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Commodities Briefing 12.Nov 2012

Posted on 12 November 2012 by VRS |  Email |Print

Even when commodities win, investors can still lose. Despite fundamental market pressures and a volatile year, prices for front-month natural gas futures have gained a healthy 24% so far in 2012. But if you bought units in the United States Natural Gas Fund at the start of the year, you would instead have lost one-fifth of your investment.
The disconnect gets worse the further back you look. On a five-year view, gas futures are down by just over half, but the fund’s units have lost almost 94% of their value………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Speculators cut bullish commodity wagers by the most in five months as prices had their biggest gain in eight weeks on mounting speculation that stimulus measures will bolster economic growth.
Hedge funds and other large speculators lowered combined net-long positions across 18 U.S. futures and options by 11 percent to 931,048 contracts in the week ended Nov. 6, the biggest cut since June 5, Commodity Futures Trading Commission data show. Holdings have dropped for five weeks, the longest slump since April. Gold wagers fell to the lowest since August before prices gained the most since January………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Commodities mostly fell in volatile trade this week as investors eyed demand fears, presidential elections in the United States and a looming leadership change in China.
Investors’ focus was firmly fixed on US President Barack Obama’s victory over Republican challenger Mitt Romney in the United States, which is a major consumer of most raw materials. Markets were hit as traders fretted over a looming “fiscal cliff” following Obama’s re-election on Tuesday………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Banks are struggling to devise new commodity index products as once-fat returns fizzle out in a business worth $140 billion, putting pressure on bank commodity businesses already hit by tighter regulations.
Up until this year, the banks had managed to come up with fresh ways of perking up returns for the index products and retain uneasy investors, who still see commodities as a bet against inflation. As a flood of money into the sector has diluted returns, however, now even many of the complex products spiced up with computer algorithms are underperforming, and some investors are questioning their commitments to the sector………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Hedge-fund managers are losing faith that persistently strong crude-oil prices will hold amid a fragile macroeconomic backdrop, both in the U.S. and globally, and an adequate oil supply.
Their shift in positions, seen in two recent surveys, could signify that oil prices, which have been declining since hitting a peak in mid-September, could drop further………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Demand for OPEC’s crude will decline until 2016 because of the weakening economic outlook and growing reliance on competing sources such as U.S. shale oil deposits and natural gas liquids.
Global need for fuel from the Organization of Petroleum Exporting Countries will shrink to 29.7 million barrels a day in 2016, 1.4 million less than this year, the group says in its annual World Oil Outlook………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

World oil demand growth could fall short of forecasts next year, exporter group OPEC said on Friday, citing Europe’s troubled economy and the risk of weakness in faster-growing regions such as China and India.
The Organization of the Petroleum Exporting Countries, in a monthly report, left its forecast for growth in world demand in 2013 almost unchanged, reducing it by 10,000 barrels per day (bpd) to 770,000 bpd. But it said a larger reduction may follow………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Iran will likely remain the most important geopolitical story in the oil markets in 2013, said Barclays Capital in a commodity snippet.
Barclays expects President Obama to redouble efforts to secure a diplomatic settlement with Iran over its nuclear program. During his first term, Obama displayed little appetite for a military strike and continually stressed the need to continue with diplomatic course while at the same time ratcheting up the economic pressure on Tehran………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

The global oil market is in a good shape and Saudi Arabia is happy with the current oil price, Saudi Oil Minister Ali al-Naimi said, expressing satisfaction over a Gulf Arab effort which kept prices in check. Sanctions imposed by the United States and Europe against Iran over its disputed nuclear programme had threatened to backfire by pushing up oil prices, hampering the global economy.
But OPEC heavyweight Saudi Arabia and its Gulf Arab allies have kept output high all year to keep prices under control and the extra oil has helped reverse a spike in prices that took Brent crude to $128 a barrel in March……………………………………….Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Gold traders are the most bullish in 11 weeks and investors accumulated record bullion holdings on speculation US policy makers will add to stimulus following President Barack Obama’s re-election.
Twenty-five of 33 analysts surveyed by Bloomberg expect prices to rise next week and three were bearish. A further five were neutral, making the proportion of bulls the highest since August 24. Investors boosted assets in gold-backed exchange-traded products to an all-time high of 2,596.1 tonne on Saturday, valued at $144.7 billion……………………………………….Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Gold sales rose by up to 30 percent on Sunday as demand for wedding jewellery attracted more buyers on the auspicious Dhanteras despite high prices.
Currently, gold prices are ruling around Rs 32,000 per ten gram in the national capital and Rs 32,100 in Mumbai. “Although we were not expecting, sales have been very good. We expect better sales compared to last Dhanteras,” P C Jeweller, Managing Director Balram Garg said………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Diamonds are forever and now they are for everyone. From nose studs for Rs 1,000 to rose-tinted rocks that cost a bungalow and a lawn, diamonds today sell at all price points and Indians are lapping up these precious stones like never before.
Thanks to brands like Gili, Tanishq and Gitanjali, which today sell diamonds of various sizes and at a wide range of price points, and spiralling gold prices, diamond is the new silver. India is today the world’s second largest consumer of diamonds, a position we share with China, boosted by a 25-30% growth in domestic demand………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

The Agricultural Bank of China plans to launch trading of precious metals overseas in the next year or two, even though Chinese investors’ enthusiasm for the metals has cooled this year, a senior executive said.
The AgBank is one of the nine Chinese banks that have been granted a licence to import gold. “We will start trading globally in the next year or two, most likely in London and New York,” Wang Xinyou, head of the precious metals business at the bank, said………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Capital inputs account for about half the total costs in mining production – the average for the economy as a whole is 21%. Obviously many of the costs, once incurred, cannot be recovered by sale or transfer of the fixed assets.
Mining is an extremely capital intensive business for two reasons. Firstly mining has a large, up front layout of construction capital called capex – the costs associated with the development and construction of open-pit and underground mines………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Once darlings of the Australian mining boom, small and middle-tier prospectors are now running low on cash as commodities markets lose their lustre, pushing miners to look near and far for funds to keep afloat.
Seven out of 10 miners in Australia will need some form of funding within the next year, according to a survey by consultant Grant Thornton of firms with a market value of less than A$500 million ($520.48 million). Some companies, already mired in debt, are venturing overseas for financing. Others are trying their luck in the capital markets, which have become more difficult this year………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

As markets prepare for another four years of Barack Obama, it is safe to say that trading has been anything but smooth. With most benchmarks suffering a poor string of sessions last week, many are looking to the near-term or have focused on exactly what happened last week. But with commodity investing, it is always important to take a look at longer-developing trends, as they can often signal how a particular asset will perform in the near future.
Soft commodities have suffered a rough month, as their trailing four-week returns are among the worst in this asset class. While many have been focused on surging precious metals or lumber’s massive spike, many have overlooked the poor performance from this specific group of commodities………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

October net new asset flows into exchange-traded funds (ETFs) and exchange-traded products (ETPs) globally were $13.5 billion, down from the previous month’s total of $40 billion in September, according to ETFGI, an ETF consultancy.
Investors and investments suffered from growing uncertainty in October over the likely outcome of the US presidential election, the impact of the fiscal cliff in the US, the likely impact of superstorm Sandy and the ongoing debt concerns in the Eurozone………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

ETFGI’s recent analysis found that $13.5 billion of net new assets (NNA) flowed into global Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) in October which is lower than the $40 billion of net inflows in September 2012.
Investors and investments suffered from growing uncertainty in October over the likely outcome of the US presidential election, the impact of the fiscal cliff in the US, the likely impact of superstorm Sandy and the on-going debt concerns in the Eurozone………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

Mexico’s peso has turned from the world’s strongest major currency into the weakest of the past month amid growing investor concerns that the economy will slow as demand diminishes from its biggest trading partner, the U.S.
After strengthening 12 percent against the dollar since the end of May, the peso has weakened more than 2 percent, the biggest decline among 16 most traded currencies, according to data compiled by Bloomberg. X-Trade Brokers Dom Maklerski SA, the second most-accurate forecaster, says it will depreciate another 3.7 percent by September and Bank of Nova Scotia, the third-best, recommends selling the peso………………………………………..Full Article: Source

Posted on 12 November 2012 by VRS |  Email |Print

An index of currency-focused hedge-fund performance declined in October, as investors struggled to keep up with shifting market sentiment in the face of rising political uncertainty.
Parker Global, an investment firm that tracks the performance of funds in which it invests, said its currency-managers index fell 0.73% in October from the previous month. The CMI is nearly flat so far this year, gaining just 0.14% since Jan. 1. Compared with last October, the index is up 4.3%, according to an emailed statement from Parker Global………………………………………..Full Article: Source

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