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Commodities Briefing 26.May 2011

Posted on 26 May 2011 by VRS |  Email |Print

Angel GurriaThe global economy is projected to expand by 4.2 per cent this year, but rising oil and commodity prices and European debt crisis could hurt the overall recovery, according to Paris-based think-tank OECD.
The expected growth of the world economy is much lower than the 4.9 per cent rate achieved in 2010.
In its semi-annual economic outlook released today, the Organisation for Economic Cooperation and Development (OECD) said the global recovery is becoming self-sustained and more broad-based……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Ric BattellinoThe commodity prices boom fuelling Australia’s economy is being driven by a strengthening global economy and is likely to continue for some time, a central bank official says.
Reserve Bank of Australia (RBA) deputy governor Ric Battellino on Thursday dismissed any notion of a commodity price “bubble”. “The word bubble is a very emotive term,” Mr Battellino told the 2011 Annual Stockbrokers conference……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Outgoing Bank of England Monetary Policy Committee member Andrew Sentance has said that the MPC cannot ignore rises in commodity prices and warned that last week’s correction in crude prices was probably just a blip on an upward trend.
In his last speech as an external member of the MPC, Sentance told an audience in Jersey that high commodity prices could feed into wage bartering and price-setting and hinted that the MPC should move to increase the value of sterling to combat imported inflation……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Precious metal and commodity prices moved higher in trading yesterday, on the back of Goldman Sach’s bullish pronouncements on crude oil and dovish comments from a senior US Federal Reserve official.
As per normal whenever commodities come back into vogue among the world’s traders, silver had a particularly strong day – the silver price on the May Comex contract settling up by $1.22 (3.5%) at $36.121 per troy ounce. The May gold contract moved up by $7.90 (0.5%), settling at $1,523.20……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

It had all the makings of Aditya Birla group’s fourth acquisition in five months in commodities. Until Australian miner Whitehaven scrapped a plan to sell the business as attractive valuations weren’t coming its way.
But it didn’t take too long for chairman Kumar Mangalam Birla to spot another opportunity for inorganic growth in the business of coal mines. The $30-billion metals-to-telecom conglomerate is one among three Indian business groups to be shortlisted for a second round of bidding for the coal mines of Bandanna Energy in Australia……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

LTN say’s Buy Commodities… Shayne and I believe that the risk-reward now favors going Long commodities, as economic is likely enough to tighten Key supply constrained markets in 2-H of this year, leading to higher prices from here.
I suggest buying Crude Oil, Copper and Zinc and I see Brent Light Crude Oil gaining about 18% from here. . Standard & Poor’s GSCI index of 24 raw materials climbed 0.6% as of 2:35 pm in Tokyo, after yesterday 1.7% decline……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Resourcehouse Ltd., the Australian coal and iron ore miner that is currently raising up to US$3.6 billion in its fourth attempt at an initial public offering in Hong Kong, is delaying its listing in the city by a day, a person familiar with the situation said Wednesday.
It wasn’t immediately clear why the timetable for the sale was extended. But the decision comes as shares in commodities giant Glencore International PLC closed 2.5% lower on their Hong Kong debut, after trading almost 1% from the IPO price in London on Tuesday……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

The U.S. Department of Energy reported this morning that in the week ending May 20, 2011, U.S. crude oil inventories increased by 0.6 million barrels, while gasoline inventories increased by 3.8 million barrels, distillate inventories decreased by 2 million barrels and total petroleum inventories increased by 6.8 million barrels.
Crude oil prices rallied after the report, with Brent nearing $115/barrel, while WTI briefly surpassed $101/barrel. But recent price action does not seem related to these inventory movements……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Iran’s OPEC governor acknowledged on Wednesday that there was a shortage of supply in the global oil market, saying OPEC was acting to balance the market and would continue to do so.
“OPEC is trying to compensate part of the shortage of supply of crude and create a balance in the market and in the future OPEC will continue to do its onerous duty which is to create balance in the market,” Mohammad Ali Khatibi was quoted as saying by the semi-official Mehr news agency……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Commodities climbed for a second day, and gains in energy and metal producers helped the U.S. equity market snap a three-day slump, amid speculation recent price declines were excessive as demand improves. Five-year Treasuries rose as a $35 billion sale drew the strongest demand since 1994.
The Standard & Poor’s GSCI Index of commodities rallied 1.7 percent at 4:18 p.m. in New York. The S&P 500 increased 0.3 percent to 1,320.47, rebounding from a one-month low……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Copper climbed more than 2 percent on Wednesday, on buying spurred by recent bullish investment bank outlooks amid mounting evidence of a production short-fall this year.
Macquarie Bank’s removal of its short-term sell in copper a week ago and Goldman Sachs’ recommended long position this week seem to back what many long-term bulls have been betting on — that supply growth in 2011 will fall well short of rising global demand……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Last month Goldman Sachs became much more pessimistic in regard to commodity prices, and advised investors to take profits. However, yesterday the US bank revised its outlook for some important commodities upwards again – notably crude oil, zinc and copper. Commodity prices have risen in response, as have the shares of oil, gold and base metal producers.
Goldman bases its revised outlook on its expectations of increases in global growth. In its view, rising global demand for important commodities could lead to supply bottlenecks in the second half of 2011, which will likely result in higher prices………………………………………Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

With stronger balance sheets, improved credit availability and stabilizing metal prices, PwC Tuesday forecast the recovery in global metals M&A is expected to continue for this balance of this year.
Iron ore targets were the primary driver of global metals M&A activity during the first quarter of 2011, contributing almost 40% of the deals worth a total of $5.1 billion, a significant increase over full-year 2010 when iron ore represented only 20% of total deals……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Gold prices have taken out resistance at $1519.55, the 50% Fibonacci retracement of the drop from the May 2 high. From here, the bulls aim to challenge resistance at the 5/11 high ($1526.60), a barrier reinforced by the 61.8% Fib at $1533.12.
Broadly speaking, anything shy of a daily close above the latter threshold keeps the overall structure of the ascending triangle carved out over the past three weeks intact, pointing to bearish continuation. If a bullish breakout does materialize however, the 76.4% Fib at $1549.91 will stand as the last barrier before a run at the 5/2 swing high at $1577.05………………………………………Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Gold experts say the precious metal could rise to US$1,600 an ounce this year as investors seek refuge from a flagging global economy and weakening major currencies.
Tanarat Pasawongse, the managing director of Hua Seng Heng Gold Futures Co, predicts the price will soon test $1,525 an ounce with a high of $1,600 for the year……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

In the wake of rising silver prices, scrap silver processing and recycling industry is shining these days. Scrap silver processing industry is indeed booming after the recent spike in prices of the white metal to record $50 levels.
Scrap silver is indeed serious business for the industry. At one end, investors and speculators are stockpiling a growing share of global supply via new silver exchange-traded funds and bullion coins. And at the other end traders and consumers have been busily recycling anything and everything which has got some speck of silver in it……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

The silver market is still reeling from its fall from $50 to $34 over a very short time. The move was driven by at least one investor selling around 1,000 tonnes of silver over a two week period. Silver had climbed quickly from around $25.
The charts supported a rise to $29, but as silver went higher, it climbed out of technical range into new territory. All the time thereafter it was vulnerable to a selloff back to support around that level……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Irrespective of age and risk-profile, one should have at least 10% allocation to gold. Gold is a precious metal and will always remain in short supply. If you are planning to invest in gold and looking for the best ways, here we will discuss the ways and conclude.
These days gold as an asset class is famous rather than holding it in physical form. The main advantage of holding gold online is there is no scope for theft and depreciation……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

Investors in exchange traded products have deserted agricultural commodities at a pace not seen since at least 2009 this month, but the exodus may be reversible.
The net outflow from farm commodity exchange traded products (ETPs) has already reached $600m for May, shrinking the total invested in the asset class to $7.8bn, Societe Generale said……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

It’s not quite a mass stampede into pork bellies, but retail investors in India are increasingly venturing into the commodities markets, buoyed by a surge in prices that has outstripped returns from stocks.
While the growth has the potential to be explosive, trade in commodities comes with a warning—policy flip-flops that can be injurious to your financial health……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

For some of the world’s biggest hedge funds, gyrating currencies have so far made 2011 a frustrating year. So-called macroeconomics funds, which make wagers on currencies and global economic events, were down 0.8% on average in the year to May 19, according to hedge-fund research firm HFR, with a 3.1% loss this month.
And “systematic” macro funds that use computer programs to jump on market trends have given up 4.5% since Dec. 31. By contrast, hedge funds in general have returned 1.7%. Investors who bought U.S. blue-chip stocks instead of hedge funds have gained about 7%……………………………………….Full Article: Source

Posted on 26 May 2011 by VRS |  Email |Print

The New Zealand dollar rose against most major currencies, after commodity prices and equities snapped their recent streak of declines.
Global commodity prices kicked off the relief rally, with the Thompson Reuters Jefferies Index, a measure of 19 hard and soft commodities, gaining 1.6% to 344.44, with oil prices leading the charge……………………………………….Full Article: Source

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