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Commodities Briefing 16.Jan 2013

Posted on 16 January 2013 by VRS |  Email |Print

Commodity prices could rise “markedly” this year on the back of a global economic recovery, said a German bank on Tuesday. Gold prices will rise in the medium-term, but now the metal is now being hampered by rising economic optimism and lower risk aversion. In the short term, prices could fall further. Inflation fears should pick up later this year as economies improve, supporting gold, said Commerzbank in a research note.
The expansive monetary policy of the central banks is also supporting demand for commodities, they noted. Central banks are likely to keep their interest rates low, which will support precious metals in particular………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Remember the whipsawing days of 2008? The days when commodity prices couldn’t get crazier? Well, Goldman Sachs put out a research note this week clocking that things have got awfully quiet of late. Almost strangely so.
Indeed, according to Jeffrey Currie and team, commodity volatility has dropped far below the volatility of other asset classes, even though the risks to both the downside (macro and policy risk) and upside (geopolotical risks) have not gone away………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Key trends and movements in the Euro Commodity Markets: Trayport’s latest blog - The review of 2012 looks at: the rise of exchange execution;the shift to clearing; the growth in European gas; the shift to brokers in European power; and volume drops in UK power.
1. UK Gas: The Rise of Exchange Execution - A Game of Two Halves. H1 2012 saw a fairly stable market composition for UK Gas – a continuation of YE 2011. H2 2012 saw a surge in exchange activity, with exchange executions grabbing a record month share in November. During December 2012 this trend reversed, with market composition settling back to H1 2012 levels………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

What was unique about the oil markets in 2012? What to expect in 2013? And how will OPEC and Saudi Arabia respond if demand weakens or new supply became readily available? Three paramount questions that need to be answered in order to illuminate the key forces acting in the oil markets especially that the global economy is still fraught with uncertainty.
To start with, an important facet to be mindful of while following oil markets is the inherent volatility that have been witnessed during the last five years, albeit the historically elevated year-end price levels, as demand downside risks and supply uncertainties from the unfolding sovereign debt crisis and geopolitics continue to lurk in the background………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Bank of America Merrill Lynch sticks to its 1H13 forecast of $109/bbl for Brent and sees Brent crude oil prices stuck in a range for now.
But faster economic growth later in the year could awaken the giant and put Brent prices on an upward path, the Bank notes in a report………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Oil production from the Organization of the Petroleum Exporting Countries fell by 430,000 barrels per day in December from a month earlier to 30.65 million barrels per day, according to a Platts survey of OPEC and oil industry officials and analysts released Monday.
The decline takes the cartel closer to its 30 million barrel per day output target, Platts said. “Global supply has been running above demand for many months, so the Saudis appear to have decided to simply take away a good chunk of that surplus all in one shot,” said John Kingston, Platts global director of news, in a statement. “It’s a wake-up call to let an increasingly glutted market know that the kingdom is not going to let the imbalance get too out of hand.”……………………………………….Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

The Executive Director of the International Energy Agency (IEA) Maria Van der Hoeven said Monday she doesn’t see a further decline in global crude production in 2013.
Saudi Arabia cut its oil production by close to 5 percent to 9.025 million barrels a day in December in response to lower demand chiefly from Asian customers, and comes amid expectations for lower demand for crude oil from the Organization of the Petroleum Exporting Countries this year………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Global commodities merchant Castleton Commodities International LLC, owned in part by billionaire investors Glenn Dubin and Paul Tudor Jones, said on Tuesday it has acquired oil and gas assets in Colorado and Utah in a bid to build out its physical natural gas business.
The firm acquired 180 oil and gas wells, 150,000 net acres in mineral leases, a gas processing facility and a 262-mile gas gathering system from Houston-based Patara Oil & Gas, it said in a press release………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Despite the rollercoaster start to the year for gold, the first quarter still could hold supportive elements for gold prices, said Barclays in a daily commodity snippet.
According to Barclays, the U.S. fiscal cliff issues are far from fully resolved, the debt ceiling vote is set to coincide with the deadline for the agreement on spending cuts and despite the tax deal, Moody’s has said it was not enough to remove the risk of a downgrade of the U.S. credit rating………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Gold and silver are not the only precious commodities known to us. While silver has been a favourite after gold for some time, diamond and platinum have also caught the fancy of individuals. This led Mumbai-based National Spot Exchange ( NSE) to launch e-platinum, an investment product in platinum in demat form under NSE’s e-series banner last year.
In the past nine months of its launch, e-platinum boasts of 43,000 investors, says Anjani Sinha, managing director, NSE. Sinha goes on to call these investors ‘intelligent’………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

This will be a make-or-break year for this commodity, as markets flirt with pre-recession highs and investors slowly move into “risk on” purchasing. Faber’s bullishness on the metal will certainly be tested in the coming months.
Marc Faber, author of the famed “Gloom, Boom & Doom Report,” is a respected name in the investing world. If ever there was a perma-bear, it would be Faber. He tends to focus on areas of the world that he sees problems in and allow that information to influence his investing decisions. But no matter what segment Faber has an eye on, his focus always circles back to one asset: gold. The precious metal has long been an important part of his holdings, and he has not been shy about vocalizing his love for the commodity………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

After reading precious metals analysts’ price forecasts over the years and then observing how markets actually moved, I’ve learned to not put much credence in where investment banks and others think gold and silver prices are headed.
For many years, they woefully underestimated how high prices might rise and, more recently, they’ve been overly optimistic about big annual gains continuing when they didn’t………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Large speculators cut back bullish exposure to most precious metals futures and options on the Comex division of the New York Mercantile Exchange and the Nymex, but picked up some base metals, according to U.S. government data.
For the week ended Jan. 8, large speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in gold, silver and palladium fall, in some cases sharply, in both the legacy and disaggregated reports. Platinum bucked the trend in the precious metals, and funds added smartly to copper in both reports………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

So, to mark the demise of the trillion-dollar coin idea, platinum just did something it’s not managed in almost a year. Its price rose above the price of gold Tuesday morning for the first time since mid-March 2012.
Platinum’s primary use meantime – in catalysts for petrol engines – is meantime enjoying something of a bounce back. German auto-giant Volkswagen reported on Monday that its sales rose 11% last year………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

2012 was a weak year in the palladium market due to lowered industrial demand. This year, the metal is expected to gain value. A focused ETF is a preferred method to gain exposure to this commodity.
“The limited supply has led to higher prices for the commodity, especially given the increased demand from the auto industry. Looking ahead, many analysts see 2013’s average prices that are steadily to sharply higher than they were in December 2012, particularly during the second half of 2013 when the global economy is expected to gain momentum,” Justin Kuepper wrote for Commodity HQ………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Since 2008, one of the topics I am frequently asked about is commodity investing in regards to both individual commodities and index investing. In 2003 investment in commodities was estimated at $15 billion and is now north of $200 billion.
The rise in popularity is mostly attributed to two reasons. The first being the risk diversification benefits of adding commodities to a portfolio and the second being a hedge against inflation………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

The World Bank’s top economist said a global series of tit-for-tat currency devaluations is possible but unlikely this year, despite the organization’s forecasts of upward pressure on exchange rates of major commodity exporters.
Kaushik Basu, the World Bank chief economist, said fear of retaliation is likely to prevent a series of competitive devaluations known as a currency war. Expensive yen, Brazilian reais and Australian dollars make those countries’ products more expensive in world markets, curbing exports………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

For the first time in three years, Asia will lead a rally in emerging-market currencies as rising global trade lifts the region’s exports, according to the most- accurate foreign-exchange forecasters.
India’s rupee will climb 5 percent in 2013 after losing 17 percent over the past two years, according to Oversea-Chinese Banking Corp Ltd, the best forecaster based on data compiled by Bloomberg News. The Philippine peso will gain 4.3 percent to its highest since 1999, said Standard Chartered Plc and Wells Fargo & Co, which tied for second. That would put them among the top-three developing-nation currencies, Bloomberg News data show………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

Iran has decided to replace dollar and Euro with other currencies in its trade with foreign partners, Economic and Finance Minister Seyed Shamseddin Hosseini said.
According to him, the government is intended to change the model of the country’s foreign trade relations. In foreign trade transactions, Iran is intended to use the local currencies of Iran’s trade partners………………………………………..Full Article: Source

Posted on 16 January 2013 by VRS |  Email |Print

The value of the world’s carbon market fell for the first time last year. More than one-third was wiped from the price of carbon credits in a plunge that reflects the continued global economic crisis and uncertainty over the future of emissions-trading schemes.
Is it a good time to buy carbon credits? Perhaps not yet, but some shoots of recovery are visible, not least in my own country of China. Largely unnoticed in the West, Chinese carbon trading is getting up and running. In just two years, officials have designed and started to implement seven trading trials that cover around one-third of China’s gross domestic product and one-fifth of its energy use………………………………………..Full Article: Source

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