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Commodities Briefing 20.Oct 2011

Posted on 20 October 2011 by VRS |  Email |Print

Michael DunnThe Commodities Futures Trading Commission (CFTC) voted to approve controversial measures designed to rein in commodity speculation. The new rules, part of last year’s financial-reform law in the US, will limit the positions that traders can take in commodity futures and swaps.
The rules apply to 28 commodities, including wheat, gold and oil. For commodities that are about to be delivered, the limit was set to 25% of deliverable supply; for contracts with a later delivery date the limit will be 10% of open interest……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Mark Hoban The Markets in Financial Instruments Directive – better known as Mifid – does not have the snappiest of names but it does have bite. In the next 24 hours, Brussels is expected to use the directive to curb the appetite of commodity speculators and restrict the “high frequency trading” that was blamed for the 2010 “flash crash” on Wall Street.
City minister Mark Hoban has already made clear that the UK will not tolerate protectionist measures from Brussels. Elements of Mifid, though, could be welcomed in some quarters……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Fund managers have turned negative on commodities for the first time in more than two years amid fears for the world economy - with some seeing falls in raw material prices as a key risk.
A poll of investment managers, looking after a total of $739bn, revealed that more were now underweight than overweight in commodities for the first time since February 2009……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

On Friday UBS made a big switch in its investment view on commodities and commodities stocks and the investment banker made it clear it wasn’t joking, issuing multiple documents and strategy advisories to its clientele across the world. The move would have caught many an expert’s attention as, unlike peers at Goldman Sachs and Macquarie for example, UBS had been negative on commodities all year.
What makes UBS’s switch even more remarkable is that “economic growth” inside or outside China does not feature prominently in any of the motivations to explain the change. So what does?………………………………………Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

The broad commodity space has realized significant gains over the past several years. Not surprisingly, a proliferation of interest in hard assets and commodity investments followed by both investors and product providers.
Commodity demand has been driven to a large degree by a number of economic and political developments. Historically, commodities have been found to provide several portfolio level benefits: They have provided diversification away from the correlation of traditional asset classes and have served well as an inflationary hedge……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Gold may climb to $1,800 an ounce next month before sliding as commodities drop and some investors sell to cover losses in other assets, said John Taylor, founder of FX Concepts LLC, the world’s largest currency hedge fund.
The metal may reach between $1,750 and $1,800 by late November, said Taylor, who in July correctly predicted that bullion would touch $1,900 an ounce by this month. Prices may then slide to between $1,000 and $1,200 by April or May, where it would be a “big buy,” he said……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Gold is now existing in ‘two states’ at the same time as in quantum physics: greed and and fear both battling for attention, Austin Kiddle of Sharps Pixley, London said in a note.
In the world of quantum physics, it is accepted that a cat can both be dead and alive at the same time. The cat example has been used to illustrate the condition in quantum mechanics of which an item can be shown to be in two difference states at the same time……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

The general return of confidence in the U.S. dollar has cut demand for gold as a hedge against a collapse in the U.S. currency, but economists at Capital Economics said they don’t expect that to hold back gold for much longer — and investment demand should help boost silver too.
“The monetary policy backdrop is highly favorable” for gold, they said in a quarterly report issued Tuesday……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Silver, the best-performing and most-volatile precious metal of the past year, may rebound from a bear market as investors bet on growth in developing nations and an extended European debt crisis.
The metal may average $38 an ounce this quarter and rise to a record $42 by the final three months of 2012, compared with $31.245 at 7:48 a.m. in Singapore today, according to the median in a Bloomberg survey of 11 analysts. The gains will mean record profit for producers Pan American Silver Corp. and Fresnillo Plc, analyst estimates compiled by Bloomberg show……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Jumps in oil prices, which led some countries to withdraw crude from stockpiles earlier this year, are less likely as economic growth slows and Libyan fields resume output, said David Fyfe, the head of the International Energy Agency’s oil-industry and markets division.
“There is not the same potential for economically damaging spikes in price in the fourth quarter that we saw in the third quarter,” he told reporters today during the agency’s annual ministerial meeting in Paris……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Iran has been recognized as the second major oil exporter of the Organization of Petroleum Exporting Countries, Iranian OPEC Governor Mohammad Ali Khatibi says. The volume of Iran’s oil exports reached 2,583,000 barrels per day in 2010, which makes the country OPEC’s second major exporter after Saudi Arabia, Khatibi said on Wednesday.
The Iranian official added that by exporting 2,464 million barrels per day in 2010, Nigeria is OPEC’s third major oil exporter, Shana reported……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

The International Energy Agency (IEA) broadened its cooperation with South Africa, Russia and India this week with agreements on energy security and efficiency. China, however, is notably absent from the list.
The world’s biggest energy consumer sent an envoy to a ministerial summit yesterday at the IEA, which represents the energy interests of 28 industrialised nations……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

The world is headed for a “dire future” where high energy prices drag on economic growth and global average temperatures rise by more than 3.5 Celsius unless significant innovations to lower the cost of clean energy and carbon capture technology, said the International Energy Agency Wednesday.
Speaking at the conclusion of a two-day meeting with international energy ministers and business leaders in Paris, senior officials from the agency painted a gloomy picture of the world’s current trajectory……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Mounting worries about Europe’s debt crisis, a persistently weak U.S. jobs market and less-than-encouraging guidance from the Federal Reserve have been weighing on investor sentiment, weakening oil prices to around $85 a barrel.
Apprehensions about high U.S. crude stocks, the release of emergency oil supplies from government-held strategic reserves into the world market, and uncertainty over oil supply disruptions in the Middle East have added to the negative sentiment……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

The Securities and Exchange Commission launched a broad, agency-wide review of exchange traded funds on Wednesday, and individual investors may be wondering if they should be worrying about, or avoiding, ETFs now.
The SEC unveiled its plans at a Senate subcommittee hearing amid complaints that the $1 trillion ETF industry is fueling market volatility and creating risks for small investors……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Slowing global economic growth and the passage of a new rule designed to curb speculation in commodities futures were pressuring exchange traded products that follow the price movements of copper and silver, two key industrial metals, on Wednesday.
Silver and copper funds led the decline in metals Wednesday. The iShares Silver Trust was down 3.5% at last check and iPath Dow Jones- UBS Copper Sub-Index Total Return ETN shed 4.7%……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Precious metals ETFs for example are considered the less complicated of the choices when taking into consideration investing in gold. Its significant attribute is that you simply do not own genuine physical gold, but only a percentage of what the stock represents on the market.
Below are a couple of charts showing exactly where these commodities are trading. That being said August by means of year end have been consistently strong for trading gold and gold ETFs……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Global asset allocators turned the most bearish on equities and commodities since 2009 as Europe’s debt crisis prompted investors to once again raise cash levels, a Bank of America Corp. survey showed.
A net 7 percent of the 286 respondents, who together manage $739 billion, said they were “underweight” stocks this month, compared with 5 percent in September, according to a survey from Bank of America’s Merrill Lynch unit……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

Citigroup Inc. is purchasing higher-yielding currencies before a resolution to the European debt crisis, citing a long-term lack of dollar demand.
The U.S. currency’s rally in September was driven by the safety appeal of Treasuries rather than other U.S. assets, signaling an inherent weakness in the greenback, according to Steven Englander, head of Group of 10 currency strategy at Citigroup Inc. in New York……………………………………….Full Article: Source

Posted on 20 October 2011 by VRS |  Email |Print

The world’s four major green investment groups representing $20 trillion in funds have hailed Australia’s carbon tax as a boon for investors, strongly backing the government’s claim that the scheme will deliver economic benefits.
The report, commissioned by groups representing 285 pension funds and other institutional investors around the globe, found that Labor’s carbon price and financial assistance for green technology ‘’should provide investors with real confidence” in investing in renewable energy in Australia……………………………………….Full Article: Source

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