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Commodities Briefing 08.Nov 2011

Posted on 08 November 2011 by VRS |  Email |Print

MacNeil CurryCommodities may rise about 6 percent in three weeks, extending a rebound from a one-year low, according to technical analysis by Bank of America Corp.
The Thomson Reuters/Jefferies CRB Index of 19 commodities may gain to its 100-day moving average of 328 within two weeks and the 200-day moving average of 339 a week later, according to MacNeil Curry, head of foreign exchange and interest rates technical strategy at the Bank of America in New York………………………………………..Full Article: Source

Posted on 08 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 US futures and options by 3.9% to 798,787 contracts in the week ended November 1, Commodity Futures Trading Commission data show.
The Standard & Poor’s GSCI Index of 24 raw materials tumbled 14% since reaching a 32-month high in April………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

As the world’s population hits the 7 billion mark, more investors are looking at effective ways of playing the rising population trend. In our view, one of the best strategies to capitalise on population growth is investing in essential non-discretionary goods, for which there are no substitutes.
Food and water clearly fulfil these requirements and are, in fact, one and the same thing. Agriculture consumes two thirds of all the water we use, so demand for both food and water are intimately linked. They are in effect, two sides of the same coin………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

The commodity markets have become more volatile and more highly correlated with the risk on/risk off market regime that has done nothing but cause trouble and confusion for most investors over at least the past year.
From time to time commodities have shown some solid resilience and at other times commodities have been taken out back for a solid beating. One of the key fundamental drivers behind the occasional strength in commodities has been demand from China. Some people argue that China is increasingly becoming a house of cards………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Happy Diwali! I hope you and your families are blessed by Laxmi and have a prosperous year. While I was teaching a course in the last week before the holiday, there was a special session for trading gold ETFs in preparation for Dhanteras. There has been a lot of talk recently about investing in precious metals and specifically, buying gold jewelry.
Although gold jewelry is beautiful, it may not be the best way to get involved in commodity investing. When you buy the jewelry, you will be paying retail prices and then if you were to sell, you would receive wholesale prices. This means that in addition to paying commissions, you are giving up a lot of potential profits for your investment………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

The global financial markets have been literally in a churn since early 2008,which became more pronounced after the collapse of Lehman Brothers.
Apart from the housing bubble and bankruptcies caused by excessive speculative investments by investment banks in high-risk, complex structured products, the role of excessive speculation in select commodities by high return seeking fund houses, viz., Hedge Funds, Private Equity Funds, long-only funds etc in causing this crisis, first in US and then in the whole global economy, has been well chronicled over the last 3 years………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Standard & Poor’s Ratings Services upgraded Kazakhstan a notch higher in investment-grade territory saying the benefits of rising commodity exports overpower political uncertainties and a weak financial sector.
The Central Asian republic, which has one of the largest economies in the region thanks to its vast natural resources, has both a fiscal and current-account surplus, supported by rising oil production and prices, the firm said………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Higher prices are expected by participants in Kitco News’ Gold Survey for next week, with a solid majority expecting higher prices for the yellow metal for the second week in a row.
In the Kitco News Gold Survey, out of 34 participants, 24 responded this week. Of those 24 participants, 21 see prices up, while three see prices down and none see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Since 1985 to 2007 the developed world has seen the sophisticated development of equity and fixed interest rate markets that has ensured tha investments are aimed at a positive, growth future for the economies on the west side of the globe. All the skills and beliefs in markets have been consistent with that expectation.
When the credit crunch came, the belief was that the powers that be would rectify matters and we would be back to the same rosy future once the hurdles had been surmounted………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Despite surging gold prices, fund of funds (FoF) schemes generated lower-to-flat returns for investors as a combination of factors led by high exposure to global mining companies and wild currency fluctuations impacted their performances over the short-to long-term.
Out of the six gold FoF schemes, whose performance was analysed by rating agency Icra, two have been in existence for more than three years and have grossly underperformed physical gold………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Chinese counterfeit Gold and Silver coins, and gold bars may be flooding US and international market place as there is growing evidience regarding it, according to The Global Piracy and Counterfeiting Consultants.
The Global Piracy & Counterfeiting Consultants says, “Apparently it is legal in China to produce counterfeit coins, and or counterfeit silver, or gold bars, so buyer beware. There is growing evidence that Chinese gold, or silver coin counterfeiters are flooding the U.S. and international marketplace with knock off’s, along with silver, or gold bar knock off’s, and we are urging buyers to be extremely cautious about who you do business with………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

The majority of corporate Copper mining results are now in for Q3 11, and the overall performance has been broadly weak. The results of a group of corporates, which account for close to 40% of global mine capacity, showed output falling 7% y/y (-110Kt) and for the year-to-date, a marginally better 4% y/y decline.
Taken in line with the ICSG data for January to July, which showed flat output year-to-date, current indications point to the overweight probability that global copper mine supply will contract in 2011………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

The International Energy Agency (IEA)’s annual World Energy Outlook, due for publication on 9 November, will contain alarming research that the world is on track for a catastrophic rise in global temperatures unless fossil fuel subsidies are cut, energy efficiency is improved, and more countries introduce some form of carbon pricing.
When we look at the entire renewable energy projects worldwide – wind, solar, mini-hydro – we see that China will be adding the largest capacity worldwide in the next 20 years………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

On Wednesday the International Energy Agency will release the 2011 edition of the World Energy Outlook. Some energy investment figures from the new IEA report have already been made available though – including a proposed 10 trillion dollar investment in oil production, which would be required between now and the year 2035.
The energy figures were made public during a speech by IEA Chief Economist Fatih Birol at last week’s G20 summit in Cannes………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

“Peak oil” will be a demand rather than supply phenomenon, says a UK engineering, management, and automotive consultancy.
Ricardo PLC says multiclient research its Ricardo Strategic Consulting unit began last June indicates global oil demand will peak before 2020 at no more than 4% above 2010 levels. The International Energy Agency estimates average 2010 oil demand at 88.2 million b/d………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Exchange traded funds that invest in Canada have benefited from the move higher in commodities prices due to the country’s strong presence in natural resources and energy markets.
The ETFs have been supported by solid third quarter profit at major oil companies, the European Central Bank rate cut and hopes the Greek bailout will survive………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Hedge funds raised bearish bets on natural gas to the highest level in five weeks as increased output sent stockpiles toward a record.
The funds and other large speculators more than doubled wagers on falling prices in the week ended Nov. 1, according to data from the Commodity Futures Trading Commission’s Commitments of Traders report. The total was the highest since the week ended Sept. 27………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Experts from 14 African countries are examining ways to encourage a market revolution that promises to boost incomes of the seven-out-of-10 Africans who make their living from agriculture.
An information revolution is changing the face of African agriculture. From Tanzania to Ghana and Zambia to Ivory Coast, a move is on to connect rural farmers instantaneously to the information they need to sharply increase their incomes………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

The deadline for the East Africa countries to adopt monetary union, set for 2012, might be extended, if conditions for establishment of single currency in the region are not met.
The permanent secretary in the ministry of East Africa Cooperation, Dr Stergomena Tax Bamwenda, said the criteria such as budget thesis, inflation rate, foreign exchange reserve, government debts and exchange rates among the EAC member countries must be observed before they commit themselves to single current arrangement………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

An alternative currency introduced in a wealthy German region as a school project eight years ago has turned into a hot commodity thanks in part to the euro zone crisis with 600 businesses and 3,000 people trading ‘Chiemgauers’ instead of euros.
The ‘Chiemgauer’ — named after the southern Bavaria region around Rosenheim — comes in paper notes with face values of 1 to 50. The notes are convertible at local shops and have a fixed exchange rate of 1:1 with the euro………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

The U.S. is reaping its smallest corn harvest in three years after a drought damaged what was a record crop as recently as July, driving annual prices to an all-time high and curbing an expansion in global food supplies.
The government will forecast production of 314.7 million metric tons tomorrow, 27.4 million tons less than four months ago, the average estimate of 30 analysts surveyed by Bloomberg showed. The cut is equal to output in Argentina, the second- biggest exporter………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Australia’s Senate is set to pass laws on Tuesday putting a national price on carbon emissions, one of the country’s most sweeping and divisive economic reforms that have been a decade in the making.
Opposition leader Tony Abbott has run a two-year campaign to wreck the scheme, seizing on voter fears of higher costs and job losses and driving support for Prime Minister Julia Gillard to all-time lows. Upping the ante further, he made a “blood oath” last month to repeal the laws if he wins power in 2013………………………………………..Full Article: Source

Posted on 08 November 2011 by VRS |  Email |Print

Greg Sheridan’s claim that international carbon trading “lies halfway between a fantasy and a fraud” falls short of this requirement. Sheridan constructs his argument on an assertion by Canada’s Foreign Minister John Baird that there is no such thing as international carbon trading.
Yet this statement is demonstrably untrue. 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………………………………………..Full Article: Source

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