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Commodities Briefing 29.Nov 2011

Posted on 29 November 2011 by VRS |  Email |Print

Just looking at a new article from global consultants McKinsey about the state of world commodities and the outlook looks bleak, to say the least. “Our research shows that during the past eight years alone, (commodity prices) have undone the decline of the previous century, rising to levels not seen since the early 1900s,” according to McKinsey.
“In addition, volatility is now greater than at any time since the oil-shocked 1970s because commodity prices increasingly move in lockstep. Our analysis suggests that they will remain high and volatile for at least the next 20 years if current trends hold—barring a major macroeconomic shock—as global resource markets oscillate in response to surging global demand and inelastic supplies.”……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

Nelson LouieSpeculators decreased wagers on rising commodity prices to the lowest since July 2009 amid concern that Europe’s inability to contain its debt crisis will crimp demand for raw materials as global growth slows.
Money managers cut combined net-long positions across 18 U.S. futures and options by 25 percent to 562,508 contracts in the week ended Nov. 22, Commodity Futures Trading Commission data show. That’s the biggest decline in eight weeks and the lowest since July 14, 2009. Corn wagers tumbled 25 percent, the most since June 2010, and bets on lower copper prices doubled………………………………………..Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

It’s been a tough few months for companies that use derivatives to hedge their commodity costs. A collapse in industrial metal prices handed major paper losses to firms like Ford. The massive dislocation in crude oil benchmarks hit United Continental hard.
And now, with deepening despair over the European economy and ever-present fears of a US slow-down, many companies that would normally be locking in their costs have retreated to the sidelines this month, market sources say……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

Commodities climbed the most in four weeks as European policy makers took steps to stem the region’s debt crisis, and U.S. retail sales surged.
The Standard & Poor’s GSCI index of 24 raw materials rose 1.4 percent to settle at 644.84 at 3:47 p.m. New York time, the biggest gain since Oct. 27. Nineteen commodities climbed, led by metals and energy. The gauge dropped 4.5 percent in the previous two weeks as rising borrowing costs deepened concern that Europe would fail to contain its fiscal turmoil……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

The decade long flight of wealth from fiat currencies and naked stocks, to gold, as a safe haven to guard against economic chaos and worldwide depression, is a curious aberration of market speculation.
Considering the vast amount of information available to those wealthy enough to be able to own gold, and the history of Gold and Silver as money to be used for purchasing consumables; one wonders why companies, banks, and persons of wealth, along with their financial advisors, are so poorly informed about the impracticality of owning gold as a potential emergency money for individuals and businesses; especially considering the current very distorted relative value of gold to silver………………………………………..Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

Ten-year bull run is expected to continue. $2,000/ounce could be the price of gold by the end of 2011. Precious metal investment company Arteus Capital expects gold prices to rise after a correction of almost $300 in September. According to Arteus, the price of gold could reach $2,000 an ounce by the end of this year.
Prices started 2011 just above $1,400 an ounce and exceeded the $1,900 mark for the first time ever in August. ……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

The Elliott Wave Theory (EW) gives superb results in predicting the gold price. While it is a complicated system with many difficult rules which I explain in simple terms, I have determined that once this present correction in gold has been completed it should undergo the largest and strongest wave in the entire gold bull market.
The target for this wave should be around $4,500 with only two 13% corrections on the way. So said Alf Field in his 6,500 word speech that he came out of retirement to give at the recent Sydney Gold Symposium……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

As the financial tidal wave threatens to swamp Europe, investors are becoming less risk averse looking for a safe haven in precious commodities.
­Gold has been growing steady for almost 5 years. Experts believe the continuing threat to global economies could benefit gold prices. Edel Tully from UBS says “Gold reflects emotions, the fear about the current economic climate and fear about what lies ahead,” Tully adds that “people should be more proactive and be prepared to take profits” as a volatile era for gold will continue with “the average price for the metal reaching 2075 dollars per ounce in the next year.”……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

Gold Forecaster has for years now pointed to gold’s coming monetary role as collateral. We have never believed that a return to the Gold Standard was feasible in the form it was used in last century. We have never believed it would return as day-to-day money. We have always seen its return tied into its use on a global basis, most likely between governments, as we saw under the Bretton Woods system after the Second World War.
We have always pointed to a time when it would return to a key monetary position in the global financial system………………………………………..Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

Silver is not generating any interest from buyers in India at the moment, despite the small fall in price. In Mumbai, it fell 3.88% on Saturday to settle at $1,063.39 a kilo as compared to $1,106.34 two weeks ago. On Monday, silver was down further in early trade, quoting at $1,010.99.
Traders insist that investors and consumers will only reappear in the market if the price falls below a certain benchmark price in India………………………………………..Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

Fund managers continued their bearish streak in Comex copper futures and options for a tenth week, data released Monday by the Commodity Futures Trading Commission show.
Speculative traders such as hedge funds and managed money funds cut 1,639 long positions, or bets on higher prices, and added 2,601 short positions, or bets on lower prices, in the week ended Nov. 22………………………………………..Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

The metal markets are rebounding in a commodity-wide rally Monday as risk sentiment picks up and the euro strengthens. Both spot gold and the London Metal Exchange’s flagship three-month copper contract have posted one-week highs, with gold rallying 2.3% to $1,720.77 a troy ounce and copper peaking at $7,480 a metric ton, up 3.5% on Friday’s close.
The metals rose as equity markets and the euro began the week on a strong footing, helped by softening Italian bond yields, reports of a new credit facility by the International Monetary Fund and a strong start to the U.S. retail sales season, known as Black Friday………………………………………..Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

International Energy Agency Director Maria van der Hoeven said Monday that tight oil supplies continue to threaten the global economy, even as Libyan production returns quicker than some expected.
Van der Hoeven, during an interview in Washington, said the rebuilding of Libya’s petroleum sector “looks as if it’s going quite fast. This of course is very interesting and reassuring.”……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries may keep oil production quotas near current levels when they meet next month, Ecuador’s Non-Renewable Natural Resources Minister Wilson Pastor said.
“We don’t see a significant change in production,” Pastor, who stepped down last year as OPEC’s president, said in an interview in Santiago. “The price of oil is at the level that OPEC has defended between $80 and $100. This is beneficial for the global economy.”……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

The weekly average price of the Organization of Petroleum Exporting Countries (OPEC) dropped to 108.05 U.S. dollars a barrel last week, the Vienna-based cartel said Monday.
The downgrade of Portugal’s credit rating, which has increased the concerns about the European debt crisis, became the major factor suppressing the international oil prices last week………………………………………..Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

A broad index of commodities, as tracked by IndexMundi.com, is up 252% in the last 10 years.
So when Christina Romer says, “the specter of inflation is quickly fading”, as she did on Bloomberg TV recently, it makes one wonder. What is the time period these people are looking at? A week? A month? Only ones when commodities are down?……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

Kotak Mahindra Bank, the promoter of Ace Derivatives & Commodity Exchange Ltd., has sold an 11% stake in the exchange to private investors for about 200 million rupees, the Economic Times newspaper reported Monday.
The bank has now brought down its stake in the commodity exchange to 40% from 51% to meet regulatory guidelines, the report said, citing Narayan S.A., president commercial banking and capital markets of the bank. Narayan is also the chairman of the commodity exchange. ……………………………………….Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

The Bombay high court has reserved its judgement in the MCX Stock Exchange (MCX-SX) case yet again. The exchange had filed a writ petition about a year ago, challenging market regulator Securities and Exchange Board of India’s (Sebi) decision to reject its application to launch new segments such as equity and interest rate derivatives.
After extensive hearings on the matter, the ball is now in Sebi’s court………………………………………..Full Article: Source

Posted on 29 November 2011 by VRS |  Email |Print

As ordinary people try to cope with inflation and unemployment, and businesses struggle with higher taxes and falling demand — since consumers are scared to spend — few politicians are looking at life beyond the economic crises.
Anyone concerned about the kind of world their children will face, however, should be worried about the findings of the World Energy Outlook 2011 published recently by the International Energy Agency (IEA). To put it bluntly, the world is heading for disaster of irreparable climate change………………………………………..Full Article: Source

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