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Commodities Briefing 07.Dec 2012

Posted on 07 December 2012 by VRS |  Email |Print

Global food prices dropped 1.5 percent in November, the United Nations Food and Agricultural Organisation (FAO) said on Thursday. The FAO’s Food Price Index, a monthly measure of changes in a basket of food commodities, moved down three points to 211 points in November, the lowest since June 2012.
“Except for dairy, international prices of all the commodity groups included in the index fell in November, with sugar undergoing the sharpest dip, followed by oils and cereals,” the FAO said in a statement………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

An ‘Outlook 2013′ by ETF Securities (USA) states that the global economy is recovering from slow down and will return to its track by proving its potential to grow in 2013.
Increasing signs of improving global growth and continued strong central bank commitment to highly accommodative monetary policy indicates that the first part of next year has the potential to be a good one for cyclical and risky assets………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Commodity markets have entered a “renaissance” phase where prices are unlikely to go much higher but still offer investment opportunities, analysts at Goldman Sachs say. In a separate Wednesday report, the Goldman analysts said rising natural-gas and oil production in the U.S. will likely pare down risks the global economy would be “choked” by the rising prices of both raw materials.
In a report focused on commodities in the next year, the investment bank kept its recommendation for investors to be overweight in commodities, and forecast near-term returns of 11% and of 7% at the end of 2013 for the asset class………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Has the so-called commodities super cycle, which has benefited economically backward but resource-rich countries for the better part of two decades and contributed to an astonishing increase in global trade, run its course?
Economists are arguing that, with the prices of such elemental goods as coal, oil, copper and grains having fallen dramatically, the cycle is over. In the past two years, coal prices have fallen by 40.3 percent from their peak, oil is off by 19.1 percent despite Gulf tensions and copper has declined by18.5 percent. Grain price declines have been relatively moderate, with corn and soybean prices showing drops of around 10 percent………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Three mega-trends will form the basis of the longer-term economic picture that we will come to in a moment according to the brothers. The first mega-trend, demographics, points to one billion new people on the planet with the US gaining here as compared to other industrialized nations as well as most of Asia.
The significance, according to Brian Beaulieu, involves the number of working people supporting a growing older population. In this sense, growing populations “help” the economy………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

OPEC’s likely decision to leave quotas unchanged next week belies the growing prospect of having to make the deepest oil-production cuts since 2009 as a global supply surge threatens to weaken prices.
The Organization of Petroleum Exporting Countries may need to lower output by 1 million barrels a day, or 3%, in the first half of next year, according to Societe Generale SA. Brent crude may drop 20% by June if the group doesn’t reduce the amount it pumps, the Centre for Global Energy Studies said………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Iranian oil tankers are contending with longer delays in shipments and some are idled amid increasing pressure on buyers to curb purchases from what was once OPEC’s second-biggest producer.
NITC, the Tehran-based tanker owner, has 42 crude oil carriers and 13 were delayed in transit since Oct. 21, according to data compiled by Richard Hurley, a senior maritime consultant at IHS Fairplay in London who has tracked vessel movements for two decades………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Gold took a double hit recently based partly on a news item from the rumor mill that a large fund in Asia was selling to “run the stops.” The sale looks like a carefully crafted trade prepped and successfully executed by a well known $14b U.S. fund, according to one source.
Prior to the sale there had been an unusually large purchase of gold ‘puts’ — a leveraged options play that profits from a downward spike in prices. There had also been some early selling on the overnight electronic platform presumably to test the waters before the big guns fired a devastating salvo………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

The gold bull market that started during the first quarter of 2001 has now been in play for approximately 11 1/2 years. Since then gold is up over 565%. With the Fed and Central Bankers around the world now gearing up for even more money printing that means that gold prices will continue to strengthen.
In fact, given the average commodity cycle tends to run in a 13 year bull market, gold appears to be in the last 1-2 years of this ongoing uptrend………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Goldman Sachs has cut next year gold price forecast to $1,810 per ounce from the $1,940 an ounce projected earlier in the year. Its 2014 forecast for gold prices is $1,750 per troy ounce.
“While we see potential for higher gold prices in early 2013, we see growing downside risks. As a result, we find that the risk-reward of holding a long gold position is diminishing,” said the American multinational investment bank in a snippet………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

China’s Ministry of Industry and Information Technology announced that it expected gold consumption in the country would be running at more than double national gold production by the end of 2015, more than double Chinese gold consumption forecast for 2012.
According to the MIIT statement, domestic demand is set to surpass 1000 tons by the end of 2015. It said this would ‘widen the fundamental market shortage’ and noted that the shortage of supply will persist in the coming few years as domestic gold supply ‘might only reach 450 tons by that time.’……………………………………….Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Looking at a 10-year gold prices or silver prices chart and seeing respective gains of 423% and 650% can get investors pretty excited, and for good reasons. Whether you enjoyed the previous commodities bull run and are currently adding to your positions, or just initiating one, now is the time to buy gold and silver, as both are expected to continue climbing in value.
The “commodities super cycle is far from over” is a sentiment Money Morning Global Resource Specialist Peter Krauth has repeatedly shared with readers, and it was reiterated today by Jeffrey Currie, head of Commodity Research at Goldman Sachs Group Inc………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Increasing signs of improving global growth and continued strong central bank commitment to highly accommodative monetary policy indicates that the first part of next year has the potential to be a good one for cyclical and risky assets.
In this environment, commodities could perform well as an asset class, with more growth-sensitive commodities such as base metals and the white precious metals having the potential to perform most strongly………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

After much deliberation, the Federal Reserve finally announced the third round of quantitative easing or QE3, in an attempt to facilitate consumption in the economy thereby creating more jobs. The methodology utilized purchase of $40 billion worth of mortgage backed securities per month while keeping the tenure open-ended as a way to hopefully jumpstart the economy.
During this time, there were many products from the ETF space which hogged the limelight with everybody talking about the bullish impact of QE3 on these ETFs . These products were mostly 1) Commodity ETFs (particularly precious metal ETFs), 2) Mortgage REIT ETFs, and 3) Long Term Treasury ETFs………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Some of the world’s top computer-driven hedge funds are buying exchange memberships to trade directly on the biggest commodities and financial futures markets, saving on the sizeable commissions normally paid to brokers.
Eager to improve returns and keep details of their ‘black box’ trading strategies as secret as possible, so-called CTA (commodity trading advisor) funds are buying exchange membership seats for hundreds of thousands of dollars………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Emerging market currencies were mixed on a day that saw these currencies break free of their previous trading patterns. In the backdrop of a weaker euro, and a weaker outlook for the euro zone after a European Central Bank meeting, emerging market currencies typically would have also sold off.
On Thursday, the underperformance was limited to emerging European currencies, while other regions fared modestly well………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

The Hong Kong Monetary Authority was forced to step into the currency markets again on Wednesday as the Hong Kong dollar hit the limit of its trading band against its US counterpart.
The city’s de facto central bank has now intervened to the tune of US$2.6bn in the past week to weaken its currency, as money from around the world continues to pour in to Asia………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

Russia, last year’s third-biggest wheat exporter, is bracing for its coldest winter in 20 years, threatening a crop planted into parched soil at a time when drought is already diminishing yields from Australia to the U.S.
The icy blasts predicted by the state weather forecaster through February are a greater threat this season because record heat in southern areas means some crops have yet to enter dormancy and don’t have a protective snow covering. Russia will already have the lowest stockpiles relative to demand in five years when it starts harvesting in July and a damaged crop would further curb supplies available for shipping………………………………………..Full Article: Source

Posted on 07 December 2012 by VRS |  Email |Print

China hopes to extend its pilot carbon emission trading system (ETS) to across the nation in its new five- year plan starting 2016, a member of the Chinese delegation to the ongoing UN climate talks said here Thursday.
China issued tentative ETS regulations in June and launched pilot programs in the cities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen, as well as the provinces of Guangdong and Hubei, said Wang Shu, an official from China’s National Development and Reform Commission (NDRC), at a side event of the Doha talks………………………………………..Full Article: Source

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