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Commodities Briefing 22.Mar 2011

Posted on 22 March 2011 by VRS |  Email |Print

Barack ObamaThe nuclear crisis in Japan has sent an alarm to nuclear industry globally. Policymakers worldwide have been debating over the safety of nuclear generation. US president Barack Obama requested the Nuclear Regulatory Commission to examine nuclear plants to ensure they can withstand earthquakes and other disasters.
The situation in the Middle East and North Africa remained tense. While Libya’s government announced a ceasefire against the rebels, fighting continued……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Barclays analysts specializing in measuring price momentum and other technical factors that play into markets’ gyrations are predicting that commodities are entering a new bull run. Looking at broad benchmarks, the technicians believe that commodities futures could be looking at a 23% upswing off recent lows.
The broad PowerShares DB Commodity Index Tracking ETF (DBC) hit a 52-week hight at $30.43 earlier this month. Then, it dropped to $28.49 last week before rallying and closing today up 0.5% at $29.86 a share……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

With the national economy still in recovery mode, lots of investors who learned their lessons the hard way are now trying to knock monetary uncertainty by coming back to commodity investments, a traditional source of stability.
Investments in gold bullion, silver bars, coins, and important mining metals help ease widespread fears about unsteady markets, the specter of a double-dip recession, and inflationary practices by in-the-red governments. Investing in precious metals quickly appears as an effortless, proven, and secure path to financial security for three basic reasons:………………………………………Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

The European Commission has published its plans for sweeping reforms of the bloc’s markets in financial instruments directive, including plans to introduce U.S.-style trade caps in 2012 or 2013.
The FSA has previously told Reuters that it is not its job to control prices and has defended its stance that position management, not hard position limits, is a sufficient tool to control markets……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

China’s imports of many major commodities all but dried up in February as a national holiday, abundant stockpiles and rising prices combined to discourage shipments, data from China’s Customs office showed on Monday.
Chinese demand is the motor of many world commodity markets, but this year prices have been driven more by supply disruptions around the world, while China’s tighter monetary policy and a crackdown on speculators has reined in bullish buying……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Tension in West Asia has led to a sharp rise in bullion and crude oil prices. In fact, the WTI (West Texas Intermediate) crude oil hit over $100 a barrel for the first time this year due to the unrest in Libya, thus compelling those associated with the financial markets to deliberate on crude oil prices. Most of them are curious to know where crude oil is heading.
When crude oil hit a record high in the last fortnight, Indian equity markets corrected sharply. This mandates traders and investors to have an exposure in commodities, which have provided a refuge to market participants during turbulent times in the domestic markets………………………………………Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Oil prices climbed Monday as energy experts warned that Libya’s oil exports could be off the world market longer than expected, and countries including the U.S. enforced a no-fly zone over Libya.
Here’s a breakdown of how energy prices traded on the New York Mercantile Exchange: Crude: climbed $1.26 to settle at $102.33 per barrel; Heating Oil: gained 2.82 cents to settle at $3.0525 per gallon; Gasoline: added 4.8 cents to settle at $2.9974 per gallon;………………………………………Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Investors wanting to track the soaring oil price with exchange traded funds (ETFs) should take care. Choose the wrong ETF and you could be wasting your time and money.
The Financial Services Authority last month announced it was stepping up its supervision of exchange traded products (such as exchange traded funds or ETFs, and exchange traded commodities or ETCs) over concerns that investors did not always understand these complex financial instruments……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries (OPEC) may meet to assess the impact of the nuclear crisis in Japan and the ongoing unrest in the Middle East and North Africa on oil supply, Minister of Foreign Affairs Odein Ajumogobia, has said.
“It [Japan] is likely to affect the oil market and therefore prices,” Ajumogobia told reporters after a meeting with Indian officials in Delhi. “I do suspect members of OPEC would be getting together to assess the situation of demand and supply.”………………………………………Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Silver and gold prices rose Monday as investors sought out relatively stable assets while uncertainty continues about the Middle East and Japan’s recovery.
Commodities traders are concerned about global oil supply disruptions because of anti-government clashes in Libya and other parts of the Middle East and North Africa……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

U.S. gold miner Newmont Mining Corp and Canada’s Agnico-Eagle Mines said on Monday they expect increasing demand for gold as a monetary asset to send the price up to levels of $1,500 to $1,600 an ounce in the next 12 months.
Speaking in exclusive interviews at the Reuters Global Mining and Steel Summit, the companies’ chief executives cited gold’s use as a proxy currency, central bank gold purchases, rising demand from Chinese and Indian buyers, and an affinity for gold as an investment in developed economies as chief drivers leading the metal to $1,750 or even $2,000 an ounce in the next few years………………………………………Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Gold investment prices jumped vs. a falling dollar at the start of Asian trade on Monday, hitting near-two-week highs for US investors as crude oil also leapt following the weekend’s joint UN air strikes on Libya.
The BBC reported that a key Gaddafi “command center” had been destroyed in Tripoli, capital of Africa’s third-largest oil producer. In Yemen, meantime, a senior general defected to the opposition, while Sunday’s referendum in Egypt returned a huge majority for constitutional reform……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Silver is increasingly becoming a global monetary metal, mostly due to inflationary concerns and the debasement of the world’s major currencies. And that’s the main driver for silver’s surging bull market, according to some key players in the precious metals investment sector.
Rising inflation in China and India, as well as Europe’s ongoing sovereignty debt crisis, are major contributors to gold and silver reverting back to their traditional “safe haven” status, according to New York-based James Steel, a precious metals analyst for HSBC Securities……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

The consistent rise in gold prices and the growing interest of investors in gold exchange traded funds (ETFs) appear to have led two mutual fund houses to launch schemes where you can directly invest in gold through the mutual fund scheme.
Let us explore the relative merits and demerits of investing in these gold funds vis-a-vis gold ETFs……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Financial literature is flooded with acronyms many investors struggle to keep up with. It almost seems that every new financial product comes with at least two new acronyms. The ETF world is no exception.
In fact, already at this point is where we find the first misconception, for ETFs or Exchange Traded Funds are not an umbrella term but rather a specific product-type within a wider range……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Shawn Reynolds’s goal is to pick resources stocks that can perform well regardless of what their underlying commodities are doing. That is easier said than done, but the strategy comes in handy for the portfolio manager of the Van Eck Global Hard Assets Fund (GHAAX) in times when global events increase volatility in the commodities arena.
“A basic investment tenet is we try to pick the best stocks that can perform under any commodity price,” Mr. Reynolds said. “We look at it from the bottom up.”………………………………………Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Rising commodity prices helped helped hedge fund managers to improve on their returns in February. Hedge funds tracked by Dow Jones Credit Suisse Hedge Fund Index has risen 1.38% in February.
Managed Futures managers posted a positive performance of 2.90% on gains in energy and precious metals which rallied due to the unrest in Middle East and North Africa……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Hedge funds cut their bullish bets on commodities by the most for any week since June as Japan’s nuclear crisis threatened the global economic recovery.
In the week ended March 15, an index of managed-money net- long positions, or wagers on rising prices, in 18 commodities tumbled 14 percent from a week earlier to 1.27 million U.S. futures and options contracts, government data compiled by Bloomberg show……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

India’s currency futures contracts were among the fastest growing last year. But at $1,000 per contract, their size “is about 10 times smaller than the typical contract size at the Tokyo Financial Exchange.
Another year, another triumph. In 2009, the National Stock Exchange (NSE) of India had overtaken the Nasdaq OMX Group to become the seventh largest derivatives exchange in the world. In 2010, it surpassed Chicago Board Options Exchange and Brazil’s BM&FBovespa SA to become the world’s fifth largest derivatives exchange, Futures Industry Association’s (FIA) latest rankings show……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

The G-7 will probably soon be able to claim another currency victory, but not just yet. Since Friday’s coordinated intervention, only the group’s sixth in 30 years, the yen has stabilized, with the dollar trading well over ¥80.
The sheer increase in yen liquidity, an improvement in global risk appetite over the weekend, and a renewed focus on inflation pressures around the world are all helping to reduce the risk premium in the Japanese currency for now……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Has oil moved into backwardation yet? What does corn’s roll yield look like? How do you know when it’s time to buy—or sell?
Each week, we investigate the futures curves of the U.S.’ most important commodities, helping investors better understand the market and seize buy-and-sell opportunities as soon as they arise……………………………………….Full Article: Source

Posted on 22 March 2011 by VRS |  Email |Print

Opec has revised its global economic growth upwards and says the world economy has continued to enjoy a “solid recovery” despite the social unrest in some parts of the Middle East and North Africa.
Opec increased its forecast for 2011 world economic growth by .1 per cent to 4 per cent in view of the healthy growth in the developing countries……………………………………….Full Article: Source

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