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Commodities Briefing 02.Oct 2012

Posted on 02 October 2012 by VRS |  Email |Print

Miners’ valuations have plunged, China is slowing and commodity prices have all moved off highs. Is the end of the commodities “supercycle” nigh? Wiktor Bielski, global head of commodities research at VTB Capital doesn’t think so.
“The commodity supercycle is taking an extended siesta but we think it still has a long way to go,” Mr Bielski says. “We believe there is a mistaken perception that the term supercycle implies an unbroken period of strongly rising prices, while the more correct definition is a long period of rising prices in real terms, but which can be periodically broken by often-extended corrections.”……………………………………….Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Commodities are the necessary building blocks of the world. Glance around you. The world’s seven billion people need resources, and that’s why we recommend investors consistently allocate a portion of their portfolio to a natural resources investment.
Not every investment is the same, though. Even within the commodities space, when looking at measures such as correlation, performance and risk, two indexes can have very different effects on a portfolio‘s results………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Key commodities remained under pressure on Monday after fresh data revealed China’s manufacturing sector contracted for a second straight month in September, Japan’s business confidence ebbed, and signs of fresh recession in the already debt-trapped euro zone.
However, brent crude, gold and copper ended the quarter through September with hefty gains, thanks to the series of stimulus measures by central banks in the US and Japan and a bond-buying plan by the European Central Bank………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Goldman Sachs analyst Jeffrey Currie issued an upbeat report on the global commodities market. The considerably positive outlook for commodity prices over the next 12 months will most likely result in the investment bank’s increasing its focus on commodities trading soon. Currie believes returns from commodities for the period will be more than 18%, and he expects almost half of the gain to be realized by the end of this year.
Goldman Sachs, with its strong position and considerable expertise in the highly competitive commodities trading market — which includes global investment banking giants like UBS, Deutsche Bank, Morgan Stanley and Barclays — is positioned well to derive maximum value from such an uptick………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

New Zealand commodity prices rose for a second month in September, in the strongest monthly gain in a year-and-a-half, led by skim milk powder and aluminium. The ANZ commodity price index rose 3.5 per cent last month, about 14 per cent weaker than the same month a year ago. Excluding dairy prices the index rose 0.5 per cent.
The largest increase was shared by skim milk powder and aluminium, both up 11 per cent, followed by butter and whole milk powder up 8 per cent, wool and apple prices gaining 6 per cent, cheese climbing 5 per cent, venison up 2 per cent and logs and beef rising 0.5 per cent………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Federal limits on commodity market speculation, the prospect of which has haunted Wall Street’s big banks, pension funds and energy merchants for five years, may have died in the District of Columbia courts on Friday.
Just two weeks before the “position limits” rule was to take effect, U.S. District Judge Robert Wilkins rejected it and sent it back for an overhaul, a move that even some opponents said was surprisingly tough………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

A Swiss political party is seeking to drum up support for a national vote to ban banks and other financial institutions from speculating in agricultural commodities, in the latest sign of growing political backlash against record food prices.
The exact size of investment in agricultural commodities from Switzerland is unclear, although it hosts banks UBS and Credit Suisse which both invest in the sector through either index funds or exchange traded funds. It is also home to multinational commodity firms such as Glencore and Cargill………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

The pre and post-QE3 “specuphoria” that lifted certain assets quite nicely during the past quarter continued to show signs that it is disspating (at least until Fed President Evans stoked the bulls with visions of QE3 lasting through 2013) as “reality” catches up with overly bullish market participants. “Reality” as applicable to the markets means the situation in Europe, China, and the US.
The fourth quarter began with modest losses in precious metals as well as the US dollar and the euro this morning. Spot gold started the new month with a $3 loss and it was quoted at $1,768 per ounce in New York………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

This morning, when the gold retreated in markets, nobody should have thought of a tsunami in gold prices invading the bearish sands. The prices reached $1,794.40 an ounce, the highest for a most- active contract since Nov. 14 on Monday.
It simply happened and all it took was a few words from the President of Federal Reserve Bank of Chicago, Charles Evans. He maintained that unemployment probably will not fall to 7 percent until 2014 and that the Federal Reserve can do a lot more to boost the economy………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Gold Bullion dipped below $1770 per ounce Monday morning in London, though it remained in line with the last fortnight’s trading, while European stock markets rallied along with the Euro following news late last week that the capital needs of Spain’s banks are within existing provisions.
“On the monthly chart, the bull trend remains intact, with uptrend support at $1594 and resistance at $1790, the previous high,” says technical analyst Russell Browne at Scotia Mocatta. “[Gold seems] to have established a base now down at $1740,” adds Dave Govett, head of precious metals at brokerage Marex-Spectron………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

For the sixth straight week, speculators added to their bullish gold futures and options contracts traded on the Comex division of the New York Mercantile Exchange and bumped up their bullish positioning in most other Comex and Nymex precious and base metals, according to U.S. government data released Friday.
For the week ended Sept. 25, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report added to their net-long positions in gold, platinum group metals and base metals markets for both the disaggregated and legacy reports. Speculators’ bullish positions in silver rose in the disaggregated report but were slightly pared back in the legacy report………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Gold prices have possibly established a base now at $1,740, but “we also seem to have a ceiling in place between $1,785 and $1,790,” Marex Spectron’s David Govett said to Angela Sharda of Fast Markets.
“It will take some help from other markets to break us one way or the other, as gold does not yet seem to have the appetite to do this by itself.” he added. Meanwhile, two data releases for the evening would determine the trajectory of gold prices for the coming days………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Iran’s OPEC governor Mohammad-Ali Khatibi has reiterated that the country’s crude oil exports have not seen any change despite tight Western embargoes on the Islamic Republic’s oil sector. “The oil exports process is similar to previous months and the exports are carried out as done in the past,” Khatibi said on Sunday.
Noting that the oil prices could not be forecasted, he added, “The oil price fluctuations depend on a variety of factors. We cannot say for sure that a specific factor would drive up or down the prices.”……………………………………….Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Brent crude oil prices could climb to $120/bbl by December 2012 on stimulus measures and supply outages in key regions, according to Bank of America-Merrill Lynch. The outpouring of central bank liquidity should provide a boost to depressed global business confidence.
“Monetary easing will likely translate into rising capital flows to emerging markets (Ems), creating upside pressure on EM currencies and in turn EM demand for real assets, including oil. On the back of the improved momentum in the global economy and a tight supply side for oil, BofAML has raised its average 4Q2012 forecasts for Brent curde to $114/bbl from $108/bbl………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Silver-linked ETFs were some of the best-performing exchange-traded products in the third quarter ended Sept. 30, taking six out of the 10 top-performing spots, as investors positioned themselves to take advantage of the government’s latest round of quantitative easing.
The Global X Silver Miners ETF and the iShares MSCI Global Silver Miners Index Fund topped the list, each rallying 33 percent in the past three months. The physical silver ETF, ETFS Physical Silver ETF, gained 25.5 percent in the same period………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

The long and winding road that has been the attempted merger between miner Xstrata and commodities trading house Glencore seems to be nearing its end. On Monday, the board of Xstrata recommended the “all-share merger of equals” to its shareholders, putting a controversial £144 million ($232 million) bonus package up for vote.
Also, Xstrata confirmed that CEO Mick Davis would lead the combined company, worth about $90 billion, for six months, only to step down (without taking a big bonus) and let billionaire Ivan Glasenberg take the reins. All eyes are now on the Qatari sovereign wealth fund, which is one of the major shareholders and will be crucial in tilting the scale to either side………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

The biggest restrictions on rubber exports since 2009 and record consumption are sending prices back to a bull market after a five-month slump, increasing costs for Bridgestone Corp. and other tiremakers.
Thailand, Indonesia and Malaysia, accounting for 70 percent of global output, agreed to cut shipments by 300,000 metric tons, starting yesterday. That’s as much as China, the biggest user, imports in about five weeks and exceeds the 2013 supply surplus forecast by the International Rubber Study Group, which represents 35 nations………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Over the last few weeks, the Indian Rupee has shown another one of its sharp waves of appreciation. The move has been quite a linear one with the support of central bank, while in the past such sharp moves were met by intervention to support the dollar. This move in the currency has startled and struck many traders and hedgers in Indian commodities markets.
In this report, we present some pointers, which should help us in planning a better strategy in the coming months to deal with the disconnect in the international and domestic prices of commodity futures. To begin with, let us look at the factors that have been responsible for the Rupee’s move………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Iran’s currency has fallen 16 percent in a single day to hit a record low against the U.S. dollar and other foreign currencies in street trading. Street traders said Monday it reached 34,500 rials to the dollar. It was 29,500 rials on Sunday.
The collapse of the currency is a sign of the impact of Western sanctions imposed over Iran’s nuclear program. The West suspects Iran is aiming to build nuclear weapons, a charge Tehran denies………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Brazil’s president, Dilma Rousseff, and her finance minister, Guido Mantega, are attacking the U.S. Federal Reserve for embarking on a third round of quantitative easing. By aggressively buying bonds, the Fed aims to push interest rates lower, and that will nudge the dollar down as well.
This will hurt Brazil and other developing-country exporters, Mantega says, and what’s more, it’s meant to. To him, the U.S. has declared “currency war.”……………………………………….Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

Australian and Californian government officials have pledged to work towards linking their nascent carbon markets, they said on Sunday. Speaking on a state visit to the US, Australia’s climate change secretary, Mark Dreyfus, said the two governments would set up a forum to share experiences on climate policy, including how best to build carbon markets.
“California has long been at the forefront of US efforts to reduce carbon pollution. What happens here is watched closely by others states and nations,” said Dreyfus in a prepared statement………………………………………..Full Article: Source

Posted on 02 October 2012 by VRS |  Email |Print

The European Commission proposed to prohibit in the region’s carbon trading program the use of certain carbon credits issued after 2012 by countries without binding emission-reduction targets, according to two people with knowledge of the matter.
The European Union’s regulatory arm presented the proposal at a meeting of climate officials from national governments on September 19, the people said, declining to be identified because the information isn’t public………………………………………..Full Article: Source

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