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Commodities Briefing 16.Dec 2011

Posted on 16 December 2011 by VRS |  Email |Print

Miguel Perez- SantallaGold’s biggest rout in three months means traders are the least bullish since July and Dennis Gartman, the economist who sold the last of his metal on the day the slump began, warned of further declines.
Ten of 21 surveyed by Bloomberg expect the metal to gain next week, the lowest proportion since July 29. Three were neutral. While bullion’s slide of as much as 9 percent this week took its drop from the record $1,923.70 an ounce reached in September to almost 20 percent, the common definition of a bear market, investors are still holding the most metal ever in exchange-traded products, a wager now valued at $119.2 billion………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

With safe havens like these, who needs risky assets? Gold is down 9.8% in December after Thursday’s 0.6% decline, the fourth consecutive daily drop. The sell-off has lopped almost $171 off the price, leaving bullion at $1,574.60 a troy ounce, the lowest closing price since July 12.
The decline accelerated this week even as frustration mounted at halting moves by European leaders to address the continent’s sovereign-debt crisis………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

Investors who bought gold as a hedge against the crisis in Europe may be surprised that the price of gold is falling so rapidly. Shouldn’t the prospect of concerted action by central banks to stem a crisis in Europe send gold soaring?
Not really. A bit of history shows that gold falls when governments act to stem a financial crisis………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

The price of gold has roller-coasted since August, causing many investors to become disillusioned with its reputation as a safe haven investment. Indeed, few markets, including gold prices, can escape the consequences of wild market swings. So where will gold go from here?
A number of current events are likely to jerk the market around: the EU summit, the Fed’s recent FOMC announcement, rating agency downgrades, and China’s slowing economy, to name a few………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

It’s handbags at dawn in the gold market this week. Much to the surprise and/or dismay of many, gold has taken a dramatic dive, breaking below $1,600 a troy ounce for the first time in almost three months as deteriorating faith in the future of the euro-zone sent the euro tumbling, dragging dollar-denominated assets such as gold down in its wake.
At the same time, conscious cash generation has combined with waves of technically-driven selling to escalate losses in gold, pulling several key levels of support out from underneath it in the process………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

Richard Davis, manager of the BlackRock Commodities Income Investment Trust, tells Robert Miller why demand for commodities will remain strong and how gold bullion prices could ‘easily go to $2,000′.
The two commodities that attract the most investor attention – and indeed speculators – are oil and gold. The BlackRock portfolio under Mr Davis has taken a big position in oil, often referred to as “black gold”. “Long term,” he noted, “we think that the oil price has to remain above $100, and it has to be above that level in order to encourage new supplies to come on.”……………………………………….Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

As gold bugs get discouraged in the wake of year-end sell offs, über precious metals mining entrepreneur Rob McEwen still is firmly bullish on gold in the long run and stands pat on his $5,000 per ounce gold price prediction.
In a talk to the Geological Society of Nevada Wednesday in Reno, McEwen urged the audience to “step out of line once in a while” and constantly question fundamental assumptions about geology and discoveries………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

As gold prices plunged as much as 3.5% in trade yesterday, permabear and economist, Nouriel Roubini, was engaging in some gold bull baiting on Twitter.
“Gold at a 7 weeks [sic] low down to 1635. Where is 2000 gold dear gold bugs?” He said, and, later in the day, “Gold bugs in hiding as gold prices plunge.” At roughly the same time gold mining entrepreneur Rob McEwen in a talk to the Geological Society of Nevada, stood firm on his prediction that gold prices would hit $5,000 over the long term……………………………………….Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

Silver rallied to $48.70 an ounce in April, and after giving back 40 percent of its value by September, started to recover before its latest setback. Silver has grown as an investment vehicle in the last decade and has a number of things going for it on the industrial side, says Dillon Gage Metals of Dallas.
“Silver is much more than jewelry and sterling tableware,” says Terry Hanlon, President of Dillon Gage. “It’s not just for wedding presents and birthday gifts but has widespread uses throughout the economy.”……………………………………….Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

Silver and gold are in the process of bottoming, and should rally very soon. The depth of the recent decline may be surprising; however, it does not signal the end of the bull market. The fundamentals for silver and gold are very strong, and it has not changed over the last couple of days.
We are still using fiat money, as well as debt levels are still extremely high. The massive debts brought about by the debt-based monetary system, is not just going to go away. A few things have to happen before debt is brought to acceptable levels………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

David Morgan, publisher of Silver Investor, still believes silver price will go above $50/oz in 2012. He forecast $65–75/oz silver by the end of 2012. Morgan talks about the tenets he lives by when investing in mining companies, be they small-cap or midtier or billion dollar companies.
I don’t see the silver price going above the $50/oz level in 2011. In other words, the top is in for this year, and has been for some time. I still believes silver price will go above $50/oz in 2012. I forecast $65–75/oz silver by the end of 2012. I don’t foresee a big rush into price appreciation for gold or silver in the first quarter of 2012 (Q112), which is seasonal………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

This is one of those times that we have inveighed about so often. It is a typical “COM” week where markets are designed to confuse, obfuscate and misdirect the players. All thirty Dow stocks and commodities were down as Europe and Bernanke disappointed the markets with what they did not do. The markets were looking for a morsel of guidance, what they got was further silence and ambiguity.
The screens have been awash with a sea of red. Protestors are taking to the streets in both the US and Europe waving flags representing defiance……………………………………….Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

As commodity prices continued to slide Thursday, one analyst says a U-turn could be around the corner — including gold above $2,000 per ounce.
“At some point crude oil is going to become a very good trade as we go into next year,” said Francisco Blanch, head of global commodities and multi-asset strategy at Bank of America Merrill Lynch Global Research. “But remember the economy is decelerating.”……………………………………….Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

The head of the International Energy Agency Thursday welcomed OPEC’s agreement for a new crude production ceiling of 30 million b/d, saying it was especially significant given the risk at present to the global economy.
In a statement, IEA Executive Director Maria van der Hoeven said she also welcomed OPEC’s flexibility………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

A move by members of the Organization of Petroleum-Exporting Countries to put aside major differences means the group may now be able to defend high oil prices by cutting production if needed.
Some analysts had warned that mounting political tensions could tear the organization apart after a disastrous meeting in June over production policies. That gathering collapsed amid mounting tensions between regional rivals Iran and Saudi Arabia as uprisings gripped the Middle East and North Africa………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

An international research institute says the West’s plans to impose an oil embargo on Iran will harm the world market. According to IHS Cambridge Energy Research Associate, the Western countries’ plans to enforce sanctions on Iran’s oil sector could drive up oil price and wreak havoc on the world market.
According to the international institute, Iran’s oil revenues will hit record of more than 100 billion dollars this year, and the result of any possible sanction is a higher profit for Tehran, because it will sell the oil to someone else………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

ETFs have become a trillion-dollar-plus trading instrument allowing investors to bet on the rise or fall in price of a vast range of commodities, indices and currencies without actually having to buy the assets themselves.
But stockbroker Williams De Broë’s head of research, Jim Wood-Smith, said: “ETFs could pose a significant danger to investors at times of high market volatility. We welcome the increased attention regulators are paying to these products, which remain relatively untested.”……………………………………….Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

The euro’s overvalued, the pound’s set to rise and watch out for Turkey’s wildcard lira, writes Chris Towner of foreign currency exchange broker HiFX.
Predictions for China: Over the past few years China has proved to be an engine for growth, counterbalancing some of the recessionary shocks in the Western world. However, similarly to Japan in the late-1980s, there are signs that the incredible double-digit growth is starting to slow………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

The year 2025 will see the Chinese economy overtake the US economy, though the average Chinese will still be four times poorer than the average American. The Chinese economy, however, will continue to power along as Latin America and Africa also continue to enlarge their share of Chinese imports and exports.
There is no doubt that, should China navigate its political landscape well, the yuan is the currency of the future. And more importantly Chinese banks might be willing to extend loans in this currency………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

Greenhouse gases aren’t rising to the top of most agendas right now. Emission caps established under the Kyoto Protocol are set to expire at the end of 2012, and a United Nations-led effort to forge a new global compact is inching forward.
The European Union, which runs the world’s biggest carbon trading market, has other things on its collective mind. One side effect of all this is a 47 percent drop this year through Dec. 12 in the value of C0₂ allowances issued under the EU’s Emissions Trading Scheme. The permits, which mostly go to utilities and other industrial companies, can be banked or traded………………………………………..Full Article: Source

Posted on 16 December 2011 by VRS |  Email |Print

Credit Agricole will stop trading commodities and will also slash its financing of the multi-billion-dollar market, the most sweeping commodity cuts yet among European banks strained by the euro zone crisis.
Credit Agricole, the formerly farm-focused bank that had boosted its energy trading in recent years, warned on Wednesday of losses and write-downs as it struggles to cope with the credit crunch. The cuts come just weeks after rival Societe Generale shut down its year-old U.S. gas and power trading desk, and leader BNP Paribas consolidated………………………………………..Full Article: Source

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