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Commodities Briefing 21.Jan 2013

Posted on 21 January 2013 by VRS |  Email |Print

Hedge funds raised bullish commodity wagers by the most since November as a jump in U.S. housing starts and the first acceleration in Chinese growth since 2010 drove prices to a three-month high.
Speculators increased net-long positions across 18 futures and options by 4.3 percent to 682,521 contracts in the week ended Jan. 15, the biggest gain since Nov. 27, U.S. Commodity Futures Trading Commission data show………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

The global growth and geopolitical tensions across the Middle East will dictate commodity performance as energy, in addition to agricultural sectors will continue to be volatile, the National Commercial Bank said in its Saudi Economic Review for the month of January this year.
In terms of livestock, Russia recently enacted a ban on US meat exports due to a contentious feed additive. As Europe recovers from its debt crisis, the manufacturing sector will trigger an upward push on industrial metals………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Commodity markets moved up a gear during the past week as strong performances were recorded across most sectors apart from industrial metals and livestock. Chinese and US economic data continued to improve, raising the prospects for the global economy and supporting increased demand for commodities.
The S&P 500 index recorded additional gains while the dollar was unchanged against the euro but made additional gains against the Japanese yen, which hit a 2.5 year low — the main story in currency markets so far this January………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

UBS plans to grow its commodities index business even as the firm winds down its fixed income unit, retaining what bank executives see as an important product for UBS’s wealth management clients.
Edmund Carroll, UBS’s global head of commodities trading, will be relocating from London to New York, bank executives told Reuters during an interview this week. He will report to Roger Naylor, global head of equity derivatives………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Deutsche Bank AG (DBK) will continue to provide agricultural-investment products after Germany’s largest bank concluded that they’re not the cause of rising prices for farm commodities.
“There was no evidence that speculation was responsible for price developments,” Juergen Fitschen, the company’s co- chief executive officer, said at a press conference in Berlin today. “It can contribute to volatility under certain conditions but there are also other reasons for volatility.”……………………………………….Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Saudi Arabia exported 1.7 percent less crude in November than in the previous month, while Iraq and five other OPEC producers also curbed shipments, according to the Joint Organizations Data Initiative.
The kingdom, the largest producer in the Organization of Petroleum Exporting Countries, shipped 7.15 million barrels a day in November as it reduced monthly output by 2.4 percent to 9.49 million barrels a day………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Recent news from scientists of the British Antarctic Survey and partner research institutions examining ice cores showing the climate record for tens of thousand of years is that ice sheet retreat due to global warming often suddenly stabilises, “for decades to centuries”, despite the warming still going on.
This is also what is happening in the oil patch: all the supply-demand fundamentals say that prices should decline - but they stay high or go on growing………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Gold may climb over the next three months as U.S. lawmakers attempt to tackle the country’s debt ceiling and the world’s largest economy slows, Goldman Sachs Group Inc. said, advising investors to place bets on advances.
“We see current prices as a good entry point to re- establish fresh longs,” analysts Damien Courvalin and Alec Phillips wrote in a Jan. 18 report. The bank reiterated a three- month target of $1,825 an ounce, as well as a forecast for prices to weaken in the second half as the U.S. economy rebounds………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Few dispute that gold offers protection against inflation and debt crises. The metal cannot be printed at will and does not carry a risk of default. Where opinions do vary – wildly – is whether or not we face the risk of such inflation or debt crisis.
The message today is that the Western economies are pretty much under control again, the United States avoided its fiscal cliff, and European officials assure us that the worst is over. But this is public relations talk. During the 2008-09 global credit crisis, governments and central bankers were only able to save the global financial system with a radical programme of money printing and debt expansion………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

For the global commodity market, the good news last week was that the OECD composite leading indicators point to stabilising economic growth in most major economies even as the leading indicators for the US continue to point to economic growth firming, while in China and India the signs of a turning point are more marked than was the case a month ago.
This improving global economic environment should be positive for growth-driven commodities such as base metals and energy products………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

If gold is able to firm up here and then it has a good shot to rally back to $1,750-$1,800 over the next few months. If we get the bullish scenario and a fundamental catalyst shift then expect gold to break past $1,800 in Q3. That would mean that gold consolidated for two years which would be its longest consolidation on record. The longer the consolidation, the more explosive the breakout.
Following that editorial, we noted that various sentiment indicators continued to look favorable even as the market began to make some progress. For example, the daily sentiment index for gold touched 6% yet gold didn’t make a new low. At the same time we saw a continued reduction in speculative long positions……………………………………….Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Platinum costs more than gold again, a shift that reflects rising confidence in the global economy and investors’ bets the Federal Reserve is closer to ending its massive stimulus efforts.
Platinum prices settled with a premium over gold earlier this week for the first time since March 2012. As of Thursday’s futures settlement, platinum cost $1,700.50 an ounce, almost $10 more than gold at $1,690.80 an ounce………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Platinum sure isn’t as famous as gold and silver when it comes to investing. Platinum has a much shorter history as Indian people are mostly fascinated to gold and silver but as the economy is on complete reform some savvy investing pros are suggesting that under the right conditions platinum may prove to be fruitful and pay some price payback as reported by Reuters.
Four main reasons can be considered for platinum being double the price of gold few years back. 1. Platinum is almost twice heavier than gold. 2. Most of the gold jewelries are 58.5 percent pure while platinum is 95 percent pure………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Most iron ore forecasts will be wildly wrong because of the jumpy and largely opaque nature of how the price series is generated. Forecasting commodity prices is like buying a second hand car. Only the car’s previous owner and perhaps the dealer really know what the car is actually like. In contrast you, the buyer, are an outsider with very limited insight and can only judge the car’s true value by what you see in the car yard.
Second hand cars, and iron ore, are classic cases of asymmetric information at work, pioneered by George Akelof’s 1970 study on the market for lemons………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

The carry trade is alive and well, at least in emerging-market currencies. As safe-haven currencies in the developed world such as the Swiss franc and the Japanese yen begin to depreciate, investors are using them to fund positions in higher-yielding currencies such as the Russian ruble and Mexican peso.
The strategy didn’t work particularly well in emerging-market currencies last year. But the lag in their appreciation compared with the gains posted by advanced-economy currencies–such as the euro and the Australian dollar, which benefited as fears of a European sovereign crisis faded–could in itself be a reason for these currencies to rally this year………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Experts expect the price of the Egyptian pound to continue to depreciate against foreign currencies throughout 2013, a result of a rise in the US dollar on the Egyptian market towards the end of 2012.
Throughout 2012 Egypt’s currency dropped 8.4% against the euro, which cost EGP 8.4 by the end of the year. Egypt’s currency dropped a total of 11% against the sterling in 2012………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Singapore’s dollar will underperform most regional counterparts this year as a pickup in the global economy and faster growth among its peers reduces demand for the republic’s top-rated securities, according to HSBC Global Asset Management and Mizuho Asset Management Co.
Interest in the slowest-growing nation of Southeast Asia’s five-biggest economies will diminish in 2013 as returns waver, Gordon Rodrigues, investment director at HSBC Global Asset in Hong Kong, said in a Jan. 14 interview. Prime Minister Lee Hsien Loong said on Dec. 31 that the $240 billion economy will expand 1 percent to 3 percent this year, less than the past decade’s 6 percent average………………………………………..Full Article: Source

Posted on 21 January 2013 by VRS |  Email |Print

Carbon traders are backing China to revive a global emissions market that lost 34 billion euros ($45 billion) last year as it shrank for the first time in history.
Investors from Climate Change Capital in London to Climate Bridge Ltd. in Melbourne said this month they are seeking involvement in what may become the world’s largest emissions market. Beijing’s worst-recorded air pollution has renewed pressure on the government, which aims to cut carbon dioxide emissions by as much as 45 percent before 2020………………………………………..Full Article: Source

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