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Commodities Briefing 22.Oct 2010

Posted on 22 October 2010 by VRS |  Email |Print

From Sfgate.com: Gold tends to be all the rage in times of economic uncertainty. Investors flock to the “yellow metal” when things go sour because they see it as a safe haven for their money until they feel better about venturing back into things they view as riskier, like common stocks and real estate.
Such a strategy can actually be very dangerous, though. When gold or any other investment becomes too popular, it raises the risk of a “bubble” - unsustainably high prices that could suddenly plummet, losing investors a lot of money very quickly……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Spiegel.de: Hedge funds and other major investors are always looking for new places to park their cash. Now copper is attracting the hot money, causing the price of the metal to fluctuate wildly. Key industries are warning of the consequences.
In northern Chile, on the high plateau of the bone-dry Atacama Desert, machines have cut a giant hole in the Earth’s crust. The crater is three kilometers (1.9 miles) wide and almost 1,000 meters (3,280 feet) deep. It grows larger every day. And as it grows, the Chilean state becomes wealthier……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Commodityonline.com: Copper is one of the main indicator for the global economy’s health.If copper consumption is up that means the global economy is growing and the manufacturing sector is also roaring.
The Dow Jones-UBS copper index entered an area of resistance after a long rally this week. The area of resistance is in the range of 410 to 450 and the index closed last Monday at 416……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Mineweb.co.za: The Managing Director of the Metal Bulletin, Raju Daswani, says “the fundamentals of most base metals markets are significantly stronger than they were at any point last year, with copper and tin particularly tight.”
In a recent presentation, Daswani advised, “These markets have already returned to supply deficits, as has nickel - lead will join them in deficit in 2011.” With a global copper supply deficit forecast for both 2011 and 2012, Daswani predicted copper prices “will remain on a broad upward trend. For 2011 our price forecast is $7,900/tonne compared to our 2010 forecast of $7,375.”………………………………………Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Resourceinvestor.com: As China controls 97% of the world’s rare earth production, and consumers are desperate to lock in supplies so they can build everything from hybrid cars to IPods to heat seeking missiles, you can expect to hear a lot more about this space. I have already seen the odd story showing up in the mainstream media.
Not only that, in the future I expect to see similar developments across the entire resource space, including precious metals, copper, iron ore, molybdenum, tin, nickel, aluminum, and all of the food groups. We are on the eve of the era of The Great Resource Shortage……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Commodityonline.com: World crude steel production for the 66 countries reporting to the World Steel Association (worldsteel) was 112 million metric tons (mmt) in September. This is 0.9% higher than September 2009. China’s crude steel production for September 2010 was 47.9 mmt, a decrease of -5.9% compared to September 2009.
Elsewhere in Asia, Japan produced 9.2 mmt of crude steel in September 2010, up 11.7% compared to the same month last year. South Korea’s crude steel production for September 2010 was 4.7 mmt, 3.2% up compared to the same month last year……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Hellenicshippingnews.com: Citi Investment Research & Analysis said in a report citing a senior industry official that Chinese steel demand growth will slow to a single digit percentage rate starting from next year Mr Zhou Guocheng former deputy secretary general of the China Iron & Steel Association said that Chinese steel sector will post average annual output increases of 20 million tonnes to 30 million tonnes for the next five years.
By the end of 2015, China is expected to be able to roll out 730 million tonnes of crude steel while its demand growth will slow from a double digit percent rate to mid single digits from the beginning of the 12th five year plan……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Mineweb.co.za: Investors once again flock to the prince of base metals: are they like rabbits in the headlights? In terms of price volatility, nickel (most of which is used in producing stainless steel) ranks as one of the most dangerous minerals of all. Go back five years, and nickel roared up from around USD 5.00/lb to a peak of nearly USD 25.00/lb in 2007.
Then it crashed back to about USD 5.00/lb during the great commodities wipeout of 2008. Today the price is trading around USD 10.65/lb……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Usatoday.com: Gold has soared more than 400% since its low of $255.95 on April 2, 2001, driven by fears of inflation and the declining value of the dollar on the global currency markets. If you want to invest in gold, you have several choices: collectible gold coins, gold bullion, gold-mining stocks, gold mutual funds and gold exchange traded funds.
Which is best? It depends on how much money you have, how long you plan to hold your investment, and why you’re investing in the yellow metal. Here, then, is a rundown of your many options in buying gold……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Independent: Economic woes have not lessoned the demand for the swine sniffing white truffles from Alba, Italy as well as parts of Croatia and France. The ‘white gold’ peak season begins at the end of October with an expected price tag of €4,300 per kilogram.
According to Singapore’s news source The Sunday Times, “White truffles are cheaper this year, by as much as 40 per cent compared to last year’s peak prices.”………………………………………Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Arabianbusiness.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 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 22 October 2010 by VRS |  Email |Print

From Commodityonline.com: Silver, the shining start among precious metals, has already set a 30-year record and the silver exchange traded funds (ETFs) also posted big gains in the recent past.
To add to that, silver prices could go even higher than what they are now. Primarily driving the price now is safe-haven buying, driven by beliefs that governments around the world will enact more stimulus and weaken their currencies. There also may be less of the metal to go around here, too……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Emirates247.com: The current level of oil prices is fair and it will remain so even if they reach $90 a barrel, Opec’s secretary general was quoted on Thursday as saying. Abdullah Al Badri said the 12-nation Organisation of Petroleum Exporting Countries, which controls over 70 per cent of the world’s oil, can still influence the market but he added it was not to blame for the recent surge in crude prices.
“Oil prices are not high at present…prices are hovering between $75 and $85 a barrel, which is a reasonable price for producers and acceptable for consuming countries,” Badri told the Saudi Arabic language daily Okaz……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Ibtimes.com: Within two weeks we will know for sure if the US Federal Reserve is prepared to flood the market with further stimulus in the form of quantitative easing (QE). As current betting goes, it’s odds-on that it is.
Although there are a significant number of Fed members who have doubts about further monetisation, both Ben Bernanke and William Dudley, FOMC chairman and vice-chairman respectively, sound firmly in favour, and history suggests that they will take the majority with them……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From AFP: The International Monetary Fund Wednesday said it has lowered Iraq’s oil production forecast, after a disappointing 2010.
In its first review report of its February 3.7 billion dollar standby loan to Iraq, the IMF said it expected Iraqi oil production to reach 2.2 million barrels per day (bpd) in 2011, against the 2.9 million it forecast in February……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Reuters: U.S. financial market regulators on Thursday recommended ways to increase regulation of money market funds, and analysts said the wide-ranging nature of the proposal suggested reform was inevitable.
The President’s Working Group on Financial Markets issued suggestions for making money funds more stable and less susceptible to cascading investor withdrawals during a crisis……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Indiatimes.com: Rising demand for gold, low production and firm prices are prompting investors to load up on the yellow metal in their portfolios like never before. This is despite gold appreciating 22% over the past one year. Gold exchange-traded funds (ETFs) have been the biggest beneficiaries of this gold rush.
Gold ETFs, as a segment, have seen huge institutional and retail interest over the past few months. While gold ETFs buy units of gold, gold-based fund-of-funds (schemes that invest in other schemes) invest in gold through gold ETFs……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Usnews.com: One asset class that should be in most retirement portfolios is emerging market stocks. Stocks in companies in the 20 or so nations included in the popular MSCI Emerging Markets index are dominated by Asia (predominantly Taiwan and Korea) at more than 50 percent, Latin America (20 percent), Africa and the Middle East (20 percent), and some smaller European countries.
Investing in emerging market stocks is considered high-risk and high-return because you own companies in countries that are in an intermediate stage of development. Their economies are still developing and their stock markets are still gaining global clout……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Cri.cn: China’s first joint-stock commodity exchange — northern Tianjin Municipality-based Bohai Commodity Exchange — said Thursday it plans to facilitate trade for 100 commodities over the next three to five years.
“The priority this year is the listing of iron ore,” said Zheng Yu, deputy general manager of the exchange. He said most of the commodities traded on the exchange will be strategic commodities……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Reuters: Credit Suisse cut its commodities trading risk by nearly 30 percent in the third quarter, following in the footsteps of some of its U.S. peers, while its commodity revenues jumped.
The Swiss bank’s Value-at-Risk (VaR) for commodities slipped to $10 million during the quarter from $14 million in the second quarter. Year-on-year, it fell 50 percent from the $21 million in the third quarter of 2009……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Kitco News: Despite foreign exchange tensions between the western nations and China and emerging countries, there is no full-scale currency war yet, according to a senior foreign exchange strategist.
Marc Chandler, senior vice president for global currency strategy for Brown Brothers Harriman, said in an interview with Kitco News that currency wars are dangerous and hark back to the type of “beggar thy neighbor” competitive devaluation that exacerbated the Great Depression. To go to that extent would hurt world growth. Should a currency war develop, the results would be negative for the global and U.S. economies, he said……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From WSJ: In a world of soaring commodity currencies, Russia’s ruble stands out, hitting new lows even amid higher oil prices and renewed investor interest in emerging markets.
The ruble hit a new year low of 36.30 against a basket of dollars and euros Thursday, as government officials pointed toward a rising tide of imports and stagnant exports as a key cause of the currency’s recent slide………………………………………Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Reuters: Financial leaders from the Group of 20 major economies meet in South Korea from Friday to try to take tackle global economic imbalances and currency tensions that are feeding worries of trade protectionism as the world economy struggles for a smooth recovery from the financial crisis:
Investors are turning away from low-growth rich nations to fast-growing emerging ones, prompting steps by some countries to to control the wave of capital threatening to destabilise their economies. The following is a collection of official comments highlighting the concerns and strains:………………………………………Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Csmonitor.com: The risk that exchange-rate battles will harm the fragile global economy was the top policy concern as world finance ministers begin a multiday meeting this week.
It’s an issue that pits the United States prominently against China, but that also is stirring anxiety among other nations in the Group of 20, which gathered for talks Thursday in Gyeongju, South Korea……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Hardassetsinvestor.com: To many investors’ surprise, the Yankee dollar’s earned only a third-place ribbon for its depreciation against gold over the past 12 months.
With all the recent hoopla and headlines about gold making new highs against the greenback, the destruction derby of the world’s reserve currencies is actually won by the euro, with sterling close behind……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Irishtimes.com: The Irish Dairy Board was asked to pursue the possibility of setting up a global group similar to Opec to represent milk producers, with other big international companies or State agencies.
Hugo Maguire, a town of Monaghan co-operative delegate, proposed his idea to Kevin Lane, chief executive of the dairy board at the annual conference of co-operative societies yesterday……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Foxbusiness.com: The Federal Reserve announced on Oct. 15 it will continue its policy of “printing money,” in the hopes of stimulating additional lending. What does this second round of quantitative easing (QE2) mean for the precious metals markets?
Probably not much. Although retail investors might expect precious metals commodities like gold and silver to surge upward when the Fed floods the financial system with money, QE2 is unlikely to have a major impact on these markets……………………………………….Full Article: Source

Posted on 22 October 2010 by VRS |  Email |Print

From Businessweek.com: Commodities are retreating across the board as the dollar grows stronger and investors sell off some of their holdings to take profits.
Since commodities are priced in dollars, a stronger dollar makes them less attractive to buyers who use foreign currencies……………………………………….Full Article: Source

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