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Commodities Briefing 20.Nov 2012

Posted on 20 November 2012 by VRS |  Email |Print

Citi Research analysts have predicted that emerging global economic patterns will require commodity investors to evaluate each sector individually as they hunt for ways to make profits. Although demand is expected to increase as global growth improves, commodity prices are not likely to move sharply higher.
“As demand rebounds, commodity performance is likely to become more differentiated, with winners and losers depending on the supply/demand balances for individual commodities,” Citi Research analysts wrote………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Oil rallied nearly 3 percent on Monday to the highest level since mid-October on worries about escalating violence in the Middle East and on signs of progress in talks to avert a looming U.S. budget crisis.
Gold climbed 1 percent, clawing back all of last week’s decline, and copper rose to a two-week high in a broader commodities market rally that also bolstered grains and softs. The Thomson Reuters-Jefferies CRB index, a global commodities benchmark, notched its steepest gain in two weeks and jumped to a 3-1/2 week peak as the dollar slipped 0.5 percent. ……………………………………….Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

According to CIMB Bank, recent indicators suggest commodity market conditions are stabilising, though there is still little chance of any quick recovery given high inventories and a slower global growth outlook.
As well, CIMB sees little chance of a repeat of the massive stimulus packages of three years ago. This means there is little scope for price in the absence of any extraneous factors impacting on the market………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

World oil markets are well supplied despite the loss of nearly 1 million barrels a day of crude from Iran following sanctions by the United States and European Union, the head of the International Energy Agency (IEA) told Reuters on Monday.
Brent crude has stayed above $100 a barrel for most of this year due to concerns over supply disruptions after the United States and Europe slapped sanctions on Iran in a bid to force Tehran to abandon its controversial nuclear programme………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

The West’s energy watchdog urged Australia on Monday to build up its emergency oil supplies and stop relying on industry stockpiles, which are too low to meet international commitments due to higher oil imports.
The recommendation, from the International Energy Agency’s review of Australia’s energy policies released on Monday, would allow the country to join the body’s international efforts to coordinate the release of emergency stocks when needed………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Oil continues to fall. Analysts and industry experts have their opinions about why. History, however, tells us that sometimes nobody really knows. Everyone is making his or her best educated guess but, in the end, it is all theory and difficult to quantify.
On Sept. 14, crude oil closed at a high of $98.94, leading market analysts to believe that it was poised to reach the $100 mark. At the time, economists, as well as Washington politicians in the midst of an election year, worried that higher prices would put a damper on economic growth as prices at the pump would continue to rise………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

When the International Energy Agency’s big annual report came out last week there was a big top line story picked up nearly everywhere: that US oil production will overtake Saudi Arabia by about 2020.
This is due to projected rises in oil being wrung from the sort of shale formations that have been the source of vast new supplies of natural gas in the past few years………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

A paper published recently by the IMF gives us some insight into how oil prices and availability might affect the global economy in the next decade. The paper, entitled Oil and the World Economy: Some Possible Futures, starts with the statistic that global oil production grew by 1.8 percent annually from 1981 to 2005, then stagnated with production remaining essentially flat thereafter.
In the last seven years what is called global “growth” in “oil” production has come largely from substitutes for crude such as natural gas liquids, tar sands, and biofuels……………………………………….Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Among casual observers, there seems to be a rough perception that the U.S. exhausted the bulk of its mineral deposits during its rapid phase of industrial growth and is now buying what it needs from countries like China out of sheer necessity.
However, this is far from the reality of the situation. Chinese producers flooded the market with minerals such as rare earths, tungsten and manganese, pricing out domestic suppliers and causing many of them to shut down. Since 2009, China has phased down production creating opportunities for domestic suppliers to get back in the game……………………………………….Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Financial advisers are going for the gold, positioning client portfolios to capitalize on what could be record highs for the precious metal in 2013. But which gold-related investments advisers choose can make a big difference in how much of that upside clients capture.
Gold, often viewed as a safe haven or protection against inflation, has been very popular over the past decade. It’s easy to see why: the spot price of gold bullion per troy ounce has risen an average of 18.4% annually over 10 years………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Gold’s 12-year rally, the longest in at least nine decades, is poised to continue in 2013 as central bank stimulus spurs investors from John Paulson to George Soros to accumulate the highest combined bullion holdings ever.
The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 12 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.62 billion bet through the SPDR Gold Trust (GLD), the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Investors who dreamed of a record year for gold prices have had little to cheer about thus far in 2012. After touching an all-time high of more than $1,920 US an ounce in September 2011, bullion has struggled to regain that lofty level since. Even after Monday’s surge of nearly $20 an ounce, gold is still about $190 or nearly 10 per cent below last year’s record peak.
Meanwhile, many leading gold stocks have taken a beating as rising costs, construction delays and operating snafus have hammered producers’ profit margins………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Even though dollar gold prices are relatively strong, ScotiaMocatta, the gold bullion banking division of Scotiabank, observes that gold in a host of currencies has reached record highs this year.
“What is interesting is that this represents a mixture of developed and emerging economies, which highlights the broad-based appeal of gold as an alternative currency.’……………………………………….Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Gold is heading to $3,500 and possibly as high as $12,400 an ounce predicts ‘Mr. Gold’ Jim Sinclair the legendary gold trader who advised the Hunt Brothers in the late 1970s and probably made more money than anybody else of of the 1970’s gold boom.
In his latest missive to his many fans among the gold bugs he also tells investors not to worry about the day-to-day gyrations of the gold price. Mr. Sinclair says that they should instead be focused on what he sees as inevitable and coming next: “currency induced cost push inflation.”……………………………………….Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Paris based bank BNP Paribas has cut its next year price forecasts for gold and silver. French Bank has trimmed its 2013 gold price outlook to $1,865 an ounce, compared to its $1,900 forecast in September but still looks for the metal to rise. The timing of the gold price peak will be closely linked to the rate of improvement in the G3 economies.
The bank trimmed its next year silver forecast to $39.05 an ounce from $41.70/oz. “Silver should outperform gold at times of high risk appetite,” BNP Paribas concluded………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Palladium is expected to outperform the rest of the precious metals complex over the next two years, said Paris based bank BNP Paribas in a commodity research note.
According to the French bank, palladium to average $780 an ounce next year, although this is down from a September call of $900/oz. Palladium to be the strongest precious metal next year and also looks for platinum to rise from current levels but continue trading at a discount to gold. Palladium has been hurt by concerns over global economic growth………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Holdings in gold exchange-traded-funds might not be rising as much as recent months, but nevertheless the buying continues and has driven global holdings to a fresh record high, said the Zurich based bank UBS in a commodity snippet.
According to the Swiss bank, holdings rose another 99,000 ounces Friday following 136,000 on Thursday. “So far this month, ETFs have grown by just 491,000 ounces, falling well short of the 1.5 million ounces recorded for all of October, which in turn was the lowest monthly inflow since July,” said Edel Tully, precious-metals strategist at UBS………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Gold Bullion traded close to $1725 per ounce this morning in London, holding gains made during the earlier Asian session, as stocks and commodities also recovered some ground lost last week, after news that a deal may be achieved in time to avoid so-called fiscal cliff of US tax rises and spending cuts currently scheduled for the start of 2013.
Silver Bullion rallied back above $32.70 an ounce, recovering Friday’s losses, while US Treasury bond prices fell along with the Dollar………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

The SPDR Gold Trust is by far the largest and most popular commodity ETF in the world. The physically-backed gold fund has more than $74 billion in total assets and sees more than eight million shares trade on a daily basis. Not only is it the most popular commodity ETF, but it is also the second largest ETF in the world, and even briefly held the first place slot in 2011.
But for all of the recognition and press this fund gets, few actually know how the fund holds its physical gold, which may be some of the reasons that controversy has emerged surrounding this product………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Far too frequently, commentators focus on one of two potential outcomes. For example, one writer may explain why riskier assets will navigate the fiscal cliff and rocket substantially higher into the new year. Meanwhile, another may predict the collapse of market-based investing altogether, with the Dow plummeting 3,000 points before Christmas.
Greed and fear. Bull and bear. Democrat and Republican. Is there really nothing in the middle? In truth, there are plenty of times when participants simply cannot make up their minds. The light may be yellow, rather than red or green………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Shareholders in commodities giant Glencore and mining group Xstrata are to vote Tuesday on a proposed $33 billion mega merger at two extraordinary general meetings near Zurich.
Glencore shareholders are first up on Tuesday at 0800 GMT at the company’s headquarters in Zug, while Xstrata’s vote is planned for 1315 GMT in the same Swiss canton. Both Swiss-based companies had been set to approve the blockbuster merger in September but the deal ran into major resistance from key Xstrata shareholders demanding better conditions………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

Welcome to the big leagues. The International Monetary Fund is adding the Canadian dollar to the elite band of currencies it formally tracks as reserve assets, a nod to the loonie’s established appeal among central banks seeking to diversify their reserves.
Inclusion in the IMF’s Composition of Foreign Exchange Reserves, or COFER, largely amounts to a technical change for the loonie and the Australian dollar, which is also being added………………………………………..Full Article: Source

Posted on 20 November 2012 by VRS |  Email |Print

European policy makers are working hard to preserve the Continent’s monetary union in its present form. But if these efforts come to nothing, a euro breakup is hardly the most likely outcome. A mutation of the existing monetary arrangement, involving the emergence of parallel currencies to the euro, seems to me likelier than its wholesale disappearance.
When the euro was created, most economists believed the euro zone did not satisfy the conditions for a viable currency area, to say nothing of an “optimum” one. Yet the European monetary union worked quite well for almost a decade………………………………………..Full Article: Source

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