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Commodities Briefing 09.Oct 2012

Posted on 09 October 2012 by VRS |  Email |Print

Assets in exchange-traded products (ETPs) in the commodity sector reached a record of $207 billion in the third quarter, driven by gold products as central banks launched new stimulus programmes, ETF Securities said on Monday.
Assets in gold ETPs jumped by $22.7 billion to a record $151.4 billion as investors worried about the risk of debasement of currencies as central banks effectively began printing money again, said Nicholas Brooks, the firm’s head of research. The rise in assets included the impact of both investor buying and rising prices………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

The global economic recovery is weakening as government policies have failed to restore confidence, the International Monetary Fund has said. It added that the risk of further deterioration in the economic outlook was “considerable” and had increased.
The IMF downgraded its estimate for global growth in 2013 to 3.6% from the 3.9% it forecast in July. One of the biggest downgrades was to the UK economy, which the IMF expects to shrink by 0.4% this year………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

India’s government is proposing to strengthen the commodities market regulator, a move which could help boost the moribund trade in futures of agricultural products and metals. Until now, India’s government has refused to hand control to the regulator, which exists but must seek government approval before punishing rules violators. The government in the past has argued that it needed a large hand in overseeing trade in commodities, especially food products that people rely on as their staples.
But the government’s role in the market has not stabilized prices. Meanwhile, the lack of an independent regulator – like the one overseeing India’s stock exchange – has put off large financial investors and stifled the development of a commodities trading business………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Prices for a wide range of commodities fell Monday after a new forecast of slower growth in China ramped up worries about the global economy. The World Bank’s lowered expectation for China was one of three issues that prompted investors to sell riskier assets on a day when volumes were light because of the Columbus Day holiday.
The bank revised its economic growth forecast for China to 7.7 percent from 8.2 percent, which was issued in May. It said there is a risk of a more pronounced slowdown in China than currently expected, citing weak global demand. The bank also cut its forecast for developing Asia-Pacific economies to 7.2 percent from its May forecast of 7.6 percent………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

The International Monetary Fund’s 2013 growth forecast for Australia has been moderately reduced due to the country’s significant exposure to international commodities markets. The IMF’s latest World Economic Outlook has reduced the forecast for Australian growth next year to 3% from 3.5% as predicted in April.
Australia’s significant dependence on commodities export is a key reason for the downgrade in its growth prospects, with the slowdown in the Chinese economy leading to a decline in spot prices for stalwart resource exports such as iron ore and coal………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Much has been written in recent times on how Ghana has been getting it right on many fronts, notably politics and economy. President Obama’s choice of the country as one of the very few in Africa he visited in 2009 was another strong statement on the place of Ghana in this region.
Even if some of us that have strong presence on the internet are not happy with the negative and stereotypical attitude of many Ghanaians to matters Nigeriana, we still must give it to this country that best fits the description “Nigeria’s twin”, if anything like that exists………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Concerns over reports Monday of a declining Asian economy helped push crude oil prices down for the second straight trading day. The World Bank downgraded its growth expectations for the Asia-Pacific region, where the Chinese economy is showing signs of flattening.
In Europe, meanwhile, trouble continued, though leaders there agreed to set up a $648 billion recovery fund. Though the IMF praised Middle East economies for maintaining a watchful eye on global oil markets, the slide in energy prices continued into the second week of October………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Oil producers from across the MENA region will contribute US$740bn towards energy projects over the next five years, according to a report from Arab Petroleum Investments Corporation (Apicorp).
Saudi Arabian producers have been slated to lead the way, with the report stating that companies from within the kingdom - primarily Saudi Aramco and Saudi Basic Industries Corporation (SABIC) - committing investments totalling US$165 billion for the five-year period from 2013 to 2017………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

It is a fair bet that no one at the State Department is toasting Hugo Chávez’s victory in Venezuela’s presidential election this weekend. But one group will likely cheer: Venezuela’s fellow members of the Organization of the Petroleum Exporting Countries.
This doesn’t reflect any international appeal of the Venezuelan president’s brand of Bolivarian Revolution. Rather it has to do with what the practicalities of that revolution have meant for the country’s oil production………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Coal stocks could be making a comeback as it begins to look more attractive to utilities, Sterne Agee analyst Michael Dudas said Monday on CNBC. “I think you’re seeing a lot of utilities switch back right now,” he said on “Fast Money.”
“I do think you’re seeing some more coal dispatches relative to gas, and that should be helpful for demand and pricing going forward.”……………………………………….Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

While gold bugs have long been aware that gold is, and always has been, a monetary metal many others in the investment community have, in the past, continued to feel otherwise and valued it accordingly as just another commodity.
But this perception is changing as recent events, and price movements, have emphasised that the gold price moves are currently being dictated more by global economic and political factors than by normal commodity economics of supply and demand……………………………………….Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

BNP Paribas things gold prices may wait till second quarter of 2013 to break $1900 an ounce level. It looks for gold to average $1,795 per ounce in the fourth quarter of this year and $1,865 in the first quarter of 2013 and $1,900 in the second, says BNP Paribas in an updated forecast.
The French bank looks for gold to continue working its way high over the next year, with monetary policy likely to be the key influence. Prices rose sharply since mid-August on expectations for more Federal Open Market Committee easing followed by actual accommodation………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

For global investors holding gold, the past few weeks must have been a happy time. Since the United States Federal Reserve announced a new round of “open ended” quantitative easing, or QE3, on Sept 13, gold prices have risen from $1,730 to $1,775 per ounce.
On Oct 2, Deutsche Bank even raised its 2013 gold price outlook to $2,113 per ounce, claiming in a research note that, “a surge in the gold price above this level ($2,000 per ounce) is only a matter of time”. Should this grab the attention of China?……………………………………….Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Speculators continue to build net-long positions in precious and base metals, going on seven weeks in a row for gold and platinum group metals markets, according to U.S. government data released late Friday.
Yet some market watchers noted while net longs increased in gold, the amount of new buying is beginning to slow………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

The global aluminum market remains oversupplied, creating pressure for prices, said Citi Research in a commodity research note. The firm is forecasting a price of 93 cents a pound for the fourth quarter of this year.
“The aluminum market boasts one of the higher demand growth rates amongst the major commodities but the capacity and supply curve somehow manages to remain one step ahead of demand, driving a growing surplus,” Citi Research added………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Though the past year has revolved around weak zinc prices, rising stockpiles and the general threat of a deteriorating economic recovery, zinc miners are an optimistic bunch.
Zinc has for some time now been identified as a metal at the crossroads of expanding emerging market demand and supply gaps at a number of large zinc mines. Earlier this year, when refined and mined zinc prices began to climb to levels not seen in years, excitement began to build. 2012 was to be the beginning of zinc’s rise………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Commodity trading in the European ETF market continued to grow over the last week, making it the second largest area in European ETPs, according to trading figures released today by Lyxor.
Reported weekly on-exchange ETP turnover increased by 1% on the previous week at €9.48bn. Underlying equity market activity fell by 17.7% at €98bn. Lyxor also found that regional turnover continued to fall and was down by 15.8% on the previous week………………………………………..Full Article: Source

Posted on 09 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 09 October 2012 by VRS |  Email |Print

Commodity Trading Advisors (CTA) were the worst performers of all hedge fund strategies last month, despite some hedge funds making good returns with this strategy in the first half of the year.
The latest statics from Lyxor reveal that both short term and trend following CTA’s lost money this month, with negative returns of 2.3% and 1%, respectively………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

When investors aren’t worrying about euro-zone survival, employment growth in the U.S., what Israel may be planning for Iran or what Iran may be planning for the Strait of Hormuz, they worry about the end of the commodity boom.
As realization slowly dawns that even China isn’t insatiable, and that slowing old economies eventually mean slowing new economies too, the currencies that benefited most from rising commodity prices attract ever more jaundiced scrutiny. Every week another ‘is the game up for the Australian dollar?’ piece appears, with metronomic regularity, from one analyst’s cloister or another………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

The currencies of China, Malaysia and Thailand are undervalued relative to the economies’ medium-term fundamentals, and the countries should focus on fiscal policy to support growth, the International Monetary Fund said Tuesday.
In its World Economic Outlook, the IMF said that while foreign-exchange movements since the global financial crisis had been consistent with demand rebalancing, gains in currencies of nations with external surpluses had halted over the past eight months………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

Ed Davey, the climate change minister, calls for 30% EU carbon reduction target by 2020, far tougher than the existing 20%. The EU should raise the price to businesses of producing carbon dioxide to reduce greenhouse gases and improve efficiency, the Liberal Democrat energy and climate minister told a conference in London on Monday.
Ed Davey said the price to businesses was too low, because companies had been awarded an excess of permits to produce carbon under the EU’s emissions trading scheme, far greater than the number they need………………………………………..Full Article: Source

Posted on 09 October 2012 by VRS |  Email |Print

No new carbon dioxide emissions reductions targets for 2030 will be announced until after the next EU parliamentary elections in 2014, the EU’s top climate civil servant has said.
“Let’s get real: We won’t be able to do everything by 2014 like we did on the climate and energy package in 2009,” Jos Delbeke, the European Commission’s director general for climate told a conference in Brussels on 5 October. “The time is not there,” he added. “We will have to be clear on 2030 early in the next Commission period, and that means 2015 or 2016.”……………………………………….Full Article: Source

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