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Commodities Briefing 06.Oct 2011

Posted on 06 October 2011 by VRS |  Email |Print

Commodities rebounded from the lowest in 10 months after Federal Reserve Chairman Ben S. Bernanke said that the central bank may take further steps to sustain an economic recovery.
The Standard & Poor’s GSCI index of raw materials rose 2.8 percent to settle at 592.03 at 3:48 p.m. New York time, the biggest gain since Sept. 27. Energy and agricultural prices led the rally. Crude oil had the biggest increase since May, while wheat advanced the most in two months……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

The unprecedented commodity price volatility of the past four years has led to a surge of interest from governments in risk management strategies. Investment banks are in talks with sovereigns worldwide on setting up financial hedges, and say uptake is booming, while the IMF and World Bank are providing advice and training.
Many countries have been plunged into financial chaos by commodity price swings, yet sovereign commodity risk management still lags behind the practices of the corporate world……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Commodity prices enjoyed a sharp bounce Wednesday, but the recent bearish trend is far from over amid growing prospects for a global slowdown.
Oil prices rebounded more than 5% to $79.68 a barrel, a day after settling at the lowest level in over a year. Investors were somewhat encouraged Wednesday by a government report that showed crude inventories surprisingly fell by 4.7 million barrels last week as well……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Current global monetary policy in the US and Europe continue to point to an ultra-easy stance that could be the underpinnings of a commodity supercycle. To further evaluate where specific financial markets stand within the current economic environment, many have looked at commodity prices through wave theory to determine if a supercycle is likely.
Wave principal incorporates cyclical and secular movements in financial markets in an effort to capture the overall psychology of the investor community. Cycle analysis has played a significant role for investors in determining the future direction of financial assets over the past century……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

According to the estimates UBS has pieced together, roughly two-thirds of revenue growth for companies in the S&P 500 in the second quarter was down to commodities price swings and a combination of the weaker dollar and non-US sales growth.
But given the unpredictability of commodities prices — which have declined alongside the prospects for global demand — UBS are suggesting that such a contribution can’t be relied on in the future. We hasten to agree……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Commodities continue to be hammered by financial market turmoil and risk aversion among investors. Commodity fundamentals may be stronger now than before but if a recession were to materialise, a further crash would occur.
“However the downside compared with 2008/09 would be much smaller, in our view, partly because prices would be falling from less lofty heights, but also because of robust cost suport levels in many markets and a significant expansion in the emerging market share of commodity demand in the past few years,” according to an analysis by Barclays Capital……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Corn, wheat and gold will beat other raw materials this quarter as crop yields drop and Europe’s debt crisis stokes demand for bullion, said David Hemming, who helps oversee a fund that returned 20 times the average this year.
Corn may rally 19 percent to $7.25 a bushel, wheat may climb 19 percent to $7.50 a bushel and gold may gain 13 percent to $1,850 an ounce by December, said the London-based fund manager for Hermes Investment Management Ltd……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Aluminium may prove a better investment than copper, says CRU- the commodities research specialists, also adding that China may no longer be the driver of commodity prices like it has once been.
“China funded our recovery in the commodity world … China has been the commodity story. We don’t believe it can step in and give the commodity markets the recovery it saw in 2008 … (China is) overall positive but not fantastically positive …Chinese growth rates remain healthy but at lower rates”, says Paul Robinson, Group Manager of Non Ferrous Metals at CRU………………………………………Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

The International Monetary Fund (IMF) said Wednesday that the latest global economic and financial crisis presents a range of challenges to Latin America which generally has sound macroeconomic fundamentals.
“Downside risks are significant, with some countries more vulnerable than others,” the Washington based global lender said in its latest Regional Economic Outlook for the Western Hemisphere……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Latin American policy makers must be prepared to use interest rate cuts and consider fiscal measures to protect their economies in the event that the global economy stalls, the International Monetary Fund said.
Should recessions in Europe and the U.S. materialize and spill over to Asia, commodity producers in the region may face a “triple shock” from weaker terms of trade, declining exports and tighter global credit markets, the Washington-based lender said………………………………………Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Crude oil completely broke down in September, falling more than 10% as investors re-priced the new normal of lower growth and possible recession across several asset classes.
But underlying fundamentals will put a floor on oil’s possible fall, as producers rebalance supply and demand to keep the market tight, JPMorgan’s commodities research team says……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

The decline in Opec’s oil below $100 a barrel for the first time since February is raising the likelihood the group will cut output, as Libya revives output and the global economic recovery falters.
The Opec basket of crudes fell to $98.59 yesterday, down 18 per cent from its highest level this year and within 2 percentage points of the 20 per cent drop that’s deemed a bear market. Brent oil tumbled 21 per cent from its April high and New York crude 34 per cent……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

The decline in OPEC’s oil below $100 a barrel for the first time since February is raising the likelihood the group will cut production, as Libya revives output and the global economic recovery falters.
The Organization of Petroleum Exporting Countries’ basket of crudes fell to $98.59 yesterday, down 18 percent from its highest level this year and within 2 percentage points of the 20 percent drop that’s deemed a bear market. Brent oil tumbled 21 percent from its April high and New York crude 34 percent……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

OPEC countries which boosted oil production to compensate for the loss of Libyan supply earlier this year must reduce output as Libya returns to world markets, a senior Iranian oil official said on Wednesday.
Iran’s OPEC governor, Mohammad Ali Khatibi, said the continuing global economic crisis would have a negative effect on oil demand……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Brent oil will struggle to recover from its longest slump since the 2008 financial crisis as a weakening global economy cuts growth in demand to the lowest level for any fourth quarter in the past three years.
Brent crude will trade an average 2 percent higher than Oct. 5’s opening price of $101.81 a barrel during the final three months of the year, according to the mean prediction of 10 analysts whose third-quarter projections were the most accurate of 31 compiled by Bloomberg. Futures lost 8.6 percent in the third quarter, extending a 4.2 percent drop in the second……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Beijing becoming host to Asia’s first automatic gold vending machine - in a continent where millions are yet to see the variety that spews paper cash and potato crisps - offers the latest indication of China and India being world’s leading gold buyers, despite record fluctuating prices mid-September.
Year-on-year consumer demand for gold in 2010-2011 grew 38% in India and 25% in China, compared with a 7% worldwide growth of gold sales……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Will Silver go up or down and if so why. Many investors may have been looking for clues as to where silver might be headed.
The Commitment of Traders (COT) released by the CFTC is an excellent indication that can give an investor a good idea of where prices might be headed………………………………………Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Gold has risen for a fourth day as investors bargain-hunt and safe haven buyers continue to accumulate. The flight to cash trade seen recently, due to margin calls and sharp losses in other markets, appears to be over.
Gold’s resilience Monday and Tuesday, despite sharp falls in equity markets on deepening concerns of banking and sovereign contagion, is impressive. Physical bullion buyers remain focused on gold’s long-term fundamentals and its value as a safe haven asset……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

South Korea’s metals stockpiling agency plans to launch a physical copper exchange-traded fund in the fourth quarter, the latest effort to create a simple-to-use vehicle for the metal that would appeal to a wide range of investors and the first of its kind in Asia.
The fund, to be listed on the Korean Exchange, would be managed by Korean asset-management company Mirae Asset MAPS Global Investments. If it is a success, Korea’s Public Procurement Service will roll out ETFs for other base metals such as aluminum, nickel and zinc……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

With the look of a mutual fund and the flexibility of a stock share, the exchangetraded fund (ETF) has captured an increasing segment of Canadian online investment portfolios.
Representing a basket of assets containing anything from stocks and bonds to commodities, ETFs allow investors to diversify their risks. Of particular interest to retail traders, ETFs can be bought and sold throughout the trading day - unlike mutual funds, which can only be traded at close……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

The commodities sector has been the best performing major class over the last decade and has seen its biggest boom during this century. Despite the collapse in the price of natural resources during the 2008 financial crisis, the price of gold has risen steadily for nine consecutive years, according to Man Group’s latest paper on commodities.
It is not surprising that commodities is one of the most favorite asset classes amongst investors and fund inflows into the sector have jumped, particularly in gold, oil, natural gas, industrial metals and agriculture……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

After checking finviz.com, I was able to identify 5 stocks that are poised for big profits in 2012. They may not be the most well-known stocks, but they each have strong opportunities for major growth. Let’s see what is driving these medium-term opportunities:
ATP Oil & Gas Corp. (ATPG) has had high levels of short interest, but there is good reason to look to this position as a slightly longer-term investment. ATPG is currently trading at $6.65, but its one-year target estimate is expected to exceed $16.40 per share……………………………………….Full Article: Source

Posted on 06 October 2011 by VRS |  Email |Print

Benedicte Gravrand, Opalesque Geneva: ABN AMRO Clearing, a global securities services provider, hosted the Amsterdam Investor Forum on 14 September, which focused on opportunities and challenges in investing in the commodity and alternative areas. It attracted up to 200 attendees, many of them high-level investors from the Netherlands and other parts of Northern Europe.
PIMCO: The state of commodity index tracking Commodities have been used as a speculation tool quite some time, as futures markets, which were commodity-based, date back to the 1800s. However, since the 70s, they have been a tool for index tracking, index beating, inflation protection and diversification. Financial derivatives now account for 75% of commodity trading……………………………………….Full Article: Source

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