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Commodities Briefing 08.Nov 2012

Posted on 08 November 2012 by VRS |  Email |Print

Barack Obama’s re-election as the President of the United States has proved favourable for commodities markets amid hope that the recently announced third round of quantitative easing (QE3) for brining liquidity into the financial system would continue in future as well.
Prices of non-agri commodities started moving upwards since Monday afternoon when opinion polls in the US showed Obama’s possible win. Since then, prices of base metals, led by copper, shot up by two per cent, while gold hit a two-week high of $1,729 an oz………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

The global economic concerns may play a greater role than any weather event for the immediate future, though we had a modest 5-7% pop in gasoline a week ago ahead of and during hurricane Sandy. Crude oil prices have again taken it on the chin and it will take confidence in the global economic picture and a cold winter to see prices back close to $1.00/barrel anytime soon.
South American weather will become more and more important to the soybean market, but I continue to maintain a longer term bearish aspect in soybeans. Since it appeared that the U.S. crop would be a bit better than the trade expected, prices have dropped more than $2/bushel………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Commodities are still attractive for pension funds on inflation concern, said Douglas Hepworth, director of research at New York-based Gresham Investment Management LLC. The company has about $15 billion in commodities under management, Hepworth said.
“We haven’t seen many pension funds withdrawing from commodities. There was one large plan that decided it no longer wanted to participate in long-only commodities program, and they are moving toward long-short and risk-budgeting programs. But we haven’t seen people abandoning the asset class. There is a strong desire to get real assets.”……………………………………….Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Britain will need to invest 330 billion pounds in its energy sector, excluding networks, by 2030 and return its economy to growth to meet carbon emissions reduction targets, the London School of Economics said in a report on Thursday.
Britain aims to cut carbon emissions by 34 percent below 1990 levels by 2020 and by 80 percent by 2050, but does not have a binding target for 2030………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Bullion watchers are hopeful that President Obama’s re-election would mean extending the easy money policy by the Federal Reserve. Historically gold prices were lower during election years and then bounced back the year after the election. Even seasonally, going back 30 years, the historical seasonality of gold has been to rise during September, with a subsequent correction in October with the exception of few years.
The demand supply fundamentals for gold show a well-balanced market with a minor increase in supply growth while demand robust and possibly outstripping supply. Beginning in 2000, production remained flat, even declining in some years while gold made new highs………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Gold continued to move higher on Wednesday morning on the expectation that the US will continue to provide monetary stimulus after Barack Obama won a second term as president. Spot gold was quoted at $1,725.64/1,726.21 per ounce, up $14.63 on the close and having peaked at $1,729.85 earlier.
It broke back up through $1,700 yesterday afternoon - it has gained around $40 in the past 17 hours or so - after early exit polls suggested that Republican challenger Mitt Romney would fail to unseat Obama. “An Obama victory was perceived to be good for gold and so it has turned out to be,” David Govett, head of precious metals at Marex Spectron, said………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

It is not just Indian bullion retailers who are gearing up for the festival of lights in India next week. The World Gold Council too has noted a significant jump in sales from end-October and early November, in a run-up to the festival.
India’s import of the precious metal could be appreciably higher than was earlier envisaged, according to the Council. At a press conference, the global organisation said that India could import around 800 tonnes this year, way more than the 640 odd tonnes that was spoken about earlier this year………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

The Pentagon and Toyota Motor Corp. are trying to crack China’s global monopoly on mining the most valuable rare earths used in unmanned military drones and electric-car motors.
The U.S. Department of Defense and Asia’s biggest carmaker are working with Canada’s Ucore Rare Metals Inc. and Matamec Explorations Inc., which are developing North American mines that would boost supplies of so-called heavy rare earths. Those are the less-abundant members of a group of 17 chemically similar elements critical to make a host of products from wind turbines to high-performance magnets for cars and weapons………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

China’s plan to buy base metals for state reserves in an effort to cushion domestic smelters from slowing economic growth would support prices but would not significantly reduce bulging stockpiles, traders and analysts said on Wednesday.
China is the world’s biggest consumer of base metals, but demand has faded this year as exports have weakened, pushing stocks of copper and aluminium to near-record highs and driving some smelters into loss-making territory………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Energy commodity exchange traded products (ETPs) attracted strong inflows in October, with U.S. crude oil ETPs in focus as investors anticipated disruption to oil production facilities from Hurricane Sandy.
Investors shovelled almost $500 million into energy ETPs in October, according to global data from BlackRock, taking total net inflows to $1.5 billion in the year to date. ETPs, an easy route into commodities for investors, include exchange-traded funds, exchange-traded commodities and exchange-traded notes. All trade on a stock exchange and their value is linked to the underlying assets………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Previously, investors who were interested in commodities had to set up a commodity brokerage account, invest in equity producers, or start prospecting, but now, the average retail investor can look for commodity exchange traded fund options.
According to Liam Pleven for the Wall Street Journal, when investing in commodity ETFs, potential investors should keep in mind four key factors: Commodity funds that hold futures or physical materials are a better vehicle for tracking the commodities market than company stocks………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

With the uncertainty of U.S. presidential elections out of the way, investors are beginning to once again see the euro as the laggard of the currency world, even as the U.S. girds itself for what promises to be a drawn-out battle over raising its debt ceiling.
Market players see Mr. Obama’s election to a second term as a signal that there will be no changes to the Federal Reserve’s program of jolting the U.S. economy through $40 billion in monthly cash injections, a program that–at least in theory–should keep rates low and the dollar weak. ……………………………………….Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Take a sputtering U.S. economic recovery. Add in one of the closest presidential elections in history. Top it with a natural disaster that exposes the woefully inadequate state of infrastructure in some of the country’s richest parts.
The question is natural: Where is the U.S. heading? Back to its heyday of financial and political prominence as Barack Obama and Mitt Romney promise? Or toward a slow but inexorable decline, as some economic figures and the effects of superstorm Sandy might suggest?……………………………………….Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Australia & New Zealand Bank urged caution – for now - among investors expecting gains in agricultural commodity prices, flagging factors such as a weak Brazilian currency, and slow economic growth in capping values.
The bank said that it expected prices of commodities overall “to improve in the coming months”, helped by signs of improving economies in the US and China, a huge buyer of raw materials, which “appears to be turning the corner”………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Australia’s Securities and Investments Commission granted the first 11 licenses to trade emission permits in Australia, a sign that a carbon market is taking shape despite a political threat to end the program.
“A market is beginning to develop, premised on the steady flow of issuance of carbon units,” Craig McBurnie, a senior specialist for the commission, said today at the Carbon Expo in Melbourne………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Barack Obama may consider introducing a tax on carbon emissions to help cut the U.S. budget deficit after winning a second term as president, according to HSBC Holdings Plc.
A tax starting at $20 a metric ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates. “Applied to the Congressional Budget Office’s 2012 baseline, this would halve the fiscal deficit by 2022,” Robins said………………………………………..Full Article: Source

Posted on 08 November 2012 by VRS |  Email |Print

Japan is sidestepping multilateral efforts to limit greenhouse-gas emissions, working with Indonesia and other Asian countries on a bilateral basis to tackle climate change.
International climate-change negotiators will meet in Doha, Qatar, later this month to try to firm up an outline pact reached in South Africa a year ago, under which all countries would cut emissions starting in 2020. Elections in the U.S. and leadership changes in China have been among factors overshadowing efforts to reach compromises………………………………………..Full Article: Source

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