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Commodities Briefing 21.Dec 2011

Posted on 21 December 2011 by VRS |  Email |Print

Sterling SmithEuropean woes related to sovereign debt and potential Middle East tensions will likely dominate headlines for financial and commodity markets in 2012, most market watchers have said, and the volatility seen this year could be part of the trading landscape next year, too.
That means market participants will have to be nimble and prepared for any gyrations that may come to pass from these regions. Yet it’s often the news that comes seemingly out of nowhere that can really catch investors off guard and harm their portfolios………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Commodity markets are mostly under pressure this year, with only 11 out of 48 commodities having registered bullishness for the year, said Barclays Capital in their last Commodity Briefing of 2011.
According to Barclays, top performer in commodity is feeder cattle, which is so far up 18% on the year. Gold is the top performer in the precious metal section while silver, Platinum and Palladium underperformed………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Commodity prices can be very volatile, oftentimes more so than just about any other asset class. These large price swings, which have been particularly evident in recent years, have given commodities their reputation for high risk. Those investors who lack a large buffer of disposable risk capital are repeatedly advised to steer clear.
But for those investors who can bear the risk, and who look to invest in commodities as an inflation hedge, there is some evidence to suggest that commodity prices move in long term “supercycles,” which play out over years and even decades. By observing and understanding these movements, these investors may be able to be more strategic in their approach………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

An Oxford Policy Management study of mineral dependent countries-believed to be the first of its kind-finds more than 20 low- and middle-income countries “have become dangerously dependent on the exports of minerals such as metals and hydrocarbons…leaving the countries highly vulnerable to a global economic downturn.”
About 75% of all mineral-dependent countries are now low- and middle-income countries, while the number classed as mineral-dependent has increased by 33% since 1996 from 46 to 61 nations……………………………………….Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

If it wasn’t clear to you yet, nobody on earth will has illusions of grandeur for the global economy situation. But here’s Merrill Lynch’s handy guide to navigating through 2012.
Investors should expect another turbulent year of market volatility during 2012 from a mix of heightened policy risk, political uncertainty, low growth and low interest rates, all of which will translate into modest investment returns, according to BofA Merrill Lynch Global Research’s 2012 Year Ahead Outlook………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Bankers, hedge funds and sovereign wealth funds are gambling on hunger by speculating on food supply. Global regulators should step in to stop them.
Last year, the price of global food floated high as ever. That’s bad news for most of us, but not for those who trade commodities. In fact, 2011 was a great year for the traders, who thrive on bad news, currency woes, drought, flood, freeze, fire and all other manifestations of imminent apocalypse………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

You’ve probably seen the signs by now, since they’re pretty much everywhere you turn. People are buying Gold in record numbers and it really shows no sign of stopping. From television commercials to pawn shops, the number of buyers for gold has triggered a modern gold rush.
If investing in gold sounds like a good idea to you, that’s because it is. Most investing experts recommend that your portfolio be made up of three to twenty percent gold investment………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

As gold surged towards the $1900 per ounce price level over the past few months, there has been growing interest in gold as part of a well-diversified portfolio – and as a safe-haven investment.
Indeed, the gold positions of large and well-respected institutional investors such as the University of Texas endowment, and hedge fund manager, Paulson & Company, have been in the news………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

The price of gold bullion has dropped more than 17 percent from an all-time high reached in September as strapped hedge funds and sovereign funds sell the precious metal to raise money and the strong U.S. dollar strips it of its safe haven status.
In fact, some experts say it could go as low as $1,000 an ounce in the foreseeable future………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Our work with gold is based on a “Model” off the late 70’s Gold Bull that has been replicating nicely since we started the Fractal Work with gold back in 2002 and 2003. Short-term volatile moves in gold, as we have seen over the past weeks, do not affect our projections based on the model, leaving the expectation of a move in gold up to $3,000 into mid-year based intact as outlined in a previous article entitled Gold Tsunami: on the Cusp of $3000+?
This is no different than our projection calling for gold going to $1860 to $1920 back in April in an article entitled Goldrunner: Gold on track to Reach $1860 to $1,920 by Mid-year………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

There has always been a natural desire to understand the future insofar as it makes us better prepared to face its challenges and, let’s be honest, we can profit by it.
In recent years economic forecasting has been amplified from something that is simply useful - to something upon which, some commentators would suggest, our very survival depends. A view on ‘the economy’ is now de rigueur both in the boardroom as well as the dinner party scene. With concerns about the economy reaching epic proportions, the stakes are now very much raised as we approach year end………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Eighty per cent of mining companies in the world expect the price of gold to go up in 2012, according to PwC’s annual gold price report. And more than half of respondents to the PwC survey expected gold would peak next year at $2,000.
Higher gold prices usually translates into higher stock prices and 62 per cent of respondents said this was the case………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Platinum appears to have stabilized above the $1,400 an ounce level for now. Weakness for the metal mainly came from selling by speculative financial investors, according to market positioning statistics, said Commerzbank in a research note.
Commerzbank noted that money managers in the CFTC data cut their net long positions in the week to Dec. 13 for the fourth week running and short positions reached their highest level since the start of this data series. Sister-metal Palladium saw a similar story: net long positions are at their second-lowest level ever………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Zinc prices are expected to remain low as the general weakness in base metals continues into 2012. Uncertainty with regard to global growth is keeping buyers in check thereby putting downside pressure on the commodity
LME zinc prices are trading over 20% down at below $1900/tonne after hitting its 2011 high of around $2500/tonne in the early part of the year………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Watching steel price trends reminds me of a case study question that a potential employer once asked me.
The case study goes like this – “Using deductive reasoning, how many pet groomers are in the US?” Without getting into all of the details of my answer, let us say, I began answering the question logically…examining the number of people in the US, the number of people that own pets, the number of people that own pets that require grooming and so on and so forth………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

In its first-ever report about thermal coal, the International Energy Agency (IEA) paints a fairly rosy outlook for the next five years.
Thermal coal is used to fire power stations to generate electricity. It remains the world’s second most important source of energy behind only crude oil………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Consumers concerned about whether OPEC will supply the oil market with everything it needs in 2012 can take comfort from new data showing that core members of the group largely fulfilled promises to offset the loss of Libyan exports earlier this year.
Although some analysts have questioned whether OPEC’s new 30 million barrel a day production cap could overly tighten the market in the short term, the new figures suggest consumers can have some faith in Saudi Arabian assurances that oil markets will be adequately supplied next year………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

The Organisation of Petroleum Exporting Countries, OPEC, Reference Basket increased in November to settle above the $110 mark for the first time since July this year.
The oil cartel in its monthly oil market report for December 2011 showed that the upward movement of the basket, which began gradually in the first half of the month, was supported by efforts to address the Euro-zone crisis, renewed geopolitical concerns, and US data showing a slight improvement in the economy………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Traders in energy, metals and agriculture are opening or joining hedge funds after leaving financial firms that cut more than 233,000 jobs this year, data compiled by Bloomberg show.
Departures of commodity traders from banks probably rose 10 percent this year, according to Commodity Search Partners Ltd., a Brighton, England-based recruiter. Pay for that group will drop 24 percent on average, estimates Options Group, a New York- based recruitment firm………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Europe’s exchange-traded-funds industry could find itself facing its toughest times in 2012 as investors lose confidence in passively managed portfolios that have struggled to cope with markets in the grip of the sovereign debt crisis.
ETFs are investment funds that are traded like a share on stock markets. An ETF can track an index, such as the FTSE 100, a commodity, or a basket of assets. They are popular as a means to get cheap and diversified exposure to assets………………………………………..Full Article: Source

Posted on 21 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 21 December 2011 by VRS |  Email |Print

India’s leading commodity bourse MCX Ltd has become the world’s fifth largest commodity futures exchange — becoming the first Indian entity to join the top-five league in terms of the number of contracts.
In a statement issued today, MCX Ltd said that it has become the world’s fifth largest in terms of the number of futures contracts traded during the period January to June 2011, based on Futures Industry Association (FIA) volume survey and market data………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

Rio de Janeiro state will set up Brazil’s first carbon exchange on Tuesday that beginning in 2013 will allow businesses to trade credits to comply with mandatory pollution limits Rio plans to introduce in 2012, the state’s environment department said on Monday.
From now until when trading is expected to begin in 2013, the exchange will create a trading platform and define contract criteria………………………………………..Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

The EU ETS finally received some good news in response to the vote by the European Parliament’s environmental committee to approve a draft of the new energy efficiency directive, according to Trevor Sikorski of Barclays Capital. While addressing energy efficiency is a right in its own, it is expected to reduce emissions in both the traded and non-trade sectors.
The good news according to Sikorski is that in response to these measures, the draft directive now contains provisions that would:……………………………………….Full Article: Source

Posted on 21 December 2011 by VRS |  Email |Print

The EU looks likely to impose a system of carbon trading on all passenger flights taking off or landing in member states. Europe’s most senior court is expected to rule on Wednesday that airlines based outside the continent should have to pay for their carbon emissions on flights to or from EU member states, in a crucial test of climate change regulation.
At stake are millions of tonnes in carbon dioxide emissions from aeroplanes, as airlines at present have little or no incentive to cut their greenhouse gases………………………………………..Full Article: Source

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