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Commodities Briefing 08.Oct 2012

Posted on 08 October 2012 by VRS |  Email |Print

Hedge funds increased bullish bets on commodities for the first time in three weeks as prices dropped to a two-month low on signs of slowing Chinese growth and rising supplies of everything from crude oil to coffee.
Money managers raised net-long positions across 18 U.S. futures and options by 0.2 percent to 1.24 million contracts in the week ended Oct. 2, Commodity Futures Trading Commission data show. They fell 6.6 percent in the previous two weeks. Silver wagers climbed to the highest in almost two years while bullish oil bets fell to a seven-week low. Gold holdings rose for a seventh week before prices reached an 11-month high………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Commodities are likely to come under pressure across the board on Monday in the domestic markets, taking cues from weekend close in the global markets. But the strengthening dollar could see gold rise.
With the US jobs data being better than expected, the dollar has gained and could strengthen further. This, in turn, could put pressure on gold and metals in the global market since they are traded in gold. But as regards gold, any weakening of the rupee could make imports costlier and therefore, the yellow metal may rise………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

What American consumers pay for their gas – that’s petrol to us – is one of the many topics over which Barack Obama and Mitt Romney are “duking it out” as they battle for the White House.
The message from market watchers is that the election result will be a crucial pointer to where the oil price is going – though perhaps not in the way each candidate’s supporters might like. Regardless of who wins, the November 6 polls could prove to a be an “inflexion point” for energy prices, according to commodity analysts at Barclays………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

IMF chief Christine Lagarde praised Gulf oil exporters on Saturday for their help in stabilising the global economy by managing oil prices, despite complaints by some Western countries that energy costs are still too high.
“It gives me an opportunity to thank the GCC countries for their … stabilising role in the global economy because of the good monitoring and good management of oil prices …” the International Monetary Fund’s managing director said………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

During October, the price of oil has shifted from gains to losses on daily basis. Despite the sharp shifts in the price of oil it has only declined by 0.5% during the month. United States Oil (USO) also declined by the same rate.
The decline in the price of oil may have had a negative effect on energy companies’ stock such as Exxon Mobil Corporation (XOM). What has changed in the oil market to warrant such sharp shifts in the price of oil? Let’s examine what has changed in the oil market and try to figure what’s next for oil………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Gold dropped for a second day along with commodities before a European finance ministers meeting on speculation the euro-zone debt crisis may continue to damp demand for raw materials.
Spot gold fell as much as 0.6 percent to $1,770.55 an ounce and traded at $1,771.05 as of 10:10 a.m. Singapore time. Silver dropped 1.4 percent to $34.0325 an ounce while platinum and palladium also declined. European finance ministers will meet in Luxembourg today, while German Chancellor Angela Merkel visits Greece tomorrow for the first time since the crisis erupted………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Gold will continue to shine in the coming days as investors opt for the yellow metal as their top commodity choice in a turbulent fourth quarter. The precious metal, which hit an 11-month high at just below $1,800 an ounce on Friday, is expected to flirt with the $2,000 mark by year-end.
Prices may set a new record next year as investors fear a possible “fiscal cliff” in the United States that will shrink the world’s largest economy and spur more money printing to offset the impact of a potential $600 billion spending cuts and tax hikes in 2013………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Global gold prices may try to reach $1,800 an ounce next week with Chinese market participants returning from a week-long holiday. This is after the yellow metal missing its chance to break $1,800 an ounce level this week.
Global gold prices were down on Friday and mixed this week. The most-active December gold contract on the Comex division of the New York Mercantile Exchange settled $1,780.80 an ounce, up 0.39% on the week………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Gold as an investment instrument is likely to see a 7%-10% growth in the October-December quarter largely driven by festival demand. Investment in gold exchange-traded funds (ETFs) is expected to increase a shade over 7% as compared to a 5% growth in the last quarter.
Bullion dealers and jewellers say demand for gold coins and bars is expected to grow by 10% in the third quarter of FY13 and investors who were shying away from the market due to a rally in gold prices have returned to the market in the last 4-5 days as prices have fallen to Rs 31,500 per 10 gm due to a stronger rupee………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Even before the announcement of QE3, precious metals had been holding their own in 2012. But ever since Bernanke initiated what some have called a”kamikaze” monetary policy, these coveted assets have enjoyed stellar performances. For the month of September, gold and silver jumped a healthy 4.7% and 8.7% respectively.
With both of these assets on a nice tear in the past few weeks, some are calling for a correction, while others feel that there is no turning back for these two commodity juggernauts………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Lead may be poised for further gains, although a period of consolidation may be needed first, according to BNP Paribas in a commodities snippet.
“The metal rose 23% in the third quarter. The bank looks for demand growth in 2012 of 4% to 4.5%, then 5% next year. Producers may struggle to keep up with demand in future years,” said Stephen Briggs, senior metals strategist with BNP Paribas………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Commodity ETFs give investors the chance to play the commodities market like they were never able to before. Now even part time investors are able to get a piece of these quickly evolving markets. For some, this access was not diverse enough, and demanded leveraged ETFs as an advanced way of investing, where the fund will work to double or some times even triple the outcome of an index.
These funds are not recommended for the part time or risk averse investor, but as one of the largest growing sectors in commodity investing, it seems clear some are ready to take on the leveraged risk………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

The open forex market in Tehran was still largely paralysed Sunday, four days after Iran’s national currency dropped more than 40 percent prompting protests in the capital’s symbolic Grand Bazaar.
Most official exchange shops were open in downtown but refused to conduct any business at a rate of about 28,000 rials per dollar, set by the Central Bank on Saturday in a bid to curb the currency’s plunge. The main specialised websites tracking transactions on the market did not post any rates………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

All commodities used to be traded based on the old premise of supply and demand to set their prices before the 1970s. Since that time, the commodity markets that proliferated on Wall Street and around the world have been the basis of their values to determine market prices.
Wall Street argues it needs the liquidity provided by the speculators in the markets to provide a true market. What they really mean is there would not be the volatility needed to generate big profits/losses by the traders and speculators. Unfortunately, we the consumers of these commodities suffer because of the “volatility.”……………………………………….Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

Of all characteristics that made the 2007-2008 financial crisis unique, one stands out: The simultaneous decline of almost every asset category. US stocks dropped 37 percent, German stocks 42 percent, and Chinese stocks 62 percent; commodities dropped 37 percent (with oil and copper dropping 54 percent). This means that investors had nowhere to hide, taking multiple hits across their portfolios.
The roots of this broad decline in multiple asset categories can be traced back to the September 2001 Greenspan “put,” which lowered the cost of owning different assets………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

The World Bank cut its growth forecast for Asia on Monday in a new sign of the impact of weakening global demand and warned China’s cooling economy faces the risk of a “more pronounced slowdown.”
The bank cut this year’s growth outlook for developing Asia-Pacific economies to 7.2%, down from its May forecast of 7.6%. The bank cut its forecast for China, the region’s biggest economy, to 7.7% from May’s 8.2%………………………………………..Full Article: Source

Posted on 08 October 2012 by VRS |  Email |Print

The world will be “cooking with gas” on climate change if the United States and China can reach agreement on how their national actions mesh with a global framework, according to former Australian prime minister Kevin Rudd.
Identifying the next five years as a time of “profound transition” for US-China relations, Mr Rudd said it needed political leadership from these two major powers to make the global rules system work. “China has massive national self-interest in ensuring that climate change is effectively dealt with,” Rudd told the Foreign Correspondents Association in Sydney on October 5. “Otherwise, China’s moment in the sun – that is, the next decade or two of China’s economic and political position in the world – could be undermined.”……………………………………….Full Article: Source

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