three months, making it one of the best performing commodity exchange-traded products on the market, according to Morningstar data.
By contrast, the PowerShares DB Commodity Index Tracking Portfolio was up slightly more than 12% in the same timeframe heading into Monday……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Greenfaucet.com: One of the major stories of the past few months has been the impressive rally in gold prices, which have repeatedly touched new record highs in recent sessions. Fueled by concerns about the impact of further quantitative easing and weakness in the U.S. dollar, gold has climbed steadily higher even as equity markets have showed somewhat surprising strength.
The stellar performance of the yellow metal, along with a slew of options for establishing both direct and indirect exposure, has sent interest in precious metals to new highs as well……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Reuters: ETF Securities said on Monday its U.S.-listed palladium exchange-traded product broke above $500 million in assets under management, reflecting investor demand for precious metals other than gold.
The fund saw outstanding shares rise to a record 8.45 million shares last week, indicating investor appetite for palladium, which is primarily used in catalytic converters to cut vehicle emissions……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Investorplace.com: This week, investment research firm Morningstar issued its most recent Fund Flows Update report. The results are interesting in that overall mutual fund and exchange-traded fund asset inflows (the money put into funds buy investors) in September were a lot less than the outflows (money taken out of funds by investors).
According to the report, long-term mutual funds saw inflows of $14.3 billion during the month, while U.S. equity outflows continued reached $16.3 billion. This, as the report notes, was despite the best-performing September for stocks in 71 years……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Bloomberg: Asian hedge-fund managers are missing out on the cash flooding into the world’s fastest- growing region, leading some to close funds or defer new offerings.
Singapore-based Amoeba Capital Partners Pte, run by the former head of Asian investments at Morgan Stanley’s asset- management unit, is returning money to investors in its stock hedge fund, citing “tough” industry conditions……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Indiatimes.com: National commodity exchanges and the market regulator are slated to discuss the possibility of introducing market making to the seven-year-old marketplace to increase participation in contracts which do not witness daily transactions or are illiquid.
Of the 91 commodities that have been notified by Forward Markets Commission (FMC) for futures trading under the Forward Contracts Regulation Act, 1952, just 25-30 commodities are liquid, said an exchange official on condition of anonymity……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Bloomberg: Brazil stepped up efforts to curb gains in the real by raising inflow taxes and said it may be forced to take additional measures as Finance Minister Guido Mantega called for an end to the worldwide “currency war.”
Brazil, Latin America’s largest economy, raised the so- called IOF tax on foreigners’ investments in fixed-income securities to 6 percent from 4 percent. It also boosted the levy on money brought into the country to make margin deposits for transactions in the futures market to 6 percent from 0.38 percent……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From WSJ: Treasury Secretary Timothy Geithner said Monday the U.S. would not “engage” in devaluing its currency, but described China’s currency as “significantly undervalued,” as tensions between China and other countries remain high in advance of meetings of finance ministers and central bankers in South Korea this weekend.
Mr. Geithner’s comments were among his most blunt on the Chinese currency and his sharpest retort to recent criticism from some countries that the U.S. government is pursuing policies aimed at reducing the value of the dollar to spur exports and economic growth……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Reuters: Currency intervention and the threat of retaliatory actions by aggrieved nations will be high on the list of issues at this week’s G20 finance ministers’ meeting in South Korea, Canadian Finance Minister Jim Flaherty said on Monday.
“We’ll go back and look at world economic growth, we’ll go back and look at the currency issues as well, particularly, the currency issues related to some of the Asian economies,” he told reporters in Ottawa……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Smh.com.au: The World Bank warned Tuesday that capital inflows into fast-growing East Asian economies have inflated regional currencies and could threaten growth by making exports less competitive.
“Appreciating exchange rates so far have not crippled the recovery, but further appreciation will bear close watching,” said the World Bank, pointing out that regional currencies are 10-15 percent above pre-2008 crisis levels……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From AFP: Major talks on global warming next month must provide reassurances for the future of the market in greenhouse-gas emissions beyond 2012, the World Bank’s environment chief said Monday.
“What they have to find out is how to ensure that carbon trading does not collapse,” Inger Andersen, the Bank’s vice-president for sustainable development, said……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Abc.net.au: As political and business leaders confront the obstacles to putting a price on carbon, an independent report says Australia is already badly lagging behind its trading partners.
Global research commissioned by the Climate Institute says countries including Britain, China and the United States already have higher direct and indirect carbon pricing……………………………………….Full Article: Source

Posted on 19 October 2010 by VRS |  Email |Print

From Moneyweek.com: The French can be a surly lot. We drove into the village yesterday, greeted by long and haggard faces. The village seems to be carrying a collective burden.
Something’s upsetting the locals. But happily that something is making me some serious dough right now. Of course, I don’t want it to look like I’m revelling in their misery (which I’m not). But I will let you know their plight and how you could profit from the situation too……………………………………….Full Article: Source

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