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Commodities Briefing 14.Dec 2011

Posted on 14 December 2011 by VRS |  Email |Print

Richard AdkersonYou want to know where the global commodities markets are heading in the coming years? Then it’s probably best that you remember a single word: China. As the biggest and one of the fastest-growing of the world’s developing economies, China has become a voracious consumer of industrial and agricultural commodities.
Its shifting needs are now the most-important driver in the prices of many of those goods. Producers often base massive capital investments largely on their expectations for Chinese demand for their products. Investors often make similar calculations before buying or selling commodities contracts or related securities………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

Over the last 24 hours, tensions between the Iranian republic and Israel have become more pronounced. As Iran fears a United States-backed attack by the Israelis, the nation has decided to start pursuing rampant military drills in order to prepare itself for the worst.
Its most recent drill took place in the Straits of Hormuz, a strategically significant waterway bordering southern Iran. It is also used to export crude oil and petroleum from the Persian Gulf. It is no surprise that once the Iranian government shut down the waterway that energy futures spiked………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

Commodities fell to a two-week low on mounting concern that the European debt crisis will spread after Moody’s Investors Service said it will review ratings for countries in the region.
The Standard & Poor’s GSCI index of 24 raw materials declined 1.3% on Tuesday to close at 638.93 at 3:44 pm New York time, led by metals. Earlier, the gauge touched 636.8, the lowest since November 25. The measure has dropped 16% from a 32-month high in April………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

Global demand for coal will continue to expand aggressively over the next five years despite public calls in many countries for reducing reliance on the high-carbon fuel as a primary energy source, the International Energy Agency (IEA) said in a new annual publication, Medium-Term Coal Market Report 2011, released Tuesday.
Coal is already the single-largest source of electricity generation globally, and the report says the main reason for the projected increase in coal demand over the next five years is surging power generation in emerging economies………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

The pace of global biofuels production growth will be slower than previously forecast over the next five years due to weaker prospects for Brazilian ethanol and as the US market becomes saturated, the International Energy Agency said Tuesday.
Updating medium-term forecasts made in June, the IEA said it sees global biofuels growth from 2010 to 2016 at just 400,000 b/d, versus 500,000 b/d previously. It now expects biofuels supply to reach 2.22 million b/d in 2016, up from 1.822 million b/d in 2010………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

Tougher international sanctions on Iran may lead to higher global crude prices and a decrease in output capacity for OPEC’s second-largest oil producer, the International Energy Agency said.
A proposed European Union ban on purchases of almost 600,000 barrels a day of Iranian crude would “likely” force refiners in the Mediterranean region to pay more for oil from other suppliers, the agency said……………………………………….Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

According to research findings released by the Chinese Academy of Social Sciences, global oil prices will fluctuate around the benchmark scope of 79 U.S. dollars to 90 U.S. dollars in 2012.
The oil prices will usually return this interval after a single deviation unless a significant permanent change in the world’s economic and political structure occurs, according to the academy. Domestic demand for oil is increasing year by year due to the vigorous development of China’s economy. However, domestic oil production is not keeping up with the increasing demands and is even stagnating……………………………………….Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

U.S. crude steadied near $100 a barrel on Wednesday ahead of an OPEC meeting at which ministers are expected to set a new production target, legitimising a big increase in supply over the last six months.
NYMEX crude for January eased four cents to $100.10 by 2341 GMT a barrel after surging more than $2 in the previous session………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

The U.S. economy is limping along, unemployment is still high, and gasoline demand for this time of year is at its lowest since the 1990s. So why does a barrel of domestic crude cost around $100?
Nymex crude futures have been on a tear lately, soaring 35% from the beginning of October to their recent peak in mid-November, and have crossed the $100-a-barrel threshold a handful of times………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

OPEC’s oil price hawks looked set on Tuesday to accept a new group output target that legitimizes a big increase in supply over the last six months from rival producers Saudi Arabia and its Gulf allies.
A deal expected at a Wednesday meeting should restore some credibility to the Organization of the Petroleum Exporting Countries after talks fell apart in June and left the cartel without its normal self-imposed output constraints………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

A quirk in the market for crude oil has suddenly made the commodity attractive for small-time investors again. But analysts say there are reasons to be careful before diving back in.
Among the most popular ways for retail investors to bet on the price of oil is through an exchange-traded fund, which offers exposure to the ebbs and flows of raw-material prices by using pooled money to buy and sell commodity futures………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

The financial press reveals the bipolar state of the global economy. One report questions whether the cash exists to bail out the PIIGS. This morning there is a conflicting story which reports that the major banks of the United States, France, Germany and Japan will provide the liquidity to effect support for the troubled nations.
Remember Gold Stock Trades oft quoted trope, that the markets will do whatever it must to confuse, misdirect and obfuscate the lay investor. The daily dose of contradictory reports serve only to tangle the web. Einstein formulated, “The nth degree of complexity is simplicity.” Gold Stock Trades has absolute abhorrence for academic blather………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

As the financial markets negotiate a battlefield of rising European debt, high inflation and the fear of a double-dip recession, investors have been left in a bit of a no-man’s land. Sectors across the board have taken a hammering, and even the safe-haven allure of the commodities market has faltered.
Despite the bloodbath, analysts and fund managers alike have remained bullish on the sector, arguing that precious metals have performed well during times of economic distress, including the 2008/09 financial crisis. But how you get in on the game is a matter of preference………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

Gold is in the bump phase of a seven-year Bump-and-Run Reversal Top pattern which typically occurs when excessive speculation drives prices up steeply, and is now at a critical juncture which could change the long-term trend of gold. Silver is already in the run phase which does not bode well for its future price. Let me explain.
According to Thomas Bulkowski, the Bump-and-Run Reversal Top pattern consists of three main phases:……………………………………….Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

Gold, in the 11th year of its longest winning streak in at least nine decades, is poised to enter a bear market, according to Dennis Gartman, who correctly predicted the slump in commodities in 2008.
The metal, which traded at $1,663.22 an ounce in London, may decline to as low as $1,475, the economist wrote Monday in his Suffolk, Virginia-based Gartman Letter. He sold the last of his gold on Monday. Bullion has already dropped 13 per cent from the record $1,921.15 reached September 6 and $1,475 would extend that to more than 20 per cent, the common definition of a bear market………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

While the fundamentals for silver continue to get better and better, prices remain within a wide trading range and are likely to continue consolidating for some time to come before making an upward move.
This is the view of Resource-Investor.com founder, David Morgan, who told Mineweb.com’s Metals Weekly podcast that the world is currently facing a liquidity squeeze which is forcing investors into cash………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.
Commodity-based companies and associated ETFs are critically important as a gauge of economic health and demand, inflation and are also critical additions to investment portfolios………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

The London Metal Exchange plans to introduce exchange-traded financially settled swaps for all non-ferrous metals contracts on Jan. 23, exchange officials said Tuesday. The average-price contracts will be the world’s first of their type traded on-exchange.
The contracts have been designed for participants of the physical industry needing to hedge the monthly average price, officials said. “LME swaps will bring transparency to pre- and post-trade prices,” Chris Evans, head of business development at the LME, said in a statement………………………………………..Full Article: Source

Posted on 14 December 2011 by VRS |  Email |Print

Consumer price pressures are rising throughout the region while economic activity and currency values fall, raising concerns over a possible bout of stagflation on the European Union’s eastern flank.
In Poland, November inflation is expected to spike to 4.5% from 4.3% in October, while in Hungary inflation is seen rising to 4.3% on the year in November from 3.9% the month before………………………………………..Full Article: Source

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