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Commodities Briefing 07.Nov 2011

Posted on 07 November 2011 by VRS |  Email |Print

Jim Rogers If you’re heavily invested in commodities then you’d better on the lookout for when this commodities bubble is going to bust. Because it will, and when the bubble busts it will get nasty. No boom in history has gone on forever, regardless of the underlying reasons for the boom in the first place.
Everyone thought that the internet was going to change the world forever, and they were right. But that didn’t prevent the internet boom from busting one fine day in March, 2000. Likewise, although China is fast becoming the world’s most powerful nation, it doesn’t mean that the commodities boom will last forever. Every asset-price boom in history has come to an end, and this one is no exception………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

George PapandreouSpeculators reduced wagers on higher commodity prices for the first time in four weeks on mounting concern that Europe’s failure to contain its debt crisis will slow economic growth and demand for raw materials.
Money managers cut combined net-long positions across 18 U.S. futures and options by 3.9 percent to 798,787 contracts in the week ended Nov. 1, Commodity Futures Trading Commission data show. The Standard & Poor’s GSCI Index of 24 raw materials tumbled 14 percent since reaching a 32-month high in April………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

October 2011 was a month most commodity investors would like to forget. Heightened Euro zone concerns and perceived slowdown in Chinese demand saw prices take a solid beating. Long liquidation and sell-off meant heavy price declines virtually across the commodity spectrum with even the seemingly safe haven assets losing value.
The lack of confidence in the macroeconomic picture did not spare even precious metals including silver and platinum. The ‘dash for cash’ during early to mid-October and stronger dollar abetted the sentiment………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

Commodities market has been fluctuating on the back of the uncertainty over Greek bailout. Most commodities dropped earlier on speculation that Greek referendum would derail the country’s bailout plan and worsen the European debt crisis.
They recovered in the course of the week after the Greek PM scrapped the planned referendum. Interest rate cut by European Central Bank pushed up prices of gold futures and crude oil futures rose to three-month high. However, base metals have remained weak over the week………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

The political shenanigans played out by the Greek Prime Minister this week renewed worries about the health of the European financial system. Mr. Papandreou initially called for a referendum which could have led to Greece rejecting the debt plan agreed to just a few days ago. This could have triggered an unruly default which would have had serious consequences for the Euro area and beyond.
In the end the referendum was scrapped after other European leaders in no uncertain terms told Greece that it was not going to get any more money if the referendum passed and it would effectively amount to a decision on whether Greece would remain in the Euro zone………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

If real U.S. interest rates remain low, Gold eventually may top $2,000 an ounce, says Deutsche Bank. The bank looks for gold to be the most resilient of the precious metals for the time being, since others with heavier industrial uses are held back when global economic growth is under pressure.
“We view tail-event protection such as a break-up of the euro zone as sustaining private-sector demand for gold. Interestingly, despite the strong rise in gold prices this year, gold price gains have under-performed relative to the level of U.S. real interest rates.” the bank says………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

Gold prices will reach the psychological milestone price of $2,000 per troy ounce as early as mid-January, according to an administrator with a high-flying hedge fund.
Tony Hall with Duet Commodities Fund predicted that the price of gold will hit the $2,000 per troy ounce mark by the middle of April 2012 during an interview with Bloomberg. He also predicted the U.S. will avoid a recession, but gold still will gain in value………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

Jim Rogers explains, “Gold will move into a bubble eventually. All long-term bull markets in every asset wind up in a bubble.” Although he predicts a coming bubble, it could be years away. “I fully expect a bubble. Not for a few years but all bubbles look the same. And I hope I’ll be smart enough to recognize the bubble when it comes,” he says.
According to John Williams, economist and editor of Shadowstats.com, for gold to reach its previous real inflation adjusted high, it would have to climb to about $7,000………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

Gold traders are the most bullish in three weeks after hedge funds boosted their wagers on higher prices amid speculation Europe’s debt crisis and slow US growth will spur demand for the metal as a protection of wealth.
Twenty-eight of 32 people surveyed by Bloomberg expect bullion to rise on the Comex in New York next week, the most since October 14 and the second increase in a row………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

The action in the equity markets may have turned tepid in recent times, but activity in commodity futures is picking up helped by rising retail interest in gold and silver. Trading in commodity ‘futures’ contracts is nearly half that of their equity counterparts with precious metals accounting for a sizable chunk.
There is a good amount of retail participation in bullion, say brokers. This is also evident from the fact that smaller gold contracts of 8 gm and 1 gm each (Gold Guinea and Gold Petal) and silver (Mini) have been the main drivers of turnover………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

Silver bugs anxiously waiting for a the next big move in silver could get one soon enough. Goldmoney’s Founder James Turk is out with his next call for the silver price. He believes silver could reach between $60 to $75, “easily,” but wouldn’t put a time period for that target range.
Turk does, however, expect a technical breakout of the silver price from its consolidation to take place sometime in November, which he expects will embolden the bulls to race prices through $50 and to all-time highs. After $50, the sky’s the limit for silver………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

The jump in oil prices in the past year is adding to concern about the economy, according to a draft of the International Energy Agency’s 2011 World Energy Outlook, which also raised its view of long-run prices.
The draft dated July 2011, obtained by Reuters ahead of the publication’s launch next week, assumes nominal oil prices of $114 a barrel in 2015 and $212 in 2035. Last year’s report assumed prices of $104 and $204 by those dates………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

The U.S. likes to fancy itself a place that does everything a bit bigger and better than the rest of the world.And while some of this might just be American bluster, the Yanks have plenty to crow about it when it comes to oil production in recent years.
James Burkhard, the managing director of IHS CERA’s Global Oil Group, said at a Montana Petroleum Association conference that U.S. production of oil increased by 1.2 million barrels per day between 2008 and 2010, reports the Billings Gazette………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

About $140 billion (Dh514.15 billion) worth of engineering and construction contracts have been either awarded by the national oil companies (NOCs) or are planned throughout the Middle East in 2011, according to research conducted by Deloitte, a global consultancy firm.
The research shows that over the next five years, the Middle East will witness strong growth in hydrocarbon production as the world’s dependence on fossil fuels continues………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

Are alternatives a must-have for a properly diversified portfolio, or overpriced and overhyped? Morningstar.com readers have a broad range of opinions on this question, based on their responses to my query in the Alternative Investments forum on the site.
Some Discuss forum participants argued that the alternative products available to retail investors don’t offer much that you can’t get by building a well-diversified portfolio of conventional stocks and bonds. Others, meanwhile, think that alternatives have the potential to improve their portfolios’ risk/reward profiles………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

The World Bank’s 2011 report, State and Trends of the Carbon Market, shows that the international carbon market has grown from $US11 billion ($10.67bn) in 2005 to reach more than $US140bn in each of 2009 and 2010.
Despite recent falls in the carbon price, daily trading volumes continue at high levels, involving credible emission reduction units generated in a wide range of countries and traded by Japan, New Zealand, Norway, Russia and all the EU member states. In addition, South Korea, California and major Chinese provinces are scheduled to commence trading in the period 2012-2015………………………………………..Full Article: Source

Posted on 07 November 2011 by VRS |  Email |Print

The carbon tax will have a vastly bigger impact on productivity, wages and the cost of living than “highly optimistic” Treasury calculations indicate, claims the Minerals Council of Australia.
The council will today release modelling it commissioned from the Centre for International Economics, which predicts that under the carbon tax gross domestic product will fall by $180 billion between next year and 2020 from a “business as usual” scenario - with no carbon tax - as opposed to Treasury’s estimated $32bn drop………………………………………..Full Article: Source

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