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Commodities Briefing 21.Mar 2011

Posted on 21 March 2011 by VRS |  Email |Print

Allied air strikes against Libya, one of the world’s major oil producers, provide a powerful headline that could help dominate commodities prices in coming days. But, for forecasters trying to weigh the potential impact, it is worth noting where historic events in the past week drove some key markets: Nowhere.
Within a week, the triple blow of an earthquake, a tsunami and a nuclear crisis in Japan threatened the world’s third largest economy, while Saudi Arabia’s decision to send troops into Bahrain raised the stakes for ongoing Middle East unrest……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Bill GaryWheat stockpiles shrinking the most in four years means prices will keep rebounding from their worst slump in at least a quarter century.
The grain will average $8 a bushel on the Chicago Board of Trade in the second quarter, 11 percent more than the $7.23 reached March 18, according to the median in a Bloomberg survey of 22 analysts……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Volatility returned to the City of London with a bang last week. Having spent most of the past year quietly drifting higher, the stock market suddenly swung around violently. It posted several big losses before rallying as investors tried to assess the ramifications of the disaster at the Fukushima Daiichi nuclear plant.
The wild swings were no surprise. Financial markets often struggle to price extreme events and Japan’s earthquake and deadly tsunami have been no different……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

U.S. Energy Secretary Steven Chu said the worst is probably over in Japan as efforts to stabilize the Fukushima Dai-Ichi nuclear power plant have had some success.
Tokyo Electric Power Co., owner of the crippled 40-year-old plant, reconnected a 1.5-kilometer (1 mile) power cable yesterday to unit No. 2 in an effort to revive cooling systems knocked out after the magnitude-9 earthquake and tsunami……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

For the financial markets, the ramifications of the Tōhoku earthquake and its aftermath are many. We already saw significant moves across asset classes, from stocks to commodities to currencies, but these short-term effects will likely soon be forgotten.
Looking a bit further out, Japan will need to undertake a massive reconstruction effort, which will not only give a much-needed boost to the country’s devastated economy, but also lead to a demand increase for raw materials like copper and iron ore……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Oil climbed in New York after the U.S., U.K. and France launched cruise missiles and airstrikes at targets in Libya and as continuing unrest in the region renewed concerns the turmoil may spread and disrupt supplies.
Futures advanced as much as 2.1 percent after Libyan leader Muammar Qaddafi vowed to repel allied forces pounding military installations……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

UN-sanctioned aerial and naval attacks on Libyan air defence and ground forces at the weekend are likely to see oil prices vault higher this week, overcoming demand-side jitters stemming from Japan’s earthquake and Chinese monetary tightening.
French planes fired the first shots in what is the biggest international military intervention in the Arab world since the 2003 invasion of Iraq, destroying tanks and armoured vehicles in the region of the rebels’ eastern stronghold, Benghazi……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

The U.S. economy faces numerous obstacles that threaten to derail the recovery. But economists are most fearful of one major headwind: oil prices. More than two-thirds of the 23 economists surveyed by CNNMoney identified high oil prices as the most serious risk facing the economy.
As uprisings spread across the Middle East and North Africa, prices have soared about 15% in the past two months, pushing gas prices higher……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Growing world demand for sustainable energy puts a stable producer of oil and gas like Canada in an ideal position to become a global energy superpower — if the country can embrace the right national strategy to make it happen, according to the head of Shell Canada.
Developing such a strategy starts with a cross-Canada dialogue on energy involving Canadians from all walks of life, said Shell Canada president and country chair Lorraine Mitchelmore in an interview with Postmedia News……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Global miners and smelters enjoyed a huge recovery in 2010 and early 2011 following the financial crisis, with base metals, iron ore and gold surging to record highs on a heady mix of cheap central bank finance, government stimulus and a laggardly supply response to improved demand prospects.
New headwinds for the sector however now include China’s moves to cool its economy and the uncertain impact and pace of an expected plan by Japan to rebuild after the devastating earthquake and tsunami……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

US investment bank Goldman Sachs Group Inc said it forecast gold prices rallying to a record $1,480 an ounce in three months on declining U.S. real interest rates.
The bank said in a note sent on Friday it still expects gold prices to reach a peak in 2012 as U.S. interest rates are set to rise with the economy continues to recover. Goldman has a six-month gold view at $1,565 an ounce, and a 12-month forecast at $1,690 an ounce……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Gold prices advanced at the bullion market here today due to hectic stockists and speculative offtake as well as renewed local buying interest on the back of firming global markets . Silver recovered smartly on higher industrial offtake and investment buying.
In the global market, gold prices rose over dollar weakness due to US inflationary pressure amidst worries over Middle-East unrest and rising Japanese nuclear crises taking the metal again to risk aversion tag……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Precious metals as investment options have been in the news since the last few years. Investments in precious metals have given very attractive returns over the last few years. As a result, there are many new instruments being introduced in the markets which are based on precious metals.
These are some of the major reasons that drove the prices of precious metals in the past and are expected to drive the prices in the medium term:………………………………………Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Analysts have been bullish on copper for a while now—who wouldn’t be, after last year’s price rise of 31.44 percent? But 2011 may prove to be a different story. Year-to-date, copper prices have dropped 4.95 percent, while inventories at both the London Metal Exchange and COMEX have risen.
With Chinese inflation—not to mention Japan’s recent earthquake—increasingly worrying investors, where will copper prices go next?………………………………………Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

As the world has entered a more dangerous state in recent weeks, opportunities emerge as those who can’t take the heat leave the kitchen. One such opportunity is in Uranium, a metal that has seen a massive sell off due to fears about Nuclear Power being shunned in the wake of the Japanese earthquake demonstrated by the Nuclear ETF NLR:
Japan currently has 54 nuclear reactors in total, with 11 offline due to the earthquake and tsunami. The loss of the 11 reactors represents a loss of only 3.5% of electric generation capacity for Japan……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

The Shanghai Futures Exchange (SHFE) will launch lead futures for hedging by smelters on March 24. The contract period for the futures will range from September 2011 to March 2012, with the deposit for each contract set at 11 percent of its value, the SHFE said.
The daily movement limit is set at 6 percent and each lot size is 25 tonnes. The higher lot size (five times that of existing copper, aluminium and zinc contracts is expected to keep small investors from speculating, analysts said……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Nasdaq OMX Group Inc.’s potential hostile bid for NYSE Euronext would face substantial antitrust questions in the U.S., where it would merge two direct competitors and create a monopoly in the market for corporate listings, according to antitrust lawyers.
Much will depend on how a bid might be structured, but antitrust experts see few palatable options for Nasdaq to allay concerns that the deal will harm competition……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

A further move by the world’s major central banks to weaken the yen could come as soon as Monday, though the goal will be to ensure market stability rather than push the yen sharply lower, traders and economists said.
While Monday is a market holiday in Japan, currency traders will be on full alert as trade begins in New Zealand, hours before the Bank of Japan might intervene by selling yen……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

The yen declined for a second day against all its major counterparts on speculation the Group of Seven nations will keep selling the currency to curb its appreciation and help support Japan’s economy.
The yen extended losses after sliding the most against the dollar in six months on March 18 when G-7 members sold the currency after it reached a postwar high, endangering the Japan’s recovery from its biggest earthquake……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Is the Group of Twenty Countries (G20) envisaging the creation of a Global Central bank? Who or what would serve as this global central bank, cloaked with the power to issue the global currency and police monetary policy for all humanity?
When the world’s central bankers met in Washington in September 2008 at the height of the financial meltdown, they discussed what body might be in a position to serve in that awesome and fearful role……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

This week attention will remain on the spillover effects of Japan’s nuclear crisis as a large degree of edginess remains. Somewhat surprisingly it has been cities across China, including Hong Kong, that have witnessed panic in recent days, in contrast to the relative calm in Japan.
Last week, a salt-buying frenzy was unleashed across China that spread to Hong Kong, which quickly became a rather unsavory spectacle. Rumors had spread via the Internet from across the border that some salt contains iodine, which would provide protection from a looming radiation threat from Japan……………………………………….Full Article: Source

Posted on 21 March 2011 by VRS |  Email |Print

Gold (as measured by the exchange traded fund GLD) rallied from a low in July at $113.08 to a recent high of $140.61, or a rise of 24.3 percent.
Finally, the dollar declined 15.2 percent, as measured by the PowerShares Bullish Dollar ETF. Increasing the number of total dollars reduces the value of individual dollars and therefore increases the prices of commodities and stock prices……………………………………….Full Article: Source

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