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Commodities Briefing 12.Oct 2012

Posted on 12 October 2012 by VRS |  Email |Print

Developing nations including India asked advanced economies to adopt policies to check volatility and speculation in commodity prices which is threatening food securities of the vulnerable countries. The Group of 24 developing countries raised this concern at a meeting chaired by Indian Finance Minister P Chidambaram on the sidelines of IMF-World Bank meet here.
“Food and fuel prices remain highly volatile with spikes in grain prices threatening food security in poor and vulnerable countries………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

India said huge liquidity infusion by the US and Europe into the financial system could result in increased investments into developing countries though there are concerns these might also fuel commodity prices.
“There are pluses and minuses. The immediate concern is that if so much liquidity is injected into the system, it might lead to elevated prices, especially in commodities. It might lead to increased speculation in commodities, crude oil, wheat, cotton, metals,” Finance Minister P. Chidambaram said………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Global oil demand is looking weaker than previously forecast as the slowing economy continues to weigh on consumption, according to monthly reports released on Wednesday by the U.S. government and OPEC.
The Organization of the Petroleum Exporting Countries trimmed its forecast for growth in world oil demand in 2013 by 30,000 barrels per day (bpd) to 780,000 bpd and said the risk remains skewed to the downside………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Though the global economy is in decline, the world’s oil demand for 2013 remains steady suggesting a leveling in international markets, OPEC said. The Organization of Petroleum Exporting Countries, in its monthly report for October, said global economic growth for 2012 was revised downward 0.2 percent to 3.1 percent.
For world oil demand, OPEC said it expected to see demand increase 800,000 barrels per day in 2013, unchanged from the previous month’s report. Demand for OPEC crude next year is expected to average 29.8 million bpd, a 300,000 bpd decline from 2012………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

The Iraqi government said Wednesday it was pulling back from its plans to increase oil production dramatically within the next five years. Baghdad, beginning in 2008, has brought in international investors despite lingering violence and protracted political concerns.
A report from the International Energy Agency had said the Iraqi oil sector “holds the key” to the country’s future. The obstacles to major developments in the energy sector, however, are “formidable.”……………………………………….Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Juerg Kiener, MD & CIO, Swiss Asia Capital, says that China is very aggressive in accumulating investments in gold space in Australia and Africa. He is of the view that next six months will be very good for physical gold investments. He feels that gold will touch USD 3,500 an ounce by 2013. He expects mining stocks to give a return of 50-100% by next year.
The silver market is more exciting and we expect double returns that we were to get on physical gold. The mining stocks have corrected heavily during this consolidation phase. The index is down by 50% from the peak. So the returns will be in the range of 50-100% by next year. One should concentrate and buy physical gold; exit ETF and paper gold………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Zurich based investment bank UBS AG lifts its 2012 average estimate for gold prices by $20 an ounce to $1,700 and its 2013 estimate to $1,900 from $1,725. “The open-ended nature of QE … promises longevity for a higher gold trade and the quantitative easing and strength in gold also supports silver,” the Swiss bank noted.
“We also materially increase our silver price 2012/13 price forecasts (including the long-term price). Copper price estimates are raised 2 per cent/6 per cent in 2012/13. Iron ore is trimmed 5 per cent/2 per cent in 2012/13, and met-coal 5 per cent in 2012. We believe thermal coal has now largely rebalanced after widespread production cuts,” they added………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Gold prices could be vulnerable to selling in the near-term, but the longer-term outlook is bullish for the yellow metal, said metal industry members. In an era of ultra-loose monetary policy, gold offers something tangible and is a hedge against future inflation, they said.
“The only direction gold is going is up. That doesn’t mean that it won’t have corrections,” said Peter Schiff, chief executive officer and chief global strategist at Euro Pacific Capital. Gold prices have struggled to take out the $1,800 an ounce level, reaching as high as $1,798.10 this month before retreating. On Thursday, December Comex gold prices settled at $1,770.60………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

The path of least resistance for gold appears to be lower for the short-term, said HSBC Holdings plc (HSBC) in a commodity research note. According to the British bank, institutional investors give the impression of losing enthusiasm for another challenge of gold’s $1,790-1,800 an ounce price levels.
The first rush of gold buying on the back of the Federal Reserve’s third round of quantitative easing appears over, and with the euro back below $1.29, gold prices could retreat, possibly to $1,750 an ounce………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Investors should double the amount of gold they hold as the value of paper currency diminishes along with the prospects for global economic growth, said a senior executive at Coutts, the private banking arm of Britain’s Royal Bank of Scotland.
Ideally, investors should aim to have 7 to 8 per cent of their assets in gold, above the wealth management industry’s average of 3 per cent, Gary Dugan, Coutts’ chief investment officer for Asia and Middle East, told Reuters………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Investors and analysts have a wide variety of different ratios that they focus on to get a better read on the market. Some like to look toward the S&P 500/gold ratio while others find solace in P/E figures. However, there is one lesser-known metric that has its roots firmly planted in the commodity world.
The platinum/gold ratio is a precious metals combination that many use to gauge how markets are performing. While it may sound a bit unorthodox at first, there is sound reasoning behind watching this comparative metric………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Fund companies are growing more wary of introducing new exchange-traded funds, and more willing to kill those that have not caught on, as they grapple with a price war in an overcrowded $1.2 trillion market dominated by the three largest providers.
BlackRock Inc, State Street Global Advisors and Vanguard Group offer ETFs in virtually every major asset class. Together, the Big Three have captured 77.6 percent of all new investor money that has come this year into the U.S. ETF market this year, up from 60.5 percent in 2011, according to Lipper………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Two of the world’s top commodity exchange powerhouses are scrambling to turn new regulations to their advantage in an important but largely hidden piece of their business, the trading and clearing of energy swaps.
Chicago-based giant CME Group Inc. has lost ground in the estimated 747.8 million pounds-a-year business of guaranteeing over-the-counter swaps to arch-rival IntercontinentalExchange Inc. in recent years, company data show, as the Atlanta-based upstart offered cutting-edge trade technology………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

The U.S. Commodity Futures Trading Commission may delay a rule set to take effect on Friday that would impact cleared energy swaps, according to a report by Bloomberg on Thursday.
New rules that were mandated by the 2010 Dodd-Frank financial oversight law require firms that have $8 billion or more in annual swap dealing activity to register with regulators as swap dealers, bringing them under additional scrutiny………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Singapore may not have a carbon tax regime yet but being a financial hub, it may be poised to be a centre for water and carbon trading. This is according to the inventor of carbon trading, Dr Richard Sandor, who was speaking at a Singapore Exchange (SGX) lecture.
Governments around the world are attempting to cut carbon emissions and reduce the effects of global warming. Regional countries are reassessing their entire energy policy to be in line with global demands to cut carbon emissions………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

Singapore unexpectedly refrained from monetary stimulus, spurring gains in the region’s best- performing currency as inflation risks trump worries over a shrinking economy. Gross domestic product fell an annualized 1.5 percent in the three months through September from the previous quarter, when it expanded a revised 0.2 percent, the Trade Ministry said.
The median estimate of 16 economists in a Bloomberg News survey was for a 1.6 percent decline. The central bank, which uses the currency to manage inflation, said it will maintain a modest and gradual appreciation of the local dollar………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

In September and early October of 2012 the Iranian currency, rial, was in a state of free fall relative to the value of major world currencies and gold. The government of Iran, as well as the Central of Bank of Iran (Bank Markazi), appeared to be helpless in stopping the nosedive.
The adversaries of Iran, particularly Israel and the US, were jubilant and attributed the currency crisis to the success of “crippling,” “paralyzing” or “lethal sanctions,” to use various descriptions of these sanctions by US-Israeli officials………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

China will have the world’s second largest carbon trading scheme by 2014, or twice as big as Australia’s regime, a latest report showed Thursday. These conclusions are outlined in a report released today, commissioned by The Climate Institute from Climate Bridge.
“Indeed, China’s pilot emissions trading schemes will cover nearly twice the emissions of Australia’s scheme in 2014. Business and politicians that assume inaction from China are taking a huge gamble on a high carbon status quo.” said Alex Wyatt, CEO of Climate Bridge, a multi-national project developer with years of experience in emission reduction projects in China………………………………………..Full Article: Source

Posted on 12 October 2012 by VRS |  Email |Print

A staffer at a federal agency says he is often asked how many entities investigate and prosecute financial firms in America. The only short answer he can give is: “a lot”. Here’s a longer one. Some entities are obvious: the Securities and Exchange Commission (SEC); the Commodity Futures Trading Commission (CFTC); the Office of the Comptroller of the Currency; the Federal Deposit Insurance Corporation; and the Department of Justice (DoJ).
Others are less well known: the Office of Foreign Assets Control and the Financial Crimes Enforcement Network are both part of the Treasury, for example. The Federal Reserve has gained new powers and responsibilities under the Dodd-Frank act; it is also obliged to pour money into the newly created Consumer Financial Protection Bureau. The Federal Housing Finance Agency has filed lawsuits against banks for allegedly selling risky home loans to Fannie Mae and Freddie Mac without proper disclosure………………………………………..Full Article: Source

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