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Commodities Briefing 19.Dec 2011

Posted on 19 December 2011 by VRS |  Email |Print

Weakness in global equity markets, uncertainty in the Euro zone, and a slowdown in China and other emerging markets has had a ruboff effect on commodities as well. The sentiment is likely to remain weak till some positive signal emerges. There was a sell-off in all major commodities like gold, silver, crude oil along with base metals and agri commodities.
Base metals and silver were among the biggest losers while agri commodities were the least impacted. Wheat and soybean also managed to post a marginal gain of a 1%………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Global food commodity inflation will likely ease in 2012, Moody’s Investor Service said Monday, but the rating company warned that food companies might attempt to recapture stronger profits through price increases, after exhausting margin-saving measures.
The ability to pass raw material price increases on to customers has cushioned the food sector over the last year, Moody’s said, but slowing demand due to Europe’s uncertain macroeconomic situation will make it harder for them to do so in future, and margins could contract if input costs rise again………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Speculators reduced bets on commodities to a 31-month low on mounting concern that global economic growth is slowing as Goldman Sachs Group Inc. (GS) and Barclays Capital reiterated predictions that prices will gain.
Money managers cut combined net-long positions across 18 U.S. futures and options by 9.6 percent to 532,521 contracts in the week ended Dec. 13, Commodity Futures Trading Commission data show. That’s the lowest since April 28, 2009. Wagers on gold dropped to an eight-week low and coffee holdings tumbled 60 percent, the most since August………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

The long-in-the-tooth commodities correction plunged to new lows this week. Traders were disappointed the Fed didn’t announce a new quantitative-easing campaign, so they dumped the popular commodities with a vengeance.
But realise the primary driver of the recent commodities weakness is not the Fed, but a strengthening US dollar. The coming commodities price action heavily depends on its fortunes………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Australia’s commodities sector is bracing for another active cyclone season, but unlike last year, prices of key exports such as iron ore, coal and sugar may show little reaction as Europe’s economic turmoil and surplus crops pressure markets.
A barrage of cyclones and tropical storms during the last November-to-March “wet” season flooded collieries and halted iron ore mining while ripping apart sugar and wheat crops, driving up commodities prices around the world. Meteorologists predict more storms than usual this season as a La Nina weather pattern again brings heavy rains………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

The implementation of the Organization of Petroleum Exporting Countries 30 million barrel- a-day production ceiling would create “strong upside risks” to oil prices next year, analysts at Goldman Sachs Group Inc. said in a note.
“We continue to expect that oil demand will grow well in excess of production capacity growth,” the note to clients said………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

OPEC members led by Saudi Arabia increased exports of crude oil in October from a month earlier to meet higher global demand, according to the data the governments submitted to the Joint Organization Data Initiative.
Kuwait, the group’s fourth-largest producer, increased exports to 2.14 million barrels a day in October, the data showed. This is the highest monthly figure since at least January 2002 when the country started submitting data to the initiative known as JODI………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Gold prices will fall below $1,500 an ounce over the next three months and are unlikely to retest September’s all-time highs until later 2012 at the earliest, according to a Reuters poll of 20 hedge fund managers, economists and traders.
The bleak forecast, coming after gold has lost 11 percent of its value so far this month, is likely to fuel fears that bullion is close to ending its more than decade long bull run and entering a bear market………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Forecasters, whether of the economy, or the stock market, or the gold price are frequently wrong . . . but we are never in doubt. It is up to you - the investor - to listen, evaluate, doubt, and make your own decisions about gold’s future price and the role the metal might play in your own investment portfolio and personal savings plan.
I have no doubt that gold will move up sharply in the years ahead, reaching heights that might lead some to label me a “gold bug.” I believe that the price of gold will, over the course of this decade, reach a multiple of recently prevailing prices………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

With what is happening with the price of gold these past few days it is imperative to take a look at the long and short of it all (the trends, that is). In doing so it shows that we are still very much in a long-term bull market but in a short-term (yes, short-term) bear market. Let’s take a look at some charts that clearly outline where we are at and where we could well be going.
No discussion about gold would be complete without taking a look at the performance of the HUI index which consists primarily of large and mid-cap gold producers. As the graph shows below it is struggling terribly underperforming equities in general and gold by a wide margin………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Investors who prefer to own physical Gold that they can see and touch have multiple ways to achieve that comfort level. But when stacking up the choices, bullion appears to have the edge over coins for investors who also think about selling as much as acquiring.
“Everyone should keep a little physical at hand,” said Adrian Ash, head of research with London-based BullionVault. “The problem with using coins or small bars for the bulk of your precious metals is threefold: cost, liquidity and security.”……………………………………….Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Having fought a stalwart battle above $1,700 and having seen over $1,900 this year, gold has not done as so many analysts have believed it would and risen through $2,000. Instead, here we could be headed down towards $1,500 or to who knows where?
Stress in the financial markets has not stimulated safe-haven gold buying but has instead weakened the euro and indirectly helped drag gold lower. Prices have fallen to a point where investors with longstanding positions are liquidating some of their holdings to secure profits and momentum-driven traders are selling heavily………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Having fought a stalwart battle above $1,700 and having seen over $1,900 this year, gold has not done as so many analysts have believed it would and risen through $2,000. Instead, here we’re headed down towards $1,500 to who knows where?
The stress in the financial markets has not stimulated safe-haven gold buying but has instead weakened the euro and indirectly helped drag gold lower. Prices have fallen to a point where investors with longstanding positions are liquidating some of their holdings to secure profits and momentum-driven traders are selling heavily………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

I know that during a correction of the magnitude we are seeing right now it seems more like the Gold bull is dead than on the verge of moving into what I expect will be one of the greatest parabolic moves in history.
However, all of the conditions necessary to launch the bubble phase are now in place. Gold is in the process of putting in an intermediate degree bottom. That bottom, which is only days away if it didn’t already happen today, is going to be the single greatest buying opportunity, probably of the decade………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Empirical evidence shows that this proven inflationary hedge helps portfolios during any kind of price instability.
The evidence for gold as an inflationary hedge is overwhelming, while information on gold’s performance during deflationary periods has been relatively hard to come by. But if gold should only be held during inflationary periods, then investors are left with an apparent market timing problem………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

The world has already witnessed a 93% drop in global inventory of Silver since the 1950 and consumptiom, investment demand continues to outpace supplies, that the world could witness silver shortage as early at 2015 or if not latest by 2020.
In 1950 there were 10 bn ounces of silver above ground available which was sufficient for 140 months of supplies but by 1970 available supplies were sufficient for only 70 months and by 1990 15 months and by 20101 11 months………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Silver is ready to finish a dramatic year near the level it started, and some analysts predict big gains, and heavy volatility, for the white metal in 2012.
“Silver went parabolic when it broke above $29 back in March of this year,” said James Carrillo, senior portfolio adviser for Swiss America Trading Corporation. “It fulfilled its parabolic blow off at $50 shortly thereafter and is now testing the break point.”……………………………………….Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

The global economy’s woes will hurt Asian manufacturing next year, a Chinese industry group has warned, adding that China’s appetite for metals will slow.
The bearish outlook will have implications for Australian miners such as BHP Billiton and Rio Tinto………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

Metal demand in China may grow at a slower pace in 2012 and prices may be lower than this year, Wang Huajun, deputy secretary-general of the China Nonferrous Metals Industry Association.
“It is unlikely to see metals demand to grow at more than 10 percent next year,” given the macroeconomic environment, Wang said at a forum in Shanghai………………………………………..Full Article: Source

Posted on 19 December 2011 by VRS |  Email |Print

India’s central bank curbed trading in rupee forwards, seeking to temper speculation after Asia’s worst-performing currency fell to a record low.
Forward contracts once canceled cannot be bought again, the Reserve Bank of India said in a statement on its website yesterday. The new rule applies to domestic as well as foreign investors and takes effect immediately. Forwards are agreements to buy or sell assets at a set price and date………………………………………..Full Article: Source

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