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Commodities Briefing 04.Oct 2011

Posted on 04 October 2011 by VRS |  Email |Print

Commodities fell to a 10-month low on increasing concern that stagnant global growth will crimp demand for metals, energy and agriculture.
The Standard & Poor’s GSCI Spot Index dropped 5.38, or 0.9 percent, to close at 585.62, after touching 580.22, the lowest since Dec. 1. The gauge tumbled 12 percent in the third quarter, the most since the final quarter of 2008……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Commodity prices have taken it on the chin in recent weeks. With prices for everything from crude oil to corn and copper falling, the Dow Jones-UBS Commodity Index closed on Friday 14.7% below its end-of-August level.
That brought it to its lowest level since last October. Beyond fretting about the troubled U.S. and European economies, commodity investors worry that Asian demand is slowing……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

The most important fundamental in commodity markets is not supply, demand, inventories or spare capacity but the passage of time itself.
Successful traders learn time is the most important influence on their profits. Not just in the simple sense of picking peaks and troughs but on the cost of holding positions and time’s impact on all the other variables affecting prices (investment in new capacity, demand destruction and stock building)……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

It is all so very simple when we view the big picture. Bankrupt and near-bankrupt Western governments are stealing billions of dollars worth of various commodities from commodity-producers around the world. The evidence goes well beyond merely suggestive — into the realm of absolutely conclusive.
What makes this scenario so unequivocal is that we have the equivalent of “signed confessions” of the crimes these governments are committing. Exhibit “A” is the monetary policy titled with the vile euphemism “competitive devaluation. ” It is the deliberate attempt by governments to destroy the value of their currencies — as fast as possible (i.e. “competitively”)……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

There’s a grain of good news in the ugly market action of the past couple of months. Commodity prices have been falling. The drop in raw material prices no doubt reflects investor gloom about global economic prospects. But that’s only part of the story. There also seems to have been a significant component of speculative excess in commodity prices. How much is hard to determine.
For instance, copper hasn’t just been a key input in the Chinese construction boom, but has been used as a vehicle for skirting bank lending restrictions imposed by the Chinese government……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Agricultural commodities have fallen particularly far in speculators’ affections, with bets on price rises suffering their steepest decline ever, with sentiment in cotton and wheat at its most negative for at least a year.
Managed money, a proxy for speculators, cut its net length in futures and options in the main Chicago and New York crops by one-third to 356,000 contracts in the week to last Tuesday, analysis by Standard Chartered of US regulatory data showed……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Australian exports surged in August on strong demand from China and Japan for commodities such as iron ore and coal, which economists said bodes well for economic growth after a string of patchy numbers in recent weeks.
Buying from Asia for metal ores and minerals through to coke and coal meant Australia posted a seasonally adjusted trade surplus of $3.1 billion in August, the highest since June 2010, compared with a surplus of $1.82bn in July, the Australian Bureau of Statistics said……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

As LME Copper prices tumbled to lows of $7000/tonne, uncertainty is the trend of the market. On the supply-demand side, copper market may be in a deficit of 200,000 tonnes in 2012 and prices could average $9850/tonne next year.
Supply-Mines face prospects of increased worker’s strikes which could severely curtail production. This has been evident in recent strikes at Escondida and Freeport mines. Output has also suffered from snowstorms and other bad weather……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Current copper prices are still quite profitable for copper miners, yielding a 54% profit margin over average world breakeven costs including royalties, depreciation and interest expense, says Scotiabank economist Patricia Mohr.
Recent on-the-ground surveys point to soft orders for China’s copper fabricators in the fourth quarter, though global supply & demand are expected to remain balanced with a slight deficit of 30,000 tonnes, Mohr observed in the recent Scotiabank Commodity Price Index……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

It’s been a tumultuous month or two for gold – and the world’s financial media has taken note. The yellow metal was headline news as its price moved swiftly upward in late August and early September to reach a new all-time high of $1,923.70 on Sept. 6 in New York intraday trading.
Since then, the decline has been even swifter with the price falling at one point on Monday, Sept. 26, by more than $120 an ounce to $1,580 in Asian trading……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Price action closed the week on a mixed note with Silver and Palladium prices losing further ground, Platinum settling unchanged, while Gold edged higher. Over the quarter, gold was the only precious metal to close in positive territory, gaining 8%.
Gold closed 0.6% up at $1623.3/oz on Friday despite the dollar strengthening against the euro to levels last seen in January. Gold has found support on the downside from physical demand ahead of the week-long national holiday in China. Gold prices remain above those of platinum, despite platinum prices closing in on the average cost of production……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Credit Suisse raised its 2012 gold price forecast, saying the clear beneficiary of the uncertainty and dislocations in financial markets has further upside with the crises set to continue.
“Given that many of the factors that have underpinned the rapid increase — most importantly, fears of a global meltdown — remain in place, we expect gold prices to continue to recover over the balance of 2011,” analyst Tom Kendall said in a note……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

So gold is not a “safe haven” any more! - that’s the genius insight many pundits are pushing today.
No one watching gold’s ups and downs over the last decade’s five-fold gains would claim otherwise. But fair’s fair. The price has slumped 11% this month, even as stock-markets and the economic data tanked, making Sept. 2011 the worst month since the wipe-out of Oct. 2008 after Lehman Brothers collapsed……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

More turmoil in Europe over the ongoing debt crisis led investors Monday back into gold and silver ETFs. But will two-days of positive gains be enough to convince traders that a bottom is near after September’s nasty sell-off?
The SPDR Gold Trust (GLD) closed up today by 1.8% and the iShares Silver Trust (SLV) finished ahead by 2%. Miners followed stocks down: the Market Vectors Gold Miners ETF (GDX) slid 1.3% and the Global X Silver Miners ETF (SIL) fell 2%……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Oil started the final quarter of 2011 with a whimper. The benchmark price dropped below $78 per barrel to its lowest level in more than a year, as fears of another recession grew. Oil fell along with broad declines on Wall Street: The Dow Jones industrial average, the S&P 500 and the Nasdaq composite were each down about 2 percent.
Investors are concerned about a pair of recent announcements that point to weaker demand and even lower energy prices this year. Greece, at the center of the European debt crisis, said over the weekend that it will miss its lower spending targets despite severe cost-cutting……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Oil dropped a third day in New York as investors speculated that Europe’s debt crisis will slow the economy and curb fuel demand as crude supplies climb.
Futures slipped as much as 2.2 percent after falling to the lowest settlement in more than a year yesterday. European governments signaled investors may have to take bigger losses on Greek debt and Goldman Sachs Group Inc. cut its forecast for Japan’s economic growth. U.S. crude inventories climbed for a second week, an Energy Department report tomorrow may show. Libya may raise production to more than 500,000 barrels a day by the end of this month……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Possible OPEC supply cuts, the delayed return of Libyan oil and peak winter heating fuel demand may provide pockets of support to benchmark crude oil prices during an otherwise grim final quarter plagued by global growth concerns, CNBC’s weekly survey showed.
U.S. crude futures broke below $80 last week and fell 17 percent in the third quarter marking the worst performance for U.S. crude since the height of the financial crisis in late 2008. In London, ICE Brent crude fell $9.72, or 8.64 percent for the third quarter, the biggest percentage loss since the second quarter of 2010……………………………………….Full Article: Source

Posted on 04 October 2011 by VRS |  Email |Print

Addi Brittnacher is one German willing to pay a Greek ransom to save his way of life.
The 61-year-old retired machine worker is from Saarland, the western corner of Germany wedged beside France and Luxembourg and a region built on coal and steel that became the heart of the European Union’s genesis. His wallet used to bulge with three kinds of cash and an identification card to cross the borders a few hundred meters from his home……………………………………….Full Article: Source

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