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Commodities Briefing 25.Oct 2011

Posted on 25 October 2011 by VRS |  Email |Print

Commodities surged, led by copper, nickel, lead and oil after a report showed manufacturing probably expanded in China, the world’s top metal consumer and the fastest-growing user of crude.

The Standard & Poor’s GSCI Index of 24 raw materials gained 2.4 percent as copper rose to the biggest two-day rally since January 2009 and oil futures in New York increased to the highest level in 11 weeks. Commodities also rose after European governments moved closer to containing the region’s debt crisis………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Stephen StanleyThe biggest rout in commodities since the global recession may be a sign that the fastest U.S. inflation in three years is peaking. The Standard & Poor’s GSCI Index of 24 commodities entered a bear market last month after sliding more than 20 percent from a two-year high in April, on concern that slower growth will cut demand.
A slump in the gauge from a 2008 record preceded a drop in inflation, while a 2009 rebound caused the consumer price index to climb. Raw materials fell 12 percent in September as the CPI rose 3.9 percent from the same month a year earlier, the most since 2008………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Commodity investments have fallen in consecutive quarters for the first time since 2008, suggesting that investors are expecting the worst. Amid concerns for global growth and volatile financial markets, total assets under management fell to $393 billion (c£246.4 billion) at the end of the third quarter, from $408 billion at the end of the second quarter, according to Barclays Capital.

Indeed, the quarter marked record volatility for the sector, with $9 billion inflows in July - the highest since December 2010 - followed by the largest-ever monthly outflow of $10 billion in September………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

While maintaining a Gold price target of $1875/oz for Q4 2011, Barclays says that even though gold fundamentals are positive on the macro outlook, the need for liquidity and risk aversion will set the tone for the near term. Gold prices are expected to find selling pressure in the $1700 area.

Gold prices are expected to average $2000/oz in 2012………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Harmony Gold sees the price of the commodity to average close to the record spot highs of September in 2012, but doesn’t bank on its peers’ views of sustainable prices north of $2,000/oz. Releasing its annual report for the 2011 financial year on Monday, Harmony said it was expecting the gold price to be around $1,850/oz in its next financial year, as gold continued to entrench its function as a store of value and a currency.

“Our belief in gold remains steadfast and we are forecasting continued high dollar prices in our next financial year, especially given a weaker dollar and global economic uncertainty,” CEO Graham Briggs wrote in his review………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Gold price is expected to average $1875/oz in Q4, 2011 as the physical gold demand continues to cushion prices before investment demand takes off. Even though the volumes have softened, gold bar premiums in Asia is pretty high, indicating the strong demand for physical gold.

The G-20 nations asked Europe to formulate a plan to resolve the debt crisis within October 23. And this looks unlikely since many key issues are yet to be fully defined………………………………………Full Article: Source

Posted on 25 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 25 October 2011 by VRS |  Email |Print

Gold imports by India, the world’s largest bullion consumer, may decline by as much as 30 percent this month as higher prices weaken demand during the main Hindu festival of Diwali, according to an industry group.

Imports may be 70 metric tons to 80 tons compared with 100 tons a year earlier, Prithiviraj Kothari, president of the Bombay Bullion Association, said by phone. Purchases on the auspicious gold-buying day of Dhanteras today have been slow as prices are almost 40 percent higher than last Diwali, he said………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Speculators continue to reduce their bullish exposure to U.S. gold futures and options as prices slipped, according to U.S. government data released late Friday.

Figures from the U.S. Commodity Futures Trading Commission showed that speculators in both the disaggregated and legacy Commitments of Traders reports cut the net-long positions in futures and options for gold on the Comex division of the New York Mercantile Exchange for the week ending Oct. 18………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Citigroup Inc.raised its gold and silver forecasts for 2012 and 2013, citing expectations of increased resilience in both metals amid a “high probability” that the macroeconomic and financial factors that have propelled prices over the past three years will continue for the next 12-18 months.

The bank now sees gold averaging at $1,950 a troy ounce in 2012, compared with $1,650/oz previously forecast, and sees a 2013 gold price of $1,745/oz, up from $1,500/oz………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

India’s Gold import could rise by 30-40% y/y in Q4 as consumers become more comfortable with prices at lower levels and with lower volatility. “Silver imports by India — the world’s largest bullion consumer– may rise by 50% y/y in Oct-Dec quarter to 250-300 tonnes taking total imports for the year in excess of 4000 tonnes.” stated Prithviraj Kothari, president of the Bombay Bullion Association.

Longer term investor interest has stabilised across the precious metals with gold holdings edging lower by a modest 0.2 tonnes while metal held in trust across Silver and the PGMs was unchanged on Friday, reported Barclays Capital………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Silver prices may rebound from its current bear market which has caused a decline of almost 40%. Silver fell from its May high of near $50 and is currently trading around $30.

Silver prices are expected to gain on the worsening European debt crisis and disappointing growth in developed economies. The Chinese factor will prove crucial as the country is expanding at 5 times US growth and has been a top consumer of silver………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Copper fell by almost a quarter in September but has steadied on optimism that European leaders may soon strike a deal to solve the debt crisis, while expectations for a continued supply deficit should help underpin prices through to the end of the year.

“Copper price moves in the fourth quarter will depend on what happens on the macro front, they will be volatile and we see them in a $7,000-8,000 range,” said a CRU Group copper analyst………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Iraq’s deputy prime minister for energy, Hussain al-Shahristani, said on Monday current oil prices are acceptable for both consumers and producers and that he saw no need for OPEC to cut production at its next meeting.

“Current prices are acceptable for both consumers and producers, and we do not see any impact of the Europe debt crisis on global oil prices,” Shahristani said………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Venezuela’s Energy Minister Rafael Ramirez said on Monday that oil prices at $100 per barrel were “comfortable” for producers and for the world economy.

On Monday, U.S. crude oil CLc1 rose 4.4 percent to settle at $91.27 per barrel. Traders attributed oil’s run-up mostly to China’s manufacturing data for October which, according to the HSBC purchasing managers’ index, snapped three months of contraction………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

The Organisation of Petroleum Exporting Countries (OPEC) will need to maintain or increase its oil production to meet global demand next year, despite concerns about the state of the world economy, the International Energy Agency said.

According to AFP report “There is an ample market for OPEC production at or above current levels” of 30.1 million barrels per day, said David Fyfe, director of the IEA’s market and oil divisions………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

The Organisation of Petroleum Exporting Countries (OPEC) has cut down its forecasts on economic growth for 2011 and 2012 as a result of global economic uncertainties including the ineffectiveness of the United States’ stimulus packages.

The Organisation in its latest publication – OPEC Bulletin, cited the global economic uncertainties as the reason for the downward review of its economic growth forecasts for this year and next year………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

Euro currency futures rallied today (10/24) for a fifth consecutive trading session as the U.S. dollar index declined………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

The European Commission has released details of its plan to create a centralised registry for emissions trading permits by January 2013, and security will be a paramount consideration

The European Commission has released details of its plan to create a centralised registry for emissions trading permits by January 2013, and security will be a paramount consideration………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

The House voted Monday to exclude U.S. airlines from an emissions cap-and-trade program that the European Union plans to impose on all airlines flying to and from the continent beginning next year.

With the legislation, which passed by voice vote, lawmakers joined the airline industry and the Obama administration in opposing the EU Emissions Trading Scheme scheduled to go into effect on Jan. 1. The bill now goes to the Senate, where there is currently no companion legislation………………………………………Full Article: Source

Posted on 25 October 2011 by VRS |  Email |Print

Global CO2 emissions are expected to rise again following the first decrease in over a decade, according to the latest statistics released today by the International Energy Agency (IEA). The report states that due to the 2008-2009 economic crisis global CO2 emissions decreased for the first time since 1990, but a large rebound is anticipated in 2010

While carbon dioxide emissions in developing countries continued to grow in 2009 (+3.3%), emissions of developed countries fell sharply (-6.5%), according to a new publication. Most of the reduction, however, comes from a decrease in the energy consumption due to the 2008-2009 economic crisis………………………………………Full Article: Source

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