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Commodities Briefing 11.Jan 2013

Posted on 11 January 2013 by VRS |  Email |Print

Commodities rose to their highest in more than 11 weeks, led by energy and metals, amid optimism that an economic recovery in China will boost demand. Gold advanced to a one-week high.
The Standard & Poor’s GSCI Index of 24 raw materials gained to the highest level since Oct. 22, as aluminum advanced as much as 2 percent and crude climbed to the highest level in more than three months. China’s exports jumped 14.1 percent last month, compared with a 5 percent median forecast in a Bloomberg News survey. The nation is the world’s biggest user of industrial metals and energy………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Ambiguous global growth outlooks and mismanagement concerns have caused turmoil among commodity companies but JP Morgan’s Neil Gregson believes the sector is heading for a recovery.
The natural resources manager, who oversees more than €2 billion in assets and runs the JPM Global Natural Resources fund, says the industry has struggled over the past two years as some resources companies have poorly executed many project bids………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

As much as things change, they stay the same. The agricultural industry has been dealing with price volatility for centuries, but even with modern financial market tools in play, wide fluctuations can still take place at a moment’s notice. Markets suddenly gyrate to find a new equilibrium after either an external shock or a new supply-and-demand dynamic has rippled through the industry.
Why does this extreme pricing behavior occur in the first place? Chris Harris, editor-in-chief for The Cattle Site, writes that there are three major reasons:……………………………………….Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Trying to make sense of the commodities market is getting harder by the day. For example, we had barely begun to taste the euphoria of the (some would say miraculous) recent recovery in the iron ore price before, overnight, Bloomberg reports a good news/bad news outlook from Deutsche Bank.
The bottom line in the bank’s thinking is that we may for a short while do better than the recent 14-month high and prices reach $US170 a tonne - but then they’ll retrace back down to $US120/tonne as supply expands. Sure, that’s better than the $US86/tonne we saw late last year but, as the report points out, going from $US170 to $US120 is a 29 per cent fall - and should that eventuate, the iron ore sector is bound to get another case of the jitters………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

A UAE representative to the OPEC oil cartel said a modest outlook for 2013 doesn’t mean oil suppliers will cut back on investments. Ali Yabhouni, governor to the Organization of Petroleum Exporting Countries from the United Arab Emirates, told an energy forum in Abu Dhabi that he expected global demand to rise this year by 800,000 barrels per day.
That comes amid expectations that production from non-OPEC members could increase by 900,000 bpd, the Platts news service reports. “It will leave little room for OPEC producers to increase their production,” he said………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Investing for me is about identifying long-term trends, and then investing in companies whose business I understand, that will benefit from those trends. For more than a decade, my own investment strategy has focused on two major trends: (1) I believe that as the massive demographic of Baby Boomers moves into post-retirement, a tremendous amount of money will flow into the healthcare sector, and (2) oil is generally undervalued.
Because I’m an engineer who has spent my career in the energy sector, it’s probably best if I keep my opinions about specific investments in the healthcare sector to myself. But let’s talk about the oil industry………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Energy policies can strengthen economies of the Middle East and North Africa and help the regions make the best use of fossil fuels and renewable resources.
That’s the view of the International Energy Agency (IEA), which is offering its “experience and knowledge” to help the regions tap energy efficiency and renewable energy for economic and political change………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Gold is likely to rule higher on Friday in the domestic market following European Central Bank Chief’s statement that weakness in the euro zone will continue. Though the euro gained against the dollar, the greenback was up at 2-and-a-half-year high against the Japanese yen, triggering prospects of further rise in the yellow metal.
Japanese Prime Minister Shinzo Abe’s new economic package was also drawing Japanese funds to the precious metals………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Gold is likely to range-bound in the domestic market on Tuesday as it could be caught between price rebounding in the global market and a drop in the dollar. In early Asian trade, gold increased to $1,653.05 an ounce after having dropped below $1,650 in overnight trade. Gold for delivery in February, however, was quoted at $1,648.80.
The yellow metal gained in Asia on signs of buying by China that is fast turning out to be the biggest buyer in the global market………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Gold prices could fall back to the 2012 lows of around the mid$1,500s an ounce, basis the February Comex gold contract, but then rebound to test the fourth quarter highs and then $1,800 in 2013, says Ira Epstein of the Ira Epstein division of the Linn Group.
The question is whether or not gold can take out the monthly highs in 2013, he says. “Ultimately, we think that $1,800 comes out, propelling this market into the $2,300-2,500 area, but it may take until next year to get the markets going to that degree. In any event, accumulating on weakness still appears to be a solid long term technical approach,” he says………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Barclays Capital looks for gold to rise in 2013 although at an average price of $1,778 an ounce that is less than what the bank was calling for prior to Christmas. Back in mid-December, Barclays was forecasting an average of $1,815 for this year.
“Lack of conviction has tainted gold price action, and gold has struggled to establish its identity as a safe haven asset, instead rallying amid a risk-on environment,” the bank said in a fresh research report Thursday………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Gold prices should average $1,750 an ounce in 2013, as the market enters a “consolidation” phase, said Swiss-based trade house MKS Capital in a research note released Thursday.
The firm said the single-digit growth gold saw in 2012 is likely to be repeated this year as “upside momentum” is slowing down. The bull trend remains intact, they said. “The significant accumulation of physical gold over the last three years due to portfolio diversification/protection aiming to reduce credit risk is likely to slightly slow down in the coming few months as the global economic crisis seems to be more or less contained.,” they said………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

The spike in the price of gold between 2008 and 2011 seems to have taken a turn in the past year and a half and slowed down. In 2012 the price of gold rose by only 3.7%. Many investors still have gold or gold equivalent investments including gold royalties companies such as Royal Gold, gold producers such as Barrick Gold Corporation, or gold ETF such as SPDR Gold Shares.
These investments are deemed by many as safe haven investments to protect against the devaluation of the USD or an alternative to other safe haven investments such as long term treasury securities. Will gold resume its rally in the near future? Let’s examine this issue in greater detail………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

The case of copper in 2012 highlights the need for companies to become more strategic not only in how they think about sourcing commodities with suppliers (demand aggregation programs with vendors, mill-direct, distributions, etc.), but also how they consider taking risk off the table through physical and financial contracts.
After all, even if the price ends the year exactly where it started (and customers believe that the price has not moved throughout the year), it does not mean that you haven’t exposed your business to volatility throughout a 12-month period………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

As the most abundant metal in the earth, aluminum actually makes up about 8% of the weight of the planet’s solid surface. The metal is known for its low density, ability to resist corrosion, and wide range of uses. It can be found in everything from soda cans to airplanes with an increasing number of industrial usages in between.
The metal was a hot commodity during the housing-led economic boom, but its price collapsed during the financial crisis, followed by the stock of those companies engaged in its production………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Do you want to make money from the commodity market? Investment in commodity can bring you fruitful returns. Commodity covers physical product (food, metals, and energy) which are bought and sold in standardized contracts in the commodity exchanges. The trading of commodities consists of both direct physical trading and derivatives trading.
Many retails investors have earned a fortune from the commodity market by the end of 2012 and shall continue doing it even in 2013. For those who want to diversify their portfolios beyond shares, bonds and real estate, commodities are the best option. Before you decide to take a leap into the commodity market, understand the risks and advantages of trading in commodities………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

Commodities rallied their most on Thursday since the start of the year as signs that European interest rates might hold pushed the dollar sharply lower against the euro, boosting raw materials priced in the U.S.currency.
Supply and demand factors also influenced a run-up in crude oil and natural gas prices. London’s Brent crude neared three-month high and U.S. crude hit a four-month peak before paring gains at the close on news that No. 1 oil producer Saudi Arabia had cut output. Supportive economic data from China further fanned expectations for oil demand………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

In the past few years, central banks around the world have pumped trillions of dollars into the financial system, partly motivated by the desire to keep their currencies weak in relation to others.
Yet a weaker currency is not the booster conventional economic wisdom suggests, according to Steven Englander, head of currency strategy at Citi. The traditional view that a weaker currency boosts exports and therefore stimulates the economy is over-simplified, he argued………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

As with other commodities like corn, soybeans and other classes of wheat, the spring wheat market has found prices sliding down at the end of the year heading into 2013.
“The uncertainties surrounding the fiscal cliff, investment fund rebalancing and basically non-fundamental, non-market influences have put the market into a tailspin,” said Jim Peterson, marketing director for the North Dakota Wheat Commission………………………………………..Full Article: Source

Posted on 11 January 2013 by VRS |  Email |Print

China’s carbon intensity, or its emissions relative to economic output, fell more than 3.5 percent in 2012, outperforming its average annual target, China’s chief climate change official said on Thursday.
China aims to cut carbon intensity by 17 percent during the 2011-2015 period, which means an annual average target of around 3.5 percent. Intensity is the amount of carbon dioxide emitted per unit of gross domestic product………………………………………..Full Article: Source

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