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Commodities Briefing 29.Oct 2012

Posted on 29 October 2012 by VRS |  Email |Print

Speculators lowered bullish wagers on commodities for the third straight week, the longest streak since April, as prices erased this year’s gain on mounting concern about slowing economic growth.
Hedge funds cut net-long positions across 18 U.S. futures and options by 0.2 percent to 1.18 million contracts in the week ended Oct. 23, the lowest since July 24, U.S. Commodity Futures Trading Commission data show. Copper holdings fell the most in seven weeks, and sugar wagers dropped to a one-month low. Bullish bets on gold slumped the most in three months………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Commodities prices have been in freefall in recent weeks—a victim of money fleeing risk assets, technical resistance and Federal Reserve actions that finally seem to have lost their impact.
The commodity story is part of a larger narrative in which investors have become increasingly cautious as 2012 winds to a close, pulling money from the markets and causing drops across most investments other than bonds. The looming fiscal disaster in Washington coupled with the seesaw presidential election and the European debt crisis have been persistent thorns for investors………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

A consolidation is underway in global grain trading as the major players position themselves for an expected surge in demand for food commodities, particularly in Asia. The following are some of the key moves during the last couple of years:
OCTOBER 2012 - Archer Daniels Midland bids $2.8 billion for Australia’s GrainCorp in a deal that could give it a platform to supply Asia. MAY 2012 - Japanese trading house Marubeni Corp. agreed to buy U.S. grain merchant Gavilon for $5.6 billion including about $2 billion in debt. The deal positioned Japan’s top grains trader to benefit from China’s booming demand for imported corn from the world’s biggest supplier………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Exxon Mobil (XOM) is no longer the world’s number-one oil producer. As of Friday, that title belongs to Putin Oil Corp - oh, whoops. I mean the title belongs to Rosneft, Russia’s state-controlled oil company.
Rosneft is buying TNK-BP, which is a vertically integrated oil company co-owned by British oil firm BP (BP) and a group of Russian billionaires known as AAR. One of the top-ten privately-owned oil producers in the world, in 2010 TNK-BP churned out 1.74 million barrels of oil equivalent per day from its assets in Russia and Ukraine and processed almost half that amount through its refineries………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

A rise in gas demand for power generation in Europe after 2020 may provide a case to extract gas from Norway’s Arctic region, which is so far considered too remote and expensive to compete in the market, an IEA official said.
Norway plans to award oil and gas exploration drilling permits in up to 86 blocks next year, mostly in the Arctic region where exploration is booming after recent large discoveries………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Gold traders are the most bullish in three weeks as investors’ bullion holdings rose to a record on mounting speculation that central banks will add stimulus to bolster economic growth.
Fourteen of 26 analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three were neutral. Investors boosted holdings in exchange-traded products (ETP) to an all-time high of 2,585.1 tonne last week, valued at $142.4 billion, data compiled by Bloomberg show. Hedge funds’ bets on a rally are near the biggest in more than a year, according to US Commodity Futures Trading Commission data………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Gold is not in a “bubble” at current prices, says a leading analyst. The precious metal is up 9.7 percent this year. Gold closed on Friday at $1,716/oz on the London Bullion Market, flat over the previous day’s $ 1,715.50/oz.
Commodity prices ended broadly lower on Friday as weakness in corporate earnings reports dimmed the outlook for the US economy. Deutsche Bank AG favors precious metals and is neutral on oil and industrial metals, Michael Lewis, head of commodities research at the bank, was quoted as saying by the Bloomberg news agency at the World Commodities Week conference in London………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Across the broad, global commodity prices eased last week amid flow of weak economic data. No wonder, growth-driven commodities were all affected. Crude oil markets saw prices drift lower most of the time last week. All base metals except zinc were down over the week, while all precious metals lost value except silver.
Grains prices were mixed last week with focus moving away from corn and soyabean to wheat as there was speculation if Ukraine would ban exports. China’s September data were mixed for commodities………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Massive global monetary easing and out-of-control government spending will send gold soaring almost threefold in the next two years — to $5,000 an ounce, says Peter Schiff, CEO of Euro Pacific Capital.
“I think gold is going to go up against all currencies,” he tells CNBC. “Central banks around the world are being too loose.” Spot gold slumped to a seven-month low of $1,698.39 Wednesday, but that’s not going to last long, Schiff says………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

What Will the Price of Gold Be in January 2014? While a lot of us at Casey Research do not like making price predictions, and definitely ones accompanied by a particular date, it is hard to ignore the correlation in between the US monetary base and also the gold price.
That correlation says we’ll see $2,300 gold by January 2014. You will find lots of long-term charts that show a connection in between gold and numerous other types of cash (and credit). Most show that one outperforms till the other catches up. But let’s zero in on our present circumstances, namely the expansion of the US monetary base since the monetary crisis hit in 2008………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Gold traders look frustrated at gold failed to climb through the $1800 mark but the market awaits the much bigger event-US Presidential election on November 6 for further developments, Austin Kiddle, Sharps Pixley said in a note.
Even as gold market sentiments remained subdued, news of more Central Bank gave cause for cheer. Brazil added 1.7 tons in September while Turkey added 6.8 tons. Brazil last added gold in December 2008. The buying is expected to continue given the lower prices and currency risks in the developed world………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Britain’s biggest over-the-counter bullion dealer saw turnover triple in 2011as the euro panic pushed investors towards gold. East London-based Baird & Co recorded turnover of £1.35 billion in 2011, up from £417 million the previous year.
Profits were £5.9 million, up from £4.3 million in 2010. Shareholders enjoyed a dividend of £1.2 million, up on last year’s £1 million payout………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

There’s not only a similarity in how gold and silver trade simultaneously period, but additionally how they trade at comparable milestones, in spite of the reality that these milestones are occasionally reached at various occasions. This could trigger silver or gold to become the top indicator, based on the specific milestone.
The 1980 peak for each gold and silver is certainly an essential milestone. For this 1980 milestone, gold is undoubtedly the top indicator (since gold has currently passed its 1980 high), so it could help us to project what silver may do about this milestone………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Investment demand should support silver, as the metal benefits from higher gold prices, and may benefit the most from loose monetary policy and a rebound in risk appetite, according to BNP Paribas.
However, silver could be vulnerable to a sharp correction once the gold rally ends. The poor consumer demand is hurting the industrial use of silver, while high prices and poor demand have dented jewelry demand, said Anne-Laure Tremblay, precious-metals strategist with BNP Paribas………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

Strikes at mines in South Africa may push global platinum production below demand this year, erasing expectations of a surplus, according to TD Securities Inc.
The shortfall in 2012 may be about 200,000 ounces, Bart Melek, the Toronto-based head of commodity strategy at TD Securities, said today in a telephone interview. Earlier, he predicted a surplus of 216,000 ounces. Last year, output exceeded demand by 430,000 ounces, he said………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

The mining boom may be coming off its heady heights but other parts of the economy might start to pick up steam, according to an economist. As commodity prices have fallen from their 140-year highs, mining company’s have started shelving projects that have become unprofitable.
The Reserve Bank of Australia, meanwhile, has cut its interest rate by 150 basis points in the past 12 months. And, HSBC Australia chief economist Paul Bloxham says, that will start to provide support for the industries that have been weakest in the past couple of years, such as manufacturing, domestic tourism and retail………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

While key commodities such as corn, gold, and copper often dominate the spotlight, a group of metals known as ‘rare earths’ have a reputation of truly shining through with amazing returns.
In fact, some of the top metals in the group, such as Neodymium, Dysprosium, Yttrium, and Erbium, put up gains in the past that would make metals such as silver or gold’s historic performances in 2011 look down-right bearish………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

ETF investing turned the commodity world from a difficult-to-reach asset class to exposure that any retail investor could quickly add to their portfolio. The years have seen a number of innovative products come and go, but through thick and thin, a select group of funds have broken away from the rest, as they have maintained their popularity.
And just like any other business, these funds need to make money to stay open (and to hopefully make you money), as they have plenty of operating costs to take care of………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

A simple way to create a diversified portfolio is to trade in ETFs, or Exchange Traded Funds. Such funds are based on a basket of investment products and can remove the uncertainty of picking individual stocks.……………………………………….Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

The Central Bank of Iran is planning to introduce a second official currency exchange rate for imports, Mehr news agency has recently reported. The new measure, which should be implemented within the next few weeks, has been approved by the government.
But why is this change necessary? Well, the new currency will aim to bring back stability to the volatile Iranian market. Earlier this month, the Iran rial plunged significantly against the US dollar in open market trade on Monday………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

China’s currency hit a record high against the US dollar for the second straight day on Friday, amid US political pressure and growing confidence in the domestic economy, analysts said.
The currency touched an intra-day high of 6.2380 to the dollar at the open, marking the highest level since 1994 when the country launched its modern foreign exchange market………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

In the final televised presidential debate, Mitt Romney promised that if he is elected on Nov. 6 he will “label China a currency manipulator” on “day one” of his presidency. He also pledged to pay more attention to trade with Latin America, noting that the region’s “economy is almost as big as the economy of China.”
To be consistent, Mr. Romney should call out the Federal Reserve on day two for engaging in its own currency manipulation by way of “quantitative easing,” which undermines the value of the dollar relative to Latin American currencies………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

China’s efforts to combat climate change win praise from leading expert. A global platform for carbon trading may be in place this decade, an official at one of the world’s major environmental think tanks said.
China’s emissions trading system, which is likely to be the world’s second-largest carbon market by 2015, may be a major player if it is connected to the proposed world system, said Andrew Steer, president of the World Resources Institute………………………………………..Full Article: Source

Posted on 29 October 2012 by VRS |  Email |Print

NYSE Euronext will close a European carbon-trading exchange following a decline in trading and a series of scandals that rocked the region’s emissions market in recent years. Paris-based BlueNext SA, majority-owned by the Big Board parent, will cease operations on Dec. 5, according to a spokesman for the market.
The closure comes as NYSE Euronext has sought to trim underperforming or less-critical ventures to help deal with a lingering slowdown in trading activity. Earlier this year, the exchange group ended a joint venture geared toward developing carbon markets in the U.S. and Asia………………………………………..Full Article: Source

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