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Commodities Briefing 23.Dec 2011

Posted on 23 December 2011 by VRS |  Email |Print

Wall Street investment bank Goldman Sachs, which is also one of the world’s biggest commodity trading firms, has issued its predictions for 2012 as markets brace themselves for a new year slump.
Goldman’s clients – which range from vast businesses to governments and wealthy individuals – are being advised to prepare for a rollercoaster ride in the first half of the year, but that a gradual recovery should take hold from the summer………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

The boom in commodity prices over the last decade has been bad news for Britain’s infrastructure. As China builds up its cities, the rise in metals prices has tempted thieves in the West to start tearing down our own.
Everything from church roofs to copper railway cabling has been targeted. Theft from the railways in London rose 70% last year. Energy firms report 700 thefts a week from substations and pylons, reports the London Evening Standard. Six people died last year trying to steal live cables………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

It is the season to be jolly and it is also the season for ‘outlook’ views on what the New Year will bring, and that is unlikely to make anyone jolly. There are many possible binary outcomes in 2012 that could move markets and commodities erratically, so the only certainty appears to be ongoing volatile price swings.
Continuing European angst and the reality of hardship and deleveraging are the most likely outcomes in 2012. A slowing China will also likely push commodity prices lower in the first half of the year………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Commodities investors should place their bets on oil and copper in 2012 while keeping an eye on other base metals and unconventional oil and gas plays, according to Scotiabank’s commodity price index outlook.
Patricia Mohr, vice-president, economics and commodity market specialist at the bank, said rising oil prices will impact companies, investors and consumers in Atlantic Canada. “The oil story is certainly very important for Newfoundland but also there are a lot of consumers that pay for home heating oil and gasoline,” she said………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

It’s nearing the end of the year and it’s probably one most commodity investors would prefer to forget but next year’s prospects are firmly rooted in what happened in 2011.
Much of the commentary in 2011 has been about whether China can achieve the soft economic landing, and therefore continue to be the engine of commodity demand that drives many bullish forecasts………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Chinese government said it would keep tariffs low next year for commodities in wide-ranging fields to boost domestic consumption offsetting the impact of falling external demand.
Ministry of Finance, the State Council’s tariff committee has finalized next year’s tariff scheme, lowering the duties for 730-odd imported commodities to an average of 4.4%, which more than halves the rate enjoyed by Most Favored Nation status under World Trade Organization rules………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Mongolia’s economy, which grew 20.8 percent last quarter, risks contraction along with a global downturn in commodity prices partly due to a surge in state spending, according to the International Monetary Fund.
Government spending jumped 50 percent in real terms to 6.3 trillion tugrik ($4.6 billion) this year, pushing inflation in the $8.4-billion-economy to 14 percent, Steven Bennett, IMF’s head of Mongolia coverage, said……………………………………….Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Energy prices have soared during 2011, and while some analysts forecast they could fall slightly in 2012, there is no guarantee any savings will be passed on to customers.
The oil price has rarely fallen below $100 a barrel since the Arab Spring threatened supplies at the start of 2011. Libya is now nearly back at full-scale production post-war, which some suggest could increase global supply and theoretically lead to price falls……………………………………….Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Global supply and demand of crude oil is expected to be balanced in 2012 if OPEC’s oil production stays at the current level of 30 million b/d, the Institute of Energy Economic Japan said Thursday.
World oil demand will grow by 1 million-1.1 million b/d to 90.1 million b/d, while total oil production is seen to rise 500,000-600,000 b/d to 90 million b/d with higher production from non-OPEC countries, such as the US and Russia, IEEJ said………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will boost crude supplies to the highest level in nine months as Libya continues to restore production, according to tanker-tracker Oil Movements.
OPEC will ship 23.63 million barrels a day in the four weeks to Jan. 7, up from the 23.23 million barrels shipped daily in the month to Dec. 10, the Halifax, England-based researcher said today in an e-mailed report. Libya is exporting about 500,000 barrels a day, according to the company………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Crude oil may rise for a fourth year to a record average price in 2012 as demand in emerging markets increases and the U.S. avoids a recession.
West Texas Intermediate oil on the New York Mercantile Exchange will reach an average of $100 a barrel in 2012, based on the median of 27 analyst estimates compiled by Bloomberg, topping the all-time high of $99.75 set in 2008. The U.S. benchmark is on course to average $95 a barrel this year………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Jonathan Barratt, managing director of Commodity Broking Services Pty, talks about the outlook for gold, palladium and oil prices in 2012. He speaks from Sydney with Linzie Janis on Bloomberg Television’s “First Look.”.………………………………………Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Gold prices took a beating in late 2011, but many experts think the path in 2012 is still paved with higher prices. Gold had a wild 2011, starting the year at $1,412 (U.S.) an ounce, hitting a low right out of the gate of $1,314 and then rallying to an intra-day high of $1,923 an ounce.
The past few months have not been kind for gold. The precious metal tanked 13 per cent in September and 8 per cent in just three days last week as a strong dollar hammered prices………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Barclays Capital is making relatively few changes to their trading portfolio in December, but one major adjustment is closing out their long-standing position - long gold.
“This is a short-term tactical move rather than signifying any change in our medium-term positive view on Gold prices, which we think will regain upward momentum once the European debt crisis is stabilised and market participants once again become concerned about inflation risk,” said Barclays………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

With just a few trading days left in 2011, we can take stock of gold’s performance vis-à-vis other assets. Gold is 13.7% higher in USD, 12% higher in GBP and 14.4% higher in EUR. Gains were seen in all fiat currencies and even stronger performing fiat currencies such as the CNY (yuan) and JPY (+9% and +8.75% respectively).
Stock markets globally had a torrid year with the S&P500 down 1.3%, the FTSE down 8% and the CAC and DAX down 19% and 15% respectively. Asian stock markets also fell with the Nikkei down 17%, the Hang Seng 20% and the Shanghai SE down 22%………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

After hitting record highs in May this year, silver prices have since fallen significantly and, a number of analysts remain fairly bearish. Several factors that are weighing on gold are weighing on silver too, these analysts say, adding that volatile price movements in the white metal have made investors skittish, with a large section preferring to stay on the sidelines and wait it out.
“In just two weeks post traversing the all-time high, silver slipped to $32.5 an ounce and gave investors the first jolt. From the low in May, silver managed to climb to $44.25 an ounce in August but could not sustain the heights for a long time…………………………………………Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

The past few months have been tough for those holding precious metals stocks, PM futures contracts or physical bullion. With silver trading down 41%, precious metals stocks down 30% and gold 15%. It has people scratching their head.
The question everyone keeps asking is when can I buy gold and silver? Unfortunately there is not a simple answer. With what is unfolding across the pond and the bullish outlook for the US Dollar index the next move is a coin toss………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Fitch Ratings’ expects lower earnings in 2012 at base metals operations on lower prices and continued cost headwinds. Constrained recovery in developed markets and slower growth in emerging markets will weigh on volumes and prices in 2012 when compared with the first half of 2011.
Consensus expectations are for prices to be range bound at above current low levels but below 2011 peak levels. Fitch believes there can be significant volatility around these levels as a result of speculative demand, currency and the small size of the markets………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Copper traders are the most bullish since October as global inventories at a two-year low add to signs that demand is improving.
Sixteen of 28 analysts surveyed by Bloomberg expect the metal to advance next week, the first positive outlook in three weeks and the highest proportion since Oct. 14. Global copper stockpiles monitored by exchanges in London, Shanghai and New York fell 23 percent since March and this month were at the lowest level since October 2009, Bloomberg data show………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Statistics show that the vast majority of commodity investors come away actually losing money; this was especially true for 2011. This year was a rough one on commodities as global instability created volatile trading, resulting in most of this asset class losing money.
But of course with big losers comes a great opportunity to buy in while a fund is still cheap. Though, it may also be that you simply want to stay away from some of these bad-performing funds to protect yourself from more losses. Whatever may be the case, we outline the five worst performing commodity ETPs of 2011………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Our goal is to help investors identify and perhaps utilize emerging market currency ETFs. As emerging economies have developed and become significant players on the global stage, their currencies have gained more recognition.
Many have been featured in so-called “carry trades” whereby investors in low yielding currencies play the higher yield spread in these currencies. This activity has waxed and waned with dramatic results given uncertain economic activity and higher volatility in emerging market currencies………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

With inflation pressures either rising or falling and with the dollar in decline, it’s important to have portfolio exposure to precious metals. Why? Currency debasement and paper money in general have recently been disrespected, making them an essential part of any portfolio.
Easy monetary policies which began in 2008 have hurt the value of the dollar. Since most commodities are priced in dollars this puts upward pressure on prices which becomes inflationary. We’ve cobbled together some good precious metals ETFs and ETNs where repetitive choices may exist but leave it to investors to pick the ones that suit them best………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Odds are that 2011 is a year many investors will be eager to forget. Ongoing uncertainty over Europe, combined with a frustrating employment situation stateside and even weakness among emerging markets has put many core asset classes in the red for the year. Most equity ETFs have struggled on the year, with major benchmarks having given back any gains that were generated in the early parts of the year.
Any declines in value is always tough to swallow, but the pain obviously increases with the magnitude of the loss. Unfortunately for some, a rather large chunk of the ETF universe has experienced big declines in 2011; through December 19, more than 350 non-leveraged ETPs had lost 10% of more year-to-date……………………………………….Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Derivative exchange, considered a new investment channel for local business in the gloomy economy, will take a leap in the domestic commodity market next year. Nguyen Duy Phuong, director of the Viet Nam Commodities Exchange (VNX), made the above statement at a conference held in the capital on Tuesday.
At the event, entitled “Viet Nam’s Economy 2011 and Prospects for 2012 - Opportunities for Commodities Exchange”, Phuong estimated that the number of VNX accounts would surge from the current 1,385, worth VND7 trillion (US$333.3 million), to roughly 5,500 accounts worth VND18.6 trillion ($885.7 million) next year………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Asian currencies are expected to trend stronger in 2012. Analysts also expect the Singapore dollar to be the star performer among the Asian units. After a roller coaster ride against the US dollar this year, the Singapore dollar is poised to move higher but at a slower pace in 2012, said currency experts.
After hitting mid-year highs of 1.20 against the US dollar, the Singapore unit has since tapered off to 1.29………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

Europe’s highest court gave unreserved backing on Wednesday to a European Union (EU) law to charge airlines for carbon emissions on flights to and from Europe, a decision likely to escalate tension with trading partners, especially the United States.
The court ruled against a group of US airlines that had challenged a law requiring that all airlines flying to and from airports in the European Union will have to buy permits under the EU’s emissions trading scheme from Jan 1. The initial cost is expected to be minimal but would rise to an estimated 9 billion euros ($11.8 billion) by the end of 2020………………………………………..Full Article: Source

Posted on 23 December 2011 by VRS |  Email |Print

New Zealand will ban the use of U.N.-backed industrial gas offsets to stop any distortion to its carbon trading scheme and bring it into line with programs in Europe and Australia, the government said on Thursday.
Climate change minister Nick Smith said offsets from projects that destroy potent greenhouse gases hydrofluorocarbon-23 (HFC-23) and nitrous oxide (N2O) would be banned from Dec 23 unless emitters had already entered into binding forward purchase agreements……………………………………….Full Article: Source

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