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Commodities Briefing 02.Nov 2011

Posted on 02 November 2011 by VRS |  Email |Print

Interest in commodities as an asset class has grown tremendously over the last decade. In the mid-1990s, you may be hard-pressed to find an adviser who would recommend an allocation to commodities. Today, advisers may recommend an allocation - if not to commodities as a broad asset class, then to particular assets and themes such as energy and gold.
As the term implies, commodities refer to raw materials that are used in the production of almost everything that we need for daily living. The most prominent investible segments include oil, gold and silver, as well as agricultural resources. The broad commodity types include energy, metals and agriculture………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

George PapandreouCommodities fell to a one-week low, led by industrial metals, amid concern that Europe’s bailout of Greece will be derailed, while manufacturing in China slowed.
The Standard & Poor’s GSCI index of 24 raw materials slumped 1 percent to settle at 641.69 at 3:46 p.m. New York time. Earlier, the gauge touched 627.96, the lowest since Oct. 21. In London, nickel tumbled 5 percent, while aluminum, lead and zinc fell more than 4 percent………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

MF Global Holdings Ltd, which filed for Chapter 11 bankruptcy in the United States on Monday, has some energy and commodities clients in Europe mostly via its UK unit MF Global UK Ltd.
The U.S. brokerage, led by ex-Goldman Sachs GS.N boss Jon Corzine, failed to protect customer accounts by keeping them separate from the firm’s funds………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

Credit Suisse reported a slump in commodities trading revenues in the third quarter, failing to repeat its success of the previous quarter, as it drastically cut risk exposure in a move similar to performance by many U.S. and European peers.
Some of the biggest price drops in years hit commodities markets in the third quarter as worries about the European debt crisis escalated and the dollar surged against the euro………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

Commodities are a fairly well-known investment theme. There are quite a few ways to participate, however. Each vehicle will carry market risk which is generally linked to fundamental demand and supply issues as well as investor interest. But quite apart from these, there are also risks and benefits that arise from the vehicle itself. Here are some vehicles.
Commodity-related stocks: These typically span a broad range including mining and agricultural stocks, for example, as well as companies that provide supporting infrastructure including logistics, and upstream and downstream products………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

“This is what a market bottom in copper feels like,” I told Brett Eversole on October 20. Brett has worked right next to me for over a year… And he’s never heard me say that before. The last time I said anything like that was in late 2008, and I made a triple-digit return…
The last time I bought a handful of commodities companies was in late 2008 – because that was the last time it felt like a bottom to me in commodities. I sold all those commodity companies in January 2010, for a double or more………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

The most accurate forecasters say gold will rebound from its biggest monthly plunge since 2008 and reach a record by March because economic growth is stagnating and Europe’s debt crisis is unresolved.
Futures traded in New York may rise 14 percent to $1,950 an ounce by the end of the first quarter, according to the median of estimates compiled by Bloomberg. The predictions are from eight of the top 10 analysts tracked by Bloomberg over the past eight quarters. Two declined to give forecasts………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

The Greek referendum decision has thrown financial markets back into turmoil and not uncharacteristically gold initially stoically stood its ground and pondered - rarely shaken by sudden news as it is. Another interpretation is that gold has some large and powerful forces acting upon it which are presently cancelling each other out.
Those forces are phenomenal flows of investment money into gold reflected by a surge in demand for ETFs and physical bars on the one hand - and the negative impact on gold from a stronger dollar (the corollary to a weaker Euro on the freshly announced Greek referendum). ……………………………………….Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

A distinct allocation to gold within a portfolio including alternative assets such as private equity, hedge funds, real estate and commodities, can preserve capital and reduce risk without diminishing long-term returns, concludes the latest research from the World Gold Council.
The report, Gold: Alternative investment, foundation asset, analyses the effect gold has when included in a portfolio of mainstream and alternative assets. The research shows that portfolios with an allocation to gold of between 3.3% and 7.5% (depending on the risk tolerance of the investor and the currency of reference) show higher risk-adjusted returns………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

COMEX Silver prices have surged in the past few days. With silver futures still under pressure from the uncertain investors, the Death Cross comes again to test silver’s resilience.
Investopedia defines a Death Cross as a crossover resulting from a security’s long-term moving average breaking above its short-term moving average……………………………………….Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

As of Oct. 27, gold spot prices were hovering around $1,747 per ounce. Platinum, on the other hand, was selling for about $1,636 an ounce. This means it takes just 0.93 ounces of gold to buy an ounce of platinum. Or, from another perspective, you could trade in one ounce of gold for 1.07 ounces of platinum.
It’s not so much the size of the gold premium that matters — the very existence of a premium is highly unusual. In fact, gold hasn’t been worth more than platinum since 2008. Before that, you have to go back to January 1992 to see the last time the yellow metal traded this far above parity to the white one………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

Investors now need to look beyond the traditional safe haven and book profits with less-expensive metals, according to some analysts. Silver demand is set to zoom in India as investors shy away from the costlier yellow metal.
India, the world’s largest importer of silver is expected to import 250-300 tonnes of silver during the present quarter, according to Prithviraj Kothari, President of the Bombay Bullion Association………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

Oil prices at $100 a barrel in New York would not be sustainable given the state of the global economy, according to the former executive director of the International Energy Agency.
Oil stockpiles may not need to be tapped as slow growth limits global demand from most economies, Nobuo Tanaka, who left his post at the Paris-based energy agency’s helm in August, said today at a conference in Singapore………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

Iran is happy with current oil prices above $100 a barrel, its oil minister said on Tuesday, despite warnings from the West on the impact on the world economy and a preference for softer prices from fellow OPEC producers in the Gulf.
OPEC, which controls a third of global oil production, will meet in December for the first time since June, when its meeting broke down after Gulf producers failed to convince other members to lift production to compensate for the loss of Libyan output………………………………………..Full Article: Source

Posted on 02 November 2011 by VRS |  Email |Print

Compare Japan’s agony to China’s ecstasy. China’s boom during the past two decades has been predicated on a currency that has been, largely through government control, very weak. In fact, the renminbi has been so weak that in recent years, the Chinese have been able to manufacture products more cheaply than just about any other country in the world.
The ‘China price’ has been one that mature economies have been unable to match. As such, we have witnessed one of the greatest international transfers of wealth of all time, as most of the world’s manufacturing has moved lock, stock and barrel from the developed world to China………………………………………..Full Article: Source

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