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Commodities Briefing 23.May 2011

Posted on 23 May 2011 by VRS |  Email |Print

Li JingMany experts have concluded that this year may well be bullish for the commodities market, despite sagging commodity prices around the globe. Fundamentals of many commodities, such as demand, will remain unchanged in the long term, Li Jing, managing director and chairman of global markets for JPMorgan China, was reported as saying by the China Business News Saturday.
She said that investors should hold on to commodities that China lacks, and not be affected by the short-term drop in prices……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

To hear the mainstream media tell it, the commodities bubble has burst. Commodities are plunging across the board in response to the latest U.S. data, most of which seems to suggest that the American economic recovery is waning. Oil, which closed at $100 a barrel yesterday, was particularly hard hit, which is why so many suggest the commodities bubble has met its end.
Don’t you believe it. Commodities prices will be back. In fact, 12 to 24 months from now, gold, silver and other commodities will be trading at higher prices than they were just a few weeks ago – when they were trading at record levels………………………………………Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Many investors have so far sold in May but whether they have gone away or are just waiting on the sideline remains to be seen.
Stock markets were very resilient during the first half of May despite the carnage in commodities. With important support levels however getting close to the near term there is additional risk reduction as inflation and lower growth begins to bite……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Average fund investors who decided a year or more ago to take a chance on commodities funds have found out recently what all the warnings and danger signs were about. Now the question is how they intend to deal with trouble.
Prices for commodities have risen dramatically over the last year, with a wide range of factors pushing the trend. Many investors used commodities to hedge against a weakening dollar and the threat of inflation……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Commodities prices have been exceptionally volatile in recent weeks, with big daily rallies and plunges intermingled. Seemingly without rhyme or reason, commodities surge one day as traders crave riskier bets but then fall the next as they flee risk. While this commodities risk trade often looks capricious and schizophrenic, it actually has a logical and consistent driver. The state of the stock markets.
This perpetually frustrates countless commodities-centric investors and speculators……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

President Mahmoud Ahmadinejad remains Iran’s caretaker oil minister, despite a ruling by the constitutional watchdog that he had no legal right to the post, ISNA news wire reported a vice-president saying on Sunday.
The report shows the conservative president has no intention of retreating from his move to personally oversee the Oil Ministry, criticised by adversaries as his latest step to accrue more power……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Opec is the latest battleground in Iran and Saudi Arabia’s cold war. News that Iranian President Mahmoud Ahmadinejad may attend the next Opec meeting, has the potential of setting the cat among the pigeons.
Opec is the latest battleground in Iran and Saudi Arabia’s cold war. News that Iranian President Mahmoud Ahmadinejad may attend the next Opec meeting set for June 8, has the potential of setting the cat among the pigeons……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Craig Donohue, chief executive of the CME Group, the US futures and options giant, has defended the exchange’s decision to raise margin against commodities traded on its platform and has rejected claims the CME was responsible for a sell-off in silver futures.
Silver futures plummeted 27% in the first week of May, following margin hikes on the CME’s commodities trading platform. It was the biggest weekly plunge in silver prices since 1975 and followed an 84% increase in the amount of margin the CME demanded to be posted to secure positions……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

George Soros, the billionaire founder of Soros Fund Management LLC, sold most of his holdings in the bullion-backed SPDR Gold Trust and iShares Gold Trust funds in the first quarter, while buying shares of mining companies Goldcorp and Freeport-McMoRan Copper & Gold.
Soros’s fund held 49,400 shares of SPDR Gold Trust as of March 31, compared with 4.721 million at the end of the fourth quarter. The New York-based fund sold all 5 million shares it held in iShares Gold Trust………………………………………Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Gold and silver are higher again today with the debt-laden dollar, euro and yen all being sold. News that China has become the world’s largest buyer of gold bullion and has seen investment demand double continues to reverberate in the markets and may have contributed to this morning’s strength.
Both gold and silver are marginally higher for the week and after last week’s gain appear to have regained their poise and are consolidating after the recent sell off……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 127 million metric tons (mmt) in April 2011. This is 5.0% higher than in April 2010.
China’s crude steel production for April 2011 was 59.0 mmt, up 7.1% compared to April 2010. Japan produced 8.4 mmt of crude steel in April 2011, a decrease of -6.3% compared to the same month last year due to the production disruption caused by the recent earthquake and tsunami……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

The biggest drop in prices of uranium in two years may be ending as China and India plan atomic power developments that will more than double global production even after Japan’s nuclear disaster.
The radioactive metal has slumped 8.7 percent this year, the most since 2009, after tumbling as much as 27 percent as governments reviewed nuclear plants following the Japanese crisis in March, according to prices from MF Global Holdings Inc……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Another gold ETF needing to be fed with copious amounts of physical gold bodes well for the demand side of the gold equation. With $483 million raised in January the Chinese have signaled their support for such a product, so coupled with increasing demand for the metal of Kings, it will be worth watching how this one performs.
The rise of the ETF as a investment/trading vehicle has been phenomenal and if the Chinese get the ‘bug’ then there is telling just how large this ETF could become……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

The bleeding in commodity-related exchange-traded products didn’t entirely stop last week, but it sure slowed down. Investors took out a relatively modest $280 million from said ETPs, dropping total assets to $161 billion. But assets are actually about $1 billion higher than last week, due to modest gains in most commodity prices.
In contrast to prior weeks, however, sector performance was rather uneven. In fact, three of the five sectors actually saw inflows, led by energy with $148 million……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Oman Investment Fund (OIF), a sovereign wealth fund owned by the Oman government, and a hedge fund have agreed to buy part of National Stock Exchange’s stake in National Commodity & Derivatives Exchange (NCDEX) in a deal that would value the bourse at Rs 700 crore.
“OIF has agreed to pick up 5% in the commodity exchange from NSE and a hedge fund will buy 1.1% at a little under Rs 145 a share, the price Renuka Sugars paid to buy 7% in NCDEX from Crisil last year,” said a person aware of the development……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Depending on what side of the trade you were, many commodity investors want to put this month behind them. The first week of May witnessed an 11 percent slide in Standard & Poor’s GSCI Index of 24 commodities — the worst rout in almost two years.
Given this type of market volatility, conventional wisdom would suggest this isn’t the best environment or time for a commodity company to raise capital through an initial public offering……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

The best-performing currencies of 2011 are falling out of favor as the Federal Reserve plans its exit from record monetary stimulus just as the global economy shows signs of slowing, buffeting commodities and stocks.
A basket of nine currencies including Australia’s dollar and the Norwegian krone has dropped 3.3 percent in May against the U.S. dollar, after rising 7.3 percent in the first four months of 2011, according to data compiled by Bloomberg……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

Asian currencies weakened, led by South Korea’s won and Singapore’s dollar, as Europe’s worsening sovereign-debt crisis reduced demand for higher-yielding emerging-market assets.
The MSCI Asia-Pacific Index of regional shares dropped to the lowest level since March after Fitch Ratings cut Greece’s credit rating by three levels on May 20, citing the challenge of fiscal and structural reform needed to secure the state’s solvency. Standard and Poor’s lowered Italy’s rating outlook to negative on the same day……………………………………….Full Article: Source

Posted on 23 May 2011 by VRS |  Email |Print

The UK will halve its greenhouse gas output by 2025 from 1990 levels, Energy and Climate Secretary Chris Huhne said on 17 May.
Huhne told members of Parliament that the target, agreed by the government, would “set Britain on the path to green growth.” “It will establish our competitive advantage in the most rapidly growing sectors of the world economy,” Huhne was quoted as saying by the press……………………………………….Full Article: Source

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