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Commodities Briefing 06.May 2011

Posted on 06 May 2011 by VRS |  Email |Print

Traders have described a “bloodbath” as commodity markets suffered an onslaught of selling overnight on mounting concerns about the US economy and fears of inflated prices triggered the biggest correction in more than two years.

In a slide reminiscent of the steep sell-offs of late 2008, Brent crude oil fell $US8 a barrel, natural gas dropped 5 per cent and the Reuters-Jefferies commodities index lost almost 4 per cent, wiping out more than half its gains so far this year……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

The price of oil tumbled by nearly $10 a barrel– dragging silver, gold, copper, lead and tin with it – as mounting concerns about the US economy fuelled speculation that the commodities boom may be ending.

As traders questioned whether the £36bn flotation of commodity trading giant Glencore marked the top of the market, most of the world’s key resources suffered another day of substantial declines……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

So Goldman Sachs was right after all. The bank everybody loves to hate called the top of the commodities market three weeks ago; yesterday, its prediction came true, with the declines in key commodities seen in recent days suddenly turning into an almighty crash.
The price of oil plunged especially dramatically, with Brent crude losing $12 yesterday, or 10 per cent, to trade at around $109 a barrel……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

The brutal selloff in commodity markets on Thursday had no obvious trigger, and by the same token, there was no obvious reason why prices should not recover in the next few weeks or months.

The speed of this week’s retreat, which went into free-fall on Thursday as oil prices plunged by a record $12, has stunned many traders. The 19-commodities CRB index .CRB fell 5 percent, a level exceeded only four times before, three of those in the midst of the 2008 financial crisis……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

Opec is considering raising oil output limits when it meets next month to convince the market that it wants to bring down crude-oil prices and reverse the drag of fuel inflation on economic growth.
Despite the loss since late February of Libyan supply, the Organisation of the Petroleum Exporting Countries does not foresee a shortage of crude on world markets, a view supported by comforting data on the state of the global inventory……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

South Africa’s Harmony Gold,the world’s fifth-largest gold miner, sees the price of gold rising to $1,800 an ounce in 2012, its chief executive said on Thursday.

The spot price of gold XAU= has been at record peaks, surpassing the $1,500 an ounce mark, and Chief Executive Graham Briggs said it could even go higher……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

The price of silver has plunged by more than 25% in just four trading sessions, as illustrated in this daily chart. Silver appears to be at the leading edge of the commodity price reversal that has blindsided many unlucky investors and speculators in the past week: gold is off by 5%, crude oil is down 13%, copper is down 6%, and gasoline is down 10%.

Those looking for an explanation for this point to signs that the U.S. economy is stumbling (e.g., the big jump in unemployment claims in recent weeks), since a weaker economy would reduce demand for commodities……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

GFMS, in its recently-published “Platinum & Palladium Survey 2011″, is forecasting that platinum will sustain a gross surplus in 2011 of a similar magnitude to that of 2010. Mine production is expected to increase modestly this year, and while GFMS describes the situation in South Africa as “challenging”, including risks surrounding this year’s wage negotiations, the prospect of a repetition of the major disruptions of 2007 and 2008 is relatively low.
The prospect of relatively buoyant prices also underpins increased supply from recycling and GFMS doubts that fabrication demand this year and keep pace with supply, let alone exceed it……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

With silver still at such a discount to gold, and as gold has got increasingly expensive, we’ve seen more and more interest in silver, because it is more affordable—not just on the professional investor side, but on the retail investor side as well.
At the moment, it is playing a role as a proxy gold—a poor man’s gold. We’ve seen particularly for the last month or so, significant volumes of silver buying coming from China, which has been one of the big sources of outward price pressure for silver. It’s quite obvious the market now looks like it’s focusing on a close above $50/oz, which I think we will reach sooner rather than later……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

India which holds the coveted position of being the leading consumer of gold could as well give a spirited challenge to the likes of China and South Africa in gold production provided the right policy decisions and enabling environment for gold exploration and mining is put in place.

India holds 9% of the global gold reserves estimated at 14,000 tonnes but fails to generate wealth out of it due to weak investment in exploration and mining activities……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

Copper nosedived more than 3 percent on Thursday to its lowest level since December as fears about sputtering global growth and growing inflation risk triggered a vicious cross-commodity crash.

The 19-commodity Reuters-Jefferies CRB index .CRB was last off almost 5 percent on the day and 8 percent so far this week, heading for its biggest weekly decline since December 2008, as prices of oil, metals and grains plunged amid the widespread liquidation……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

A broad selloff in commodities sent investors in the options market scurrying for defensive positions in exchange-traded funds that track crude oil and silver.

The months-long rally in commodities beat a retreat Thursday as the U.S. dollar rallied and the euro faltered after European central bankers indicated an interest-rate increase wasn’t imminent. The strengthening dollar and sliding oil prices acted as a signal to abandon metals like silver, which is down 25% in the past four days……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

Kotak Group, the promoter of Ace Derivatives and Commodity Exchange, is likely to dilute 11 per cent in the commex by August this year, a top company official said.

“Kotak Bank which holds a 51 per cent stake in Ace Derivatives and Commodity Exchange, will dilute 11 per cent stake by August. We are looking at strategic investors who will add value to our growth plans,” Ace Derivatives Chief Executive Officer Dilip Bhatia said……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

Green Exchange (GreenX) announced today that it has gained further regulatory approvals, expanding its reach to market participants in Belgium and the Netherlands.

The approvals from the Banking, Finance and Insurance Commission (CBFA) in Belgium and the Netherlands Authority for the Financial Markets (AFM) mean that GreenX now has formal regulatory authorization to offer its products and provide exchange services in those countries. This supports the Exchange’s aggressive growth strategy to provide quality environmental commodities products to the global market. GreenX currently is seeking further regulatory approvals from several other European jurisdictions including the Financial Services Authority in the United Kingdom……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

The European Union’s executive arm said Thursday it had submitted proposals to member states for new rules to enhance the security of the carbon trading market.The European Commission said it was making some amendments to the current rules to implement long-planned changes to the EU’s Emissions Trading Scheme.

However, the commission said in a statement it was also proposing “a new set of measures to further enhance the integrity and security of the current system of registries and the future single EU Registry that will become operational next year.”………………………………………Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

After the rest of the world appeared to turn its back on the dollar, the U.S. currency found one unexpected friend: the commodities market. Panic selling in oil, copper and silver led to the dollar’s best day since October against major currencies .DXY on Thursday as investors fled to familiar safe havens.

The biggest commodities correction in more than two years is the best, perhaps only, thing going for the dollar, which has been on a five-month slide as investors shunned it for higher returns in commodities and other currencies……………………………………….Full Article: Source

Posted on 06 May 2011 by VRS |  Email |Print

World food prices rose to near a record in April as grain costs advanced, adding pressure to inflation that is accelerating from Beijing to Brasilia and spurring central banks to raise interest rates.

An index of 55 commodities rose to 232.1 points from 231 points in March, the United Nations’ Rome-based Food and Agriculture Organization said in a report on its website today. The gauge climbed to an all-time high of 237.2 in February before dropping 2.6 percent in March……………………………………….Full Article: Source

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