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Commodities Briefing 17.Jan 2013

Posted on 17 January 2013 by VRS |  Email |Print

Goldman Sachs Group Inc on Wednesday said its commodities revenue suffered in the final quarter of 2012, while JPMorgan Chase & Co reported a plunge in trading risk from a year ago.
Analysts said falling oil, metals and grains prices as well as higher trading uncertainties as the United States appeared headed for a fiscal crisis toward year-end created a weaker trading environment for commodities. Goldman Sachs, Wall Street’s leading investment bank, said its value-at-risk (VaR) in commodities stood at $20 million in the fourth quarter, down from $22 million in the third quarter and $26 million a year ago………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Goldman Sachs have released their mining commodity supply, demand and price forecasts for the short, medium and long term, following the extension of their economists annual GDP and IP forecasts.
This includes updated annual price forecasts for 2013-2017, as well as long-term prices, for the bulk commodities (thermal coal, metallurgical coals, iron ore), as well as base and precious metals, mineral sands, and rare earths. These forecasts form the basis of Goldman Sachs’ Global Investment Research mining equity models………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Agricultural commodities may recapture some of their investor appeal lost during the late-2012 sell-off, Societe Generale said, rating Kansas wheat and lean hogs as its top bets in the complex.
Funds have quit positions in many commodity types, partly thanks to a rush back into equities, towards which investors have their most bullish positioning since February 2011, according to a Bank of America Merrill Lynch survey………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

The most vexing problem currently facing the world is finding affordable commodities. When push comes to shove, if oil still traded in a cyclical fashion at around $20 per barrel and copper averaged about a buck a pound, today’s debt problems would be much more tractable, and growth would be much easier to accommodate.
Indeed, a strong argument can be made that the 2007-08 bubble occurred due to consumer borrowing to keep even with falling living standards. And living standards continue to fall as corporations resist higher wages in favor of cost controls - especially costs related to commodities………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

When it comes to commodity prices, the “drought” bloom is off the rose, and values are fading with reduced demand and the prospect of increased competition from South America in the near future. However, corn and soybeans remain at record level prices with the psychological help of razor-thin carryout. But the volatility in commodity prices has not been the only area where economic values have whip-sawed agriculture.
While corn and soybean prices took farmers on some wicked roller coaster rides in the past year, there have been some other markets that have had lesser volatility, but which should be noted because of their integrated impact……………………………………….Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

OPEC expects demand for its crude to be lower than expected in 2013 because of higher supply from rival producers, indicating inventories could build up substantially even after a cut in output by top exporter Saudi Arabia.
The Organization of the Petroleum Exporting Countries’ monthly report indicated world supply will comfortably outstrip demand in the first half of 2013, even after Riyadh cut output in December by almost 500,000 barrels per day (bpd) to fend off a supply overhang and defend prices well above $100 (62.56 pounds) a barrel………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

In spite of market participants focusing more of their attention on the perception of what global oil demand might be down the road, the nearby fundamentals remains mostly biased to the bearish side. Last night’s API oil inventory report was neutral to bearish after another large build in gasoline stocks (see below for more details).
The World Bank issued their latest global forecast suggesting that the global economy is still fragile as high income countries continue to suffer from volatility and slow growth………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

The Organization of the Petroleum Exporting Countries has predicted a world oil demand growth in 2013 saying it will reach 800,000 barrels a day.
Crude will be mostly needed by transport and machine-making industries. In its monthly Oil Market Report released Wednesday, the OPEC said that this year economic turbulence will not affect the demand that much compared to last year………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Increasing output of shale oil in North America will put pressure on OPEC to cut its own crude production, resulting in a global oil supply buffer on a scale not seen since oil prices were far lower more than 10 years ago, BP PLC said in its annual energy forecast Wednesday.
BP’s forecasts illustrate the extent to which the North American boom, first in shale gas production and now in shale oil, has redrawn the global energy map. However, the company doesn’t expect the shale revolution to spread by 2030 on any great scale to Asia or Europe, where conditions for investment in unconventional oil and gas fall short of those in North America, BP said………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Accelerating global energy efficiency means fuel use is rising far slower than prosperity, largely because Chinese industrial development is increasingly energy efficient, a study by oil company BP Plc found.
In its annual Outlook 2030 report, BP predicts a 36 percent increase in energy use between 2011 and 2030. That outstrips forecast population growth of 18.5 percent to 8.3 billion but comes as world income is expected to roughly double in real terms………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

The price of gold was on the rise today after Germany’s decision to repatriate its bullion. We explain how you can profit. Gold enthusiasts were bouyed today by the decision of Germany’s central bank to pull its gold reserves out of Paris and New York.
It follows warnings from the country’s Court of Auditors that bullion held abroad had “never been verified physically” and was not under proper control………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Gold bugs are never the kind of people to take any piece of news at its simple face value. There’s always got to be some sort of feverishly dark motive behind China’s latest change to its bullion sales regime. The Viennese authorities have surely got to have had a reason for that massive issue of memorial gold coins?
And why is a London shopping mall selling 250 gram gold bars from a vending machine at £11,000 a pop? Damn you, Bilderberg, what are you up to? So the news that Germany has decided to bring €27bn worth of physical gold back to Frankfurt, from its normal resting place in various parts of the globe, is more reason for excitement. What evil thing does the Bundesbank know about New York, the home of some 1500 tonnes of German gold, that it isn’t telling us? ……………………………………….Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

A slick new infographic from Demonocracy.info provides readers with a vivid reminder of the sheer paucity of physical gold on our planet by providing a comparative visual depiction of all the gold ever mined in human history.
Assuming prices hit $2000/oz, a single bar of gold, which weighs 12.44 kg, is worth $800,000. According to Demonocracy’s data all of the gold ever mined in history weighs 166,500 tonnes in total, which while hefty in mass would be equivalent in size to a modest office building if all piled together………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

HSBC, which had forecasted gold prices would hit $2000 per ounce in the second-half of 2012, is now paring back its forecasts for 2013.
The bank has lowered its gold price forecasts for this year to $1,760 an ounce from $1,850 previously. The bank expects the bullion to remain volatile, and trade within a range of $1,575 to $1,950………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Investment demand should continue to support gold prices in 2013, said a metals consultancy firm on Wednesday. Thomson Reuters GFMS said the reasons that have supported gold prices in its current bull run remain intact. “Although there is now growing speculation around the structure and longevity of the Fed’s QE (quantitative easing) program, policies of ultra-low interest rates across the Western economies will persist in 2013.
This will continue to support investor interest in gold in the absence of low risk investments that can offer acceptable yields,” said Philip Klapwijk, global head of metals analytics at Thomson Reuters GFMS………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Gold prices are likely to average $1,847 per ounce this year as central bank buying continues and the US liquidity programme remains in focus. This is the view of Thomson Reuters GFMS’s Philip Klapwijk.
Klapwijk said, “it may be that 2012 turns out to be the pause that refreshes - the 6% rise in annual average prices is still not that bad [but]… we still think that the outlook is pretty positive for 2013 given the expected economic and financial backdrop this year which should support a high if not higher level of investor and also in fact central bank interest on the buy-side in gold. “……………………………………….Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Are you thinking of investing in gold, silver, platinum or palladium? What’s the best way to gain exposure to precious metals? Thinking of jumping on the precious metals bandwagon?
The share of Millionaires interested in investing in precious metals more than doubled in the last two years, from 6 percent at year-end 2010 to 15 percent at the end of 2012, according to the latest research from Spectrem’s Millionaire Corner………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Gold was the king of commodity exchange-traded funds (ETFs) in 2012. At the end of the year, assets worth $199.8 billion were under management in commodity ETFs, representing an increase of $29 billion over 2011′s assets under management (AUM).
That asset increase was dominated by gold, which increased by $24 billion, bringing total assets in gold ETFs to $146.6 billion, Nick Brooks, head of research and investment strategy at ETF Securities, said………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Exchange-traded funds have certainly leveled the playing field for regular retail investors. Asset classes once reserved for institutional and uber-wealthy investors — like convertible bonds, pipeline master limited partnerships and even managed futures — are now available to us average Joes.
And perhaps no asset class has become more popularized than commodities. Exploding populations are driving up the need for more energy, metals and other materials, as well as food. ……………………………………….Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

A conflict over potentially valuable derivative trading data heated up on Wednesday, underlining how an overhaul of Wall Street after the financial crisis is sparking acerbic competition battles.
The Depository Trust & Clearing Corporation (DTCC), which performs back-office functions for investment banks, threatened to sue the top U.S. derivatives regulator over how rival CME Group Inc (CME.O) plans to handle the data………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

The global risk appetite weakened over the US and Asian sessions, as the World Bank revised to the downside the Japanese and US growth, and predicted a second year of contraction in the Euro-Zone.
While 2013 was seen as a recovery year for the world’s leading economies so far, the anticipations lost pace as the structural, economical and political concerns remain far from being resolved, particularly in US and the Euro-Zone. In Japan, the Yen weakness raised concerns regarding a potential debt default, while the Fed President Plosser warned over the broadening of ‘currency wars’………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Faced with a stubbornly slow and uneven global economic recovery, more countries are likely to resort to cutting the value of their currencies in order to gain a competitive edge.
Japan has set the stage for a potential global currency war, announcing plans to create money and buy bonds as the government of Prime Minister Shinzo Abe looks to stimulate the moribund growth pace………………………………………..Full Article: Source

Posted on 17 January 2013 by VRS |  Email |Print

Last week, the U.S. National Climate Data Center declared that 2012 was the warmest year on record for the lower 48 states by a healthy margin. In fact, 2012 was more than 3 degrees Fahrenheit warmer than the 20th century average and 1 degree warmer than the previous record year of 1998.
In addition, the National Oceanic and Atmospheric Administration flatly declared, in the draft version of its National Climate Assessment report, “Climate change is already affecting the American people” and it is “primarily driven by human activity.”……………………………………….Full Article: Source

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