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Commodities Briefing 23.Nov 2012

Posted on 23 November 2012 by VRS |  Email |Print

After two months of strong gains, Scotiabank’s Commodity Price Index edged down in October by 0.2% month over month. Risk aversion returned mid-month, alongside another bout of concern over the outlook for global growth. The All Items Index currently stands 14.1% below the near-term peak in April 2011 - just prior to the advent of financial market concern over excessive Eurozone sovereign debt - and has fallen by 5.2% this year.
“Oil and gas prices rose across the board in October, with firmer natural gas and propane prices in Edmonton and Sarnia, as well as slight gains in light and heavy crude oil in Alberta,” said Patricia Mohr, Vice President, Economics and Commodity Market Specialist at Scotiabank………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

Several new commodities are starting to join the positive momentum which has been building over the last week. Yesterday it was sugar which saw momentum catch up with last Monday’s price spike and copper could be turning positive today.
The grains sector, which up until now has seen the strongest 2012 performance (see below), continues to suffer from elevated long liquidation. Soybeans, for example, have corrected almost 23 percent from the August peak and there are now signs of some bottom fishing emerging………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

After Libya last year, 2012 has again been notable for geopolitical disruptions to oil supply. These have affected Iran, Sudan, Syria, and Yemen and have led to an estimated 1.2 million barrels per day (mbpd) loss in output during the year.
Much of this has been offset by the steady return of Libyan supply which has added around 1 mbpd. Gains in non-OPEC crude and global NGLs have also been strong this year. But it is the action of Saudi Arabia which has been the main factor dampening price pressures stemming from the supply disruptions, and making sure markets are comfortably supplied, according to a report by Samba Financial Group………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

Asia should benefit from the convergence of global liquefied natural gas markets amid signs of change for its pricing structure linked to oil, the head of the West’s energy watchdog told Reuters on Thursday.
Gas has historically been pegged to the oil market through long-term contracts, because both fuels used to be produced by the same exporters and were often used in the same industries………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

The latest data from the IMF shows that Central Banks are continuing to accumulate gold with some 40 tonnes purchased in October keeping purchases on track to match last year’s 456 tonnes of net purchases. Key buyers were Brazil, which took on 17.2 tonnes, pushing its gold reserves to their highest in 11 years, Kazakhstan with 7.5 tonnes and Turkey with 17.5 tonnes (although this is slightly anomalous in that Turkey is now accepting gold in its reserve requirements from commercial banks – a change in status implemented earlier this year).
Russia too continued to gradually grow its reserves (by 0.4 tonnes in October)………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

Is gold an ideal investment that makes sense? Indians have been buying gold for ages. The golden wealth that Indian households currently own is a mind-blowing quantity of roughly 15000 tons. In the last few years, the price of gold has shot up, giving the bullion metal the great label of one of the best investment vehicles.
You have now an array of investing products strung around gold. Listed and un-listed companies sell loans to people in exchange for pledging their gold jewellery items. Such loans are sanctioned in ‘three-minutes’ as an advertisement from a major listed company blares out………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

After falling 0.94% last week, Comex gold futures rebounded 0.52% this week and ended at $1,723.60 on Tuesday. The S&P 500 index and the Euro Stoxx 50 index surged 2.05% and 3.39% this week. Crude oil futures have been especially volatile, surging 3.01% on Monday but falling 2.83% on Tuesday due to rapid development in the Middle East.
Gold surged on Monday as the market anticipated a solution to the US fiscal cliff while Israel-Hamas fighting intensified. Gold’s price retreated on Tuesday as soon as there were some signs of a cease-fire. The situation there remains fluid and uncertain, underpinning the gold price………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

Silver is outperforming gold as metals rise, said Barclays Capital in a daily commodity research note. According to the British bank, a break above $33 an ounce in silver signals further upside toward our targets near $33.90/$34.40.
“We are looking for a similar move above $1,739 in gold to confirm upside toward $1,755 and then $1,775, which shields our greater target near $1,800,” Barclays concluded………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

China has earmarked a special fund from China’s Central Government Budget to streamline and improve the domestic rare earths industry.
The fund will be used to help rare earth companies upgrade their technology in order to operate in a more responsible manner environmentally. It will also be used to help provinces, autonomous regions, and local governments regulate and promote “the healthy and orderly development” of the rare earth sector………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

As is perhaps always the case, commodity markets have had quite an action-packed year thus far. Landmark events, such as President Obama’s re-election and this summer’s massive drought brought on by record-breaking temperatures have propelled many commodities into some volatile swings, rewarding those lucky investors while burning many others.
But on this Thanksgiving Day, it is perhaps more appropriate for us to reflect on those commodities we’re particularly grateful for. Below, we highlight three commodity ETFs that have delivered stellar performances thus far in 2012 (YTD returns as of November 20, 2012)……………………………………….Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

Major commodities player Barclays quit open outcry floor trading at the London Metal Exchange (LME) on Thursday, downgrading its membership at the world’s biggest marketplace for industrial metals to cut costs.
The commodities operations of banks like Barclays face tough times and total commodities trading turnover for the 10 biggest investment banks has tumbled 20 percent in the first nine months of this year………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

The Dalian Commodity Exchange on Thursday signed a cooperation memorandum with the Korean Exchange in a bid to boost its global presence. The DCE is China’s largest futures market for agricultural goods.
The two exchanges will establish a long-term communication mechanism and cooperate in information sharing, technology as well as research and development, the DCE said. The Korean Exchange is added to a list of 19 other overseas futures exchanges that have signed cooperation memorandums with the DCE, one of China’s four futures exchanges………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

The European Commission has given its backing to commodities giant Glencore’s $31bn (£19.5bn) bid to take over mining firm Xstrata. But as a condition, Glencore must scrap an exclusive deal with Nyrstar, the world’s largest zinc metal producer, and sell its 7.8% stake in the firm.
Both Xstrata and Glencore shareholders have already voted overwhelmingly to merge the two companies. The deal still requires regulatory approval in China and South Africa………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

South Korea’s won weakened for a third day as concerns that the government will act to stem currency gains offset optimism the Chinese economy is set for recovery. Government bonds were steady.
South Korea’s Deputy Finance Minister Choi Jong Ku said yesterday there is “herd behavior” in currency market and that the government will take action to curb excessive fluctuations. The won is the best-performer among 11 most-traded Asian currencies since end of June. A preliminary reading released yesterday signaled China’s manufacturing may expand in November for the first time in 13 months………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

With the price of carbon credits continuing to slide in the global markets and the first commitment period for the Clean Development Mechanism (CDM, under which carbon trading is permitted) coming to an end this year, companies and investors holding carbon credits are worried at the prospect for investments in this regard.
“Investors are worried. No transaction is happening in the global carbon market. The prices have come to below a dollar and no one (holding a carbon credit) is willing to exit the market. The negative sentiments can affect new green project registrations as well. When the carbon prices are too low, then companies and investors would not like to venture there,” said a partner with a leading consultancy firm………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

Global warming is not only an environmental issue - it is complicated by political and economic elements. A cap-and-trade system that combines policy and market forces can be adopted as an innovative approach to cost effectively address the global warming challenge.
In the EU, Australia, New Zealand, California of the United States, and more recently South Korea, carbon is rising as a new “commodity”. China is about to take its first step to reduce emissions of greenhouse gases by embracing the market………………………………………..Full Article: Source

Posted on 23 November 2012 by VRS |  Email |Print

Kazakhstan is all set to take a big step towards climate mitigation with a new carbon emissions trading scheme to be implemented across the country starting January 1, 2013. The cap and trade system will be applied to all businesses that generate more than 20,000 tons of carbon emissions annually. It is in line with the country’s emissions reduction efforts which target reductions of 15 percent by 2020 and 25 percent by 2050 compared to 1990 levels.
There are only 178 businesses that will be subjected under the emissions trading scheme, but they account for 80 percent of the overall emissions in Kazakhstan………………………………………..Full Article: Source

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