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Commodities Briefing 20.Oct 2010

Posted on 20 October 2010 by VRS |  Email |Print

From Bloomberg: Commodity assets under management rose to a record $320 billion last month, from $293 billion a month earlier, Barclays Capital said.
Investment flows reached $8.5 billion in September, the third-highest figure ever recorded, and took new money in the third quarter to $10.8 billion, the bank said in a report today. Investments linked to commodity indexes attracted $7.5 billion in the quarter, medium-term notes $1.9 billion and exchange- traded products $1.4 billion, Barclays said……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Sovereignsociety.com: There’s nothing hotter these days than emerging markets. Emerging markets are all the rage as foreign direct investments surge, IPOs boom across the region and currencies muster their single best calendar year of gains against the dollar in years. Credit spreads, which measure the riskiness of bonds against government securities, continue to narrow and, in some cases, hit new highs as yield spreads contract.
For example, benchmark US$ Colombian 10-year government bonds yield just 4.07%, an amazing 150 basis points more than Treasury bonds. Colombia? Really?………………………………………Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Bloomberg: Citigroup Inc., the bank 12 percent- owned by U.S. taxpayers, is adding the largest number of new commodity jobs in Asia and Europe amid a “leaner” year for raw materials, said Stuart Staley, the global head of the business.
The bank, which has about 270 people in commodities, is also seeking to win over more investors, adding to revenue from corporate clients, Managing Director Staley said in an interview in Amsterdam on Oct. 17. Citigroup, based in New York, started trading iron ore and the physical markets in liquefied natural gas and thermal coal this year, he said……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Ninemsn.com.au: A top US regulator has suggested delaying new caps that would trim big commodity bets amid criticism his agency is barrelling ahead without enough information.
Gary Gensler, chairman of the Commodity Futures Trading Commission, said that so-called “position limits” for traders in energy, metals and grain markets may be able to wait until better data on the size of markets’ and traders’ positions exist. Commissioners said they planned to propose a framework for the limits on November 30……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Maktoob.com: Gold prices have risen about 25 percent this year, reaching a record high of $1,387.35 an ounce on October 14. The precious metal had touched all-time highs in eight out of the last 10 trading sessions leading up to last Thursday, fuelled by a decline in value of the U.S. dollar.
The recent rally is the icing on a meteoric rise in the value of gold, viewed as a hedge against inflation and dollar depreciation, over the past 10 years……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Marketwatch.com: Gold market timers’ behavior is getting “curiouser and curiouser,” to quote Alice in Wonderland’s classic phrase.
After quickly turning more bullish when gold’s rally began this summer, and giving every indication that they would soon become irrationally exuberant, the average gold timer suddenly stopped dead in his tracks: In the face of gold’s impressive rally over the last couple of weeks — which brought the yellow metal to only slightly below the $1,400 level — the average gold timer stubbornly refused to become even a smidgen more excited……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Mineweb.co.za: Gold prices could rise as high as $1,420 an ounce over the short term but, the yellow metal is also expected to underperform other precious metals in 2011.
Writing in the latest version of its ABN AMRO Metals Monthly publication, the VM Group says, in the short term, “The Federal Reserve, may be about to give the gold market bulls what they have been warning for years - a massive new dose of inflationary cheap money in a bid to pull down US unemployment from almost 10%.”………………………………………Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Commodityonline.com: With the festival and marriage season at its peak, India’s gold traders are busy preparing for hige rise in demand for the yellow metal. Traders across the country from Kochi to Kolkata are now adding to their stocks as they see a big boom in sale sin the coming weeks. India celebrates Diwali, an auspicious occasion to buy gold, on November 5.
The traders are buying gold in a big way despite the high prices of the metal. Demand is still there for gold, traders have been buying dollars in the market as well. Gold is a dollar-quoted asset, and as India, the world’s largest consumer of the yellow metal, imports majority of its requirement, the rupee plays an important role in determining its landed cost……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Seekingalpha.com: Commodities are seeing rather mixed and somewhat lackluster trade today, with some mild gains in the dollar weighing on the energy, precious and base metals complexes. Risk aversion is generally dominating sentiment in the commodity arena as a knock-on effect form the equity markets, following some disappointing results from Apple (AAPL) and IBM (IBM) after the bell.
Rare earth elements (REE) on the other hand, all be it a very illiquid market, is seeing a lot of attention today after China signalled that their REE reserves will only last 15 to 20 years……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From AFP: China has halted some shipments to the United States of rare minerals vital to industry due to anger over a US probe, seizing on a tactic first used against Japan.
The newspaper, quoting industry officials, said that China quietly stopped shipments of so-called rare earths earlier this week in response to the US investigation into alleged Chinese subsidies into its green technology sector……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Ninemsn.com.au: Oil at $100 a barrel? Not as unlikely as it sounds, according to a note by Goldman Sachs, Wall Street’s biggest commodities dealer. Helped by the dollar’s recent tumble, crude prices have been rising fast. And, if Goldman is correct, oil will break the triple-digit barrier by the end of next year.
The Goldman forecast, made as oil broke free of the $70 to $80 range in which it has traded for much of this year, is not based on expectations of what the dollar will do. The bank has founded its forecast on stronger-than-expected growth this year in oil demand……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Thenational.ae: Like a high-stakes game played with barrels of oil, Tehran told Baghdad last week: “I see your 143 billion and raise you 150 billion.”
The Iranian minister of petroleum Masoud Mir Kazemi topped the Iraqi oil minister Hussein al Shahristani’s earlier increase in proved reserves. But Iran is bluffing. Mr Mir Kazemi might hold good cards but he cannot play them……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Arabnews.com: Total reserves from the Organization of Petroleum Exporting Countries (OPEC) have reached more than a trillion barrels, Petroleum and Mineral Resources Minister Ali Al-Naimi said Tuesday, highlighting OPEC’s ability to meet growing energy demand. He said Saudi Arabia and other OPEC countries produced more than 400 billion barrels since it was founded.
“When founded, members of the organization had around 300 billion barrels of oil reserves and in the last 50 years, they have produced over 400 billion barrels,” Al-Naimi told a symposium marking the group’s 50th anniversary……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Businessinsider.com: A flurry of physical commodity ETFs are being launched, whereby investment in the ETFs are backed by actual physical amounts of the commodity in question.
So if it’s a copper ETF, then you can rest assured that your investment in the ETF represents ownership is actual copper somewhere, rather than just being represented by some derivatives betting on the copper price……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Hardassetsinvestor.com: Over the last three months, the price of cotton futures has risen over 50 percent, propelled by speculation that demand will outstrip supply. Just last week, the price for a pound of cotton hit $1.198, the highest level since the New York Cotton Exchange was created—back in 1870.
The reason supply concerns have hit such panic stages is due to inclement weather around the globe. China, the No. 1 producer of cotton, will see its crop fall by 5.4 percent in 2010, drowned out by a series of heavy rains. Pakistan, the No. 4 producer, also had to cope with devastating floods that ravaged the nation……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From CNNMoney.com: Individual investors are boycotting the stock market, while hedge funds have regained their swagger after wandering in the wilderness.
The S&P 500 rose over 10% in July, August and September. But individual investors, those who invest primarily through mutual funds, were net sellers of stocks during every week of the third quarter……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Dow Jones: Extended trading hours on the Tokyo Commodity Exchange may have boosted the number of gold futures transactions, but so far this hasn’t resulted in higher oil and other commodity trading volumes, raising doubts about the future of some contracts.
Futures trading on Japanese exchanges has been on a downtrend since 2007, when the government introduced stricter regulations to protect individual investors, moves that were followed by a fall in the number of brokers and the closure of one exchange……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Reuters: The loss-making Tokyo Grain Exchange (TGE) has proposed a merger with Japan’s biggest commodity exchange, the Tokyo Commodity Exchange (TOCOM), the Nikkei business daily reported on Tuesday.
TOCOM and TGE, Japan’s second-ranked commodity exchange, denied there were any formal decisions or requests made about a merger, but both said they were keen to maintain domestic trading of agricultural products……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From PTI: Ahmedabad Commodity Exchange (ACE), country’s fifth national commodity bourse, will start trading operations on October 27, a top official of the exchange said today. Uday Kotak of Kotak Mahindra group, the anchor investor of the exchange, will announce the formal launch on October 26 in Mumbai, the official said.
ACE is the first instance of a regional exchange being licensed to upgrade into a national multi commodity exchange. The exchange is expected to begin trade in five agri-commodities - soyabean, soya oil, rape mustard seed, chana, castor seed……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Balkans.com: Tougher commodity market regulation is likely to achieve the aim of dampening trading, but it could also encourage price spikes and lead to management buyouts as brokers try to avoid curbs, a fund manager said.
Dawn Kendall, head of investment strategy at UK-based fund manager Architas Multi-Manager, said position caps could limit the activities of big brokers in metals and energy markets……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Xinhuanet: The world’s largest debtor is using dollar dominance and debts to suck the wealth from emerging economies. In a drummed-up currency war, in which China is viewed as the main target, the United States once again revealed its desire to promote the redistribution of global wealth to its own advantage.
A currency war is in essence a financial war, or a war for more wealth possession, one in which the country that has the dominant say in world’s currency issuance will gain an absolutely advantageous position in global wealth distribution……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From WSJ: News that China’s central bank is set to raise interest rates sent shockwaves through markets Tuesday as it ramped up speculation that global political powers could be nearing a deal on exchange-rate tensions.
The U.S. dollar shot higher while other currencies, notably the Australian dollar, euro and yen, all weakened in reaction to the news that the People’s Bank of China unexpectedly raised the one-year lending and deposit rates by a quarter of a percentage point each, effective Wednesday. However, commodities and equities weakened on the news……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Csmonitor.com: Peace talks broke down last weekend. Observers had expected the IMF meeting on the weekend to result in the equivalent of the Peace of Amiens or the Surrender at Appomattox. But Treasury secretaries and central bankers went home, unpacked their bags, and resumed their premeditated mischief.
The dollar went down. Why would anyone pay 100 cents for an old, worn out greenback when the Fed promises to create trillions more of them, brand spanking new? Europe and Japan resumed firing with their new QE guns……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From WSJ: South Africa signaled Tuesday it won’t join countries acting to weigh on their currencies despite the growth-hampering impact of a stronger rand, saying that it looks to the upcoming meeting of the Group of 20 industrial and developing countries for a coordinated approach.
Finance Minister Pravin Gordhan cautioned Tuesday against competitive action to depress currencies, which he said may eventually lead to a trade war as countries establish barriers to protect their own economies and jobs……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Bloomberg: EU carbon-dioxide permits fell to a three-week low as a “huge overhang” of allowances damped demand while their premium over United Nations offsets widened.
EU allowances for December dropped 36 cents, or 2.3 percent to 15.02 euros a metric ton as of 4:55 p.m. on London’s European Climate Exchange. That’s the sixth day of declines and the lowest intraday level since Sept. 24……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Bloomberg: Some East European governments may waive their option to allocate free emission permits to power producers in 2013, opting instead for auctions that would generate public money, a senior European Union official said.
Eastern and central European nations led by Poland won an exemption in 2008 from an EU requirement that utilities purchase all their carbon dioxide permits in the next phase of the bloc’s emissions-trading program, the world’s largest……………………………………….Full Article: Source

Posted on 20 October 2010 by VRS |  Email |Print

From Ameinfo.com: A harmonised pan-Gulf carbon trading platform to make cost-efficient decisions about greenhouse gas (GHG) abatement will bring immense economic, environmental and geopolitical benefits to the Gulf Cooperation Council (GCC) countries, which currently have some of the highest per capita carbon emission rates in the world, according to Justin Dargin, Research Fellow at the Dubai Initiative and Fulbright scholar of the Middle East.
Dargin’s comments came during a lecture titled “Development of Gulf Carbon Trading: Energy and Geopolitical Dimensions” that was hosted by the Dubai School of Government, a research and teaching institution focusing on public policy in the Arab world……………………………………….Full Article: Source

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