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Commodities Briefing 10.Mar 2011

Posted on 10 March 2011 by VRS |  Email |Print

From Reuters: Commodity prices have surged largely due to supply and demand bottlenecks and the European Union response should be “considered and market based” rather than rely on mandatory curbs, governments are set to agree.
Some European Union states such as France want curbs on what they see as speculators such as hedge funds making quick gains in commodities markets at the expense of consumers……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Kitco News: Consumer-price inflation is likely to trend higher, and history suggests that investment through commodities and “floating-rate” loans has tended to fare best at such times, said the chief mutual-fund strategist with DWS Investments on Wednesday.
“We think both of those are best suited for this environment to protect clients against inflation going forward,” said Mark Peterson, head of mutual-fund strategy with DWS Investments, the U.S. retail unit of Deutsche Bank’s Asset Management division……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Ninemsn.com.au: The fall in cocoa, which rebounded within minutes, is the latest example of the extreme volatility that has rippled across “soft” commodities markets including cotton, sugar and cocoa, leading to strong protests to ICE officials.
Many people blame the rise of so-called high-frequency trading firms, which use computer algorithms to seek out pricing and other discrepancies in markets and trade in millionths of seconds……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Financialpost.com: Investors have a good reason to question whether Glencore International AG’s prospective share listing heralds the end of the commodity bull run.
The reputation of the world’s biggest commodities trader for having a sharp sense of timing and of where markets are heading, fed by a global web of on-the-ground intelligence, is making investors uneasy about future returns……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Reuters: Glencore, the world’s largest commodity trader, is aiming for an initial public offering (IPO) in May, a source close to the situation said.
There has been speculation that Glencore could try to squeeze out an IPO before Easter, which falls toward the end of April, although sources familiar with the situation have said no decision on whether to go ahead has yet been taken……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Efinancialcareers.co.uk: In a possible indication of further FICC reversals to come across the industry, Nomura – which had been vigorously building a commodities business – has changed its mind.
Sparkspread reported yesterday that the Japanese bank has decided to close its global energy and soft commodities business, at the possible cost of hundreds of jobs……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Reuters: Equity manager RCM plans to increase its range of commodity-focused funds as investors look to rising raw material prices as a means to protect their wealth against high inflation, its investment chief said.
Andreas Utermann, who is responsible for global strategy at the Allianz Global Investors unit, sees rising inflation and continued strong economic growth in emerging markets as dominant themes for 2011……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Seekingalpha.com: Haven’t we seen this movie before? The economy enters a recession; we have a bear market, the Fed cuts interest rates drastically flooding the global financial system with cash, and commodity prices begin to soar.
In the United States, the Fed has a handy way to ignore rising commodity prices, something they call core inflation. While most of us eat, drive, and heat our homes, the Fed excludes food and energy from its core inflation reading to remove “volatile” components of the inflation equation……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Cnbc.com: It’s no surprise that the normal supply and demand economics in the oil markets have been replaced with fear and speculation. And today, two major players went on the offensive.
Algeria’s Oil Minister and the CEO of the world’s biggest oil company by market value, ExxonMobil both appeared on CNBC with the same message: There is no physical shortage of oil in the markets today……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Inquirer.net: American investment bank Merrill Lynch sees global oil prices surging to $144 per barrel based on the Brent crude benchmark in the next three months given the political unrest in the Middle East and North Africa.
“Global oil demand has been expanding at a breakneck pace in recent quarters, and now the political situation in Libya has reduced oil production by one million barrels per day,” Merrill Lynch said in a commentary dated March 7……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From CNN: A longtime American diplomat to the Middle East provided some reassuring words to the oil industry Wednesday: The situation in Libya and Egypt may remain tumultuous for some time, but the major oil producing countries of Saudi Arabia, Kuwait, Iran and Iraq will likely stay stable.
“The traditional regimes are going to come through this pretty well,” Retired Ambassador Ryan Crocker told a crowd of energy industry executives at IHS CERA’s annual conference. “They are very sensitive to their populations, and have made numerous changes.”………………………………………Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Bloomberg: There is no need for OPEC to hold an emergency meeting right now because there is no shortage of crude supplies in the market, said Youcef Yousfi, Algeria’s Minister of Energy and Mines.
Oil fell from the highest level since September 2008 yesterday after Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said that OPEC members are discussing whether to hold an “urgent meeting.”………………………………………Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Mineweb.co.za: China should use some of its $2.85 trillion foreign exchange reserves to buy more gold XAU=, a government adviser was quoted as saying by local media reports on Wednesday.
Li Yining, a senior economist at Peking University and member of the Chinese People’s Political Consultative Committee, an advisory body to the national parliament, said that China should use the precious metal to hedge against risks of foreign currency devaluations……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Resourceinvestor.com: Last week, I saw silver rise $1 in one day. I remember when the white metal’s total cost was $1! When I urged readers three years ago to load up on silver at $10 because it was headed to $50, peopled insisted that I was insane. Now that we are ticking at $36, it doesn’t look so crazy after all.
Investment demand is overwhelming industrial demand by a large margin. The world produces about 1 billion ounces of silver a year to meet 1 billion ounces a demand for jewelry and industrial process……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Mineweb.co.za: The Silver Price is hitting new recent highs over $36.50 today in a more vigorous performance than even gold. Many in the developed world precious metal markets are amazed at the performance of silver and see this continuing, whereas others feel it is running away with itself.
The “backwardation” in silver [when ‘spot' - or immediate delivery prices are higher than for future delivery] has stressed just how much immediate demand there is for silver and clearly a physical shortage of the metal has arisen……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Resourceinvestor.com: Silver has been red hot lately and the silver shares have joined in the fun. Yet, we haven’t seen a corresponding breakout in gold or in the gold shares (as evidenced by GDXJ and GDX). In the chart below we show SIL (large silver stocks), silver, gold, GDXJ (gold juniors) and GDX (large cap golds).
Silver has been the clear winner as it broke out first while the large and junior silver shares would breakout later. Note how gold has yet to breakout and how GDXJ and GDX have yet to test recent highs……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Palladiuminvestingnews.com: Palladium has had quite a run over the last year. In the last 12 months, the metal gained over 80 percent, with prices rising to their highest levels since 2001. Since the start of 2011, palladium has seen wild fluctuations in price ranging between a low of $753 per pounce to a high of $858 per ounce.
The price took a serious hit as high oil prices raised fears of inflation and weak auto sales. However as oil prices are starting to tick lower, the price of palladium has stabilized……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Seekingalpha.com: The worldwide bull market for stocks turned two-years-old on March 9, 2011. And so far, there’s been two meaningful corrections - one in 2009 and one in 2010.
Some in the media have suggested that the Dow might not experience any significant pullback … like the way U.S. stocks behaved in 1995. Others believe that stock assets will get knocked for a major headache, but eventually stake a claim to new heights……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Wallstcheatsheet.com: Commodities are booming. Famous commodities investor Jim Rogers says we are in the middle of a long term bull market. So, how do you get involved?
The easiest way is to take a look at the most popular exchange traded funds and notes in the sector. Wall St. Cheat Sheet has compiled a nice list for you to get started……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Opalesque Industry Update: Hedge funds returned an average of 1.45% in February and the rate of net investor inflows was again strong. Below are early estimates for February hedge fund performance and asset flows. A full report will be available later in the month.
February Highlights: The equal weighted HFN Hedge Fund Aggregate Index was +1.45% in February 2011 and +1.73% year-to-date (YTD). The S&P 500 Total Return Index (S&P) was +3.43% in February and +5.88% in the first two months of 2011. ………………………………………Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Dow Jones: U.S. Trade Representative Ron Kirk said Wednesday the Obama administration will continue to push for China to adopt a more flexible currency policy and ensure its economic policies don’t discriminate. Pressed several times by senators to take more aggressive action to deal with alleged currency manipulation, Kirk said U.S. Treasury Secretary Timothy Geithner has responsibility over currency policy.
But he said Geithner and President Barack Obama have repeatedly made clear that it’s in the interest of both China and the global economy for the government to move toward a market-determined currency policy……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Bloomberg: The European Union could use a “floating cap” to adjust supply in its carbon market and keep prices from falling, according to an analyst at Accenture Plc.
Distribution of EU carbon permits “could be handled in a manner not dissimilar to how central banks handle money supply and interest rates,” said Mauricio Bermudez Neubauer, a London- based lead consultant on carbon markets at Accenture……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Commodityonline.com: Global powers did not come any closer to creating a Libyan no-fly zone and Col. Gaddafi’s loyalists appeared to gain the upper hand against rebels in at least one coastal city of the country on Wednesday. The situation prompted traders to keep bids on WTI oil prices just above $105 per barrel, and US dollar selling came back into the picture as well.
NYMEX oil has now risen 20% over the past month, and Brent crude was trading at just above $114 in London this morning……………………………………….Full Article: Source

Posted on 10 March 2011 by VRS |  Email |Print

From Updateddailey.com: Commodities trading is a variety of investment where one can make cash by speculating on the cost of a certain commodity going down or up in days to come. Commodities are often the indispensable things that folks employ each day. Almost all of the times, these commodities are the basic necessities required by a modern society.
When talking about certain commodities being traded in the commodity market, it must meet precise circumstances to make it acceptable for trading……………………………………….Full Article: Source

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