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Commodities Briefing 07.Nov 2012

Posted on 07 November 2012 by VRS |  Email |Print

Hedge Funds cut bullish wagers on commodities by the most since June as prices retreated to a threemonth low on mounting concern that Europe’s debt crisis will worsen and US growth slow.
Money managers reduced combined net-long positions across 18 US futures and options in the week ended October 30 by 11% to 1.05 million contracts, the lowest since July 10, Commodity Futures Trading Commission (CFTC) data show……………………………………….Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

U.S. politicians have long been fixated on the sway the Organization of the Petroleum Exporting Countries has on oil markets, and this year’s presidential election has been no exception. But an oil boom in America, coupled with a boost in Russian production, is undermining the cartel’s influence, making it likely the group will cut crude production to support prices.
Both President Barack Obama and challenger Mitt Romney claimed during the campaign that their approach would help America make do with less oil from OPEC. Yet change is already afoot in the U.S. oil market and this time it looks as if OPEC has more to worry about than do American motorists………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

It’s almost over, I promise… The massive influx of calls, ads, and spam mail have made the last few months a bit taxing. The good news is after this week, you have two years to prepare yourself for it to happen all over again when the campaign cycle starts back up.
But there’s another group that’s on the verge of panic — and they aren’t the ones asking you for donations or votes…It’s not the $2.6 billion in yearly oil subsidies they’re afraid of losing. That comes out to a pittance compared to what they really lost. What they want more than anything else is control. And unfortunately for Big Oil, that’s no longer available………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

The Indonesian government is aiming to boost the country’s oil production volume to one million barrels of oil per day (bopd) by 2014 through the implementation of enhanced oil recovery (EOR) technology, and the country’s targeted output is expected to be maintained until 2025.
This figure was publicly acknowledged by state-backed energy firm Pertamina in a private press conference (attended by Rigzone) held in Singapore Oct 29………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

Dealers on Europe’s energy market commonly trade coal, gas or power at a loss to push up profits on futures prices, industry sources say, a practice that regulators want to stop.
Uneconomic or loss-leading trades are explicitly banned in the United States where British bank Barclays has been accused of using them to rig California’s electricity prices………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

China’s mining and metals companies are taking advantage of global caution to seize merger and acquisition opportunities in the sector in overseas markets, experts at Ernst & Young Global Ltd said on Monday.
The first nine months of this year saw 684 deals worth a combined $76.8 billion in the global mining and metals sector. The number of deals dropped by 16 percent year-on-year, while the total value of all transactions decreased by 43 percent compared with the same period in 2011………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

India’s gold imports may fall to 550 tonnes next year from a peak of 967 tonnes in 2011, the head of a leading trade body said, after a drop that could be as steep as 45 percent this year as high inflation and prices bite into disposable incomes.
India’s 2011 imports put it ahead of China as the world’s largest gold buyer, but they slid over 56 percent in the second quarter of this year after New Delhi hiked import duties. Overall first-half imports fell 20 percent………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

Although it happened more than 40 years ago, many Americans still rue the day back in 1971 when US President Richard M. Nixon effectively took this country off the so-called “gold standard.” Under a true gold standard, paper notes are “convertible” into pre-determined, fixed quantities of the “yellow metal.”
What actually happened back in 1971 was that President Nixon – facing huge budget and trade deficits, and a plunging dollar – enacted a series of economic moves, including the unilateral cancellation of the direct convertibility of the US dollar into gold………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

Many investors hold at least some gold in their portfolios as a form of insurance for market, currency, liquidity, or other form of financial collapse. Gold is a currency substitute, and has a constrained supply (the only increase is through mining new gold).
Primitive societies, thousands of years ago, recognized this as an intrinsic store of value, and this has not changed. The value of gold should increase during times of uncertainty, so a long position should provide a hedge for a financial or political crisis………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

The silver market often seems to be like burning both ends of a candle at the same time. Basically, somewhere in the middle the two flames are bound to meet and cause an explosion in price.
Many long term precious metal investors have wondered whether silver is just another commodity component of the CCI, or if it will eventually reassert itself as money?……………………………………….Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

Precious metals ETFs have weakened since the end of September but silver funds are down nearly twice as much as gold prices during the recent pullback. For the month ended Nov. 5, iShares Silver Trust was off 9.8% compared with a 5.4% decline for SPDR Gold Shares, according to Morningstar.
The silver ETF is currently testing its 200-day simple moving average. It hasn’t slipped below this technical indicator since late August………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

As gold investing has surged in recent years, so too has the popularity of the gold ETF space. These funds have allowed for investors of all kinds to add exposure to an asset that was once difficult for retail investors to afford. Now there is a multitude of ETFs tracking this yellow metal, each with their own nuances and methods for providing the best exposure. But many are left wondering which gold ETF is the best.
The answer isn’t quite as clear cut as a simple ticker. In reality, the answer is that it depends on your investment objectives and goals. Different funds will be better for different people. Below we outline several scenarios and which gold funds are the best for investors who fall under those categories………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

We scanned the ETP universe for the best performing “Commodity” based products in 2012, and “Grains” came back at the top of the list.
Primarily, iPath DJ-UBS Grains Total Return ETN leads the way, up 27.58% year to date. Related ETN, iPath Pure Beta Grains is next in line, having rallied 27.21% and Elements MLCX Grains Index Total Return has risen 23.68%………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

The world’s leading financial index group sowed hours of confusion in global oil markets late on Monday when it accidentally reversed the new crude oil weightings of the top commodity index, the S&P GSCI.
S&P Dow Jones Indices, owned by McGraw Hill unit Standard & Poor’s, said on Tuesday that it had inadvertently mislabeled a table showing how investors should allocate an estimated $80 billion of funds that track the index for 2013. The new weights were listed under a “2012″ heading, while this year’s were listed as new figures for “2013.”……………………………………….Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

US federal commodity position limits were defeated in court in September, but the Commodity Futures Trading Commission has not thrown in the towel. In a two-pronged attack, the agency is expected to appeal against the ruling and is also thought to be working on a new version of its regulation – but it faces some big obstacles.
The Commodity Futures Trading Commission (CFTC) is not giving up on its position limits rule, struck down on September 28 – just a fortnight before it was due to take effect – when a US court decided the agency had overstepped the authority given to it by the Dodd-Frank Act………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

Ukraine’s parliament voted on Tuesday to give the central bank legal powers to force exporters to convert at least part of their foreign currency earnings into hryvnias, indicating Kiev aims to keep its currency pegged at current levels.
Other emerging market central banks have introduced forced currency conversions, a partial form of capital controls, to defend their currencies during crises, but such measures had been eschewed by Ukraine since 2005………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

The U.S. dollar edged lower against major currencies on Tuesday as investors booked profits on recent gains, with trading subdued ahead of the results of the U.S. presidential election.
The euro hit a two-month low against the dollar before recovering to trade slightly higher as investors awaited a parliamentary vote in Greece on the country’s austerity reforms needed to secure international aid………………………………………..Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

Over the past year we have seen the US Dollar rise and fall, as did the Euro and Yen. Looking at Japan we know that when the Yen gets to high their exports suffer and while 50% of Japan’s economy may be on consumers spending in Japan, their life blood are their exports. So we have seen the BOJ take steps to keep the Yen down.
This has not been an easy task as the Euro is having trouble because of the European debt crisis, and Ben Bernanke keeps up with QE 1-2-3. The Fed knows a weaker dollar helps US exports. The Fed also knows that 70% of the US economy is based on consumer spending (this is questionable by some). And what about the Euro?……………………………………….Full Article: Source

Posted on 07 November 2012 by VRS |  Email |Print

According to ALP backbencher Andrew Leigh, “the Australian carbon price is quite typical of international schemes”. Let us take one of the examples he used on this page earlier in the week –New Zealand — and compare that claim with reality.
The starting point is that the Australian system charges $23 a tonne and raises about $9 billion a year. According to Treasury’s latest forecast, released only last week, this will rise to $29 a tonne in three years and to $37 a tonne in 2020 before soaring to $350 a tonne by 2050. The $23 price alone has been the main factor in Australia’s highest quarterly electricity price rises………………………………………..Full Article: Source

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