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Commodities Briefing 23.Jan 2013

Posted on 23 January 2013 by VRS |  Email |Print

Commodities rose to a three-month high after the Bank of Japan (8301) said it will introduce open-ended asset purchases from 2014, boosting speculation that a revival of the economy will raise demand for natural resources.
The Standard & Poor’s GSCI Index of 24 raw materials rose as much as 0.6 percent to 664.62 today, the most since Oct. 19. Natural gas jumped 2.1 percent and soybeans gained 1.2 percent. Bank of Japan Governor Masaaki Shirakawa and six of nine board members voted for a 2 percent inflation target, a pace not sustained in Japan since the early 1990s, which is aimed at reviving the economy………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

Ask the boss of any major commodities trading house for a bright spot in raw materials demand and the answer may surprise you. It is not China, India, Brazil or any other superfast growing emerging country, but the US.
Commodities trading executives say that the US economy, boosted by cheap credit and even cheaper energy, is starting to pull ahead after years of lacklustre growth, pushing up demand for anything from copper to corn to crude oil………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

The price of Organization of Petroleum Exporting Countries, OPEC basket of 12 crudes has risen from $108.01 to $108.92 per barrel, according to OPEC Secretariat calculations. The price is still in excess of the budget projections of many oil exporting nations including Nigeria, meaning that they would be able to generate funds for the implementation of the budget.
The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela)………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

The world’s most influential oil producer, Saudi Arabia, reduced its oil production towards the end of 2012, causing many to conclude the Kingdom sought to reinforce global oil prices, but the Internal Energy Agency has a different take.
Saudi Arabia had been pumping oil at 30-year highs for most of 2012, but cut back supplies by just below 300,000 barrels per day in December to 9.36 million b/d, the IEA said in its most recent Monthly Oil Market Report………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

U.S. dollar gold prices hovered above $1,690 an ounce Tuesday morning in London, close to one-month highs, while prices in yen quoted on Tokyo’s gold futures market set a new record, following an announcement of open-ended asset purchases and a new, higher inflation target by Japan’s central bank.
“[Gold] is struggling along the 55-day moving average at $1,695.96 and just below the downtrend channel resistance line at $1,704.89,” says Commerzbank senior technical analyst Axel Rudolph. “We would like to see a daily close above the latter being made before we become medium-term bullish again.”……………………………………….Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

Our ever-popular Periodic Table of Commodity Returns has been updated through 2012. Investor Alert readers love this chart as it shows a decade of results across 14 different commodities, providing strikingly rich information in a very familiar format. Last year, 11 commodities rose in value, with wheat rising as the top crop after seeing a significant decline in 2011. It was a similar rags-to-riches story for the next few leaders, including lead, zinc, natural gas and platinum, which all climbed double digits in 2012 after falling in 2011.
Only three commodities declined over the year: Crude oil fell by 7% after rising 8% the previous year. Nickel declined for the second year in a row. In 2012, the metal lost 9% and in 2011, nickel fell another 24%………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

The historical performance of gold in the year following a U.S. presidential election, the devaluing of the U.S. dollar and current low valuations for gold miners all bode well for an upturn this year, but some doubts remain. Learn how professional investors decide which companies are worth investing millions of dollars in this year.
Five fund managers participated in the survey: Frank Holmes of U.S. Global Investors, Brian Ostroff of Windermere Capital, Steve Palmer of AlphaNorth Asset Management, Peter Vermeulen of Plethora Precious Metals Fund and Adrian Day of Adrian Day Asset Management………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

The government on Monday raised the import duty on gold and platinum by 2 per cent to 6 per cent, the second such increase in less than one year. The move is aimed at discouraging gold buying and controlling the ballooning fiscal deficit.
How does it affect buyers: Jewellers and analysts said buyers will have to shell out Rs. 600 - Rs. 700 more per 10 gram of gold in the short term. Why was the duty hiked: India is the world’s biggest importer of gold and the precious metal is the biggest contributor to the import bill after crude oil. India’s current account deficit reached an all-time high of 5.4 per cent of gross domestic product in the July-September quarter………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

If 2012 was a year of transition in the global economy, 2013 is likely to see a number of macroeconomic chickens coming home to roost that could disrupt commodities.
The first of these risks, according to French Bank Natixis, lies within the US, which looks like it may finally have to stop the rapid expansion of its balance sheet and, instead, attempt to follow the path of fiscal austerity already tried by Europe. Whether or not this will be contemplated and, indeed, if it is actually possible, is likely to be one of the big questions of 2013………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

Palladium is expected to set a record average high this year and platinum to post its best price performance in two years as South Africa’s supply problems worsen and the economic cycle starts to favour industrial metals, a Reuters poll showed on Tuesday.
More upbeat growth prospects in China and the United States are expected to aid a demand recovery for cars - lifting automakers’ demand for platinum group metals, which are used in catalytic converters - and, in platinum’s case, jewellery………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

Barclays expects zinc import demand of China to remain strong since, after a recent clamp down on copper financing, zinc now appears to be the metal of choice for this type of business, the Bank said in a recent report.
In industrial metals, demand for intermediate and raw materials like alumina and base metals concentrates continues to grow much faster than imports of metal………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

ETF Securities is to launch a string of products on the Swiss exchange on Tuesday designed to cut the risk of exposure to currency fluctions for commodities investors in Switzerland.
The London-based issuer of exchange-traded commodities (ETCs), which give investors exposure to products such as coffee, oil or nickel without having to hold them, said it was listing 28 Swiss-franc hedged commodities securities on the SIX Swiss Exchange………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

The beauty of a pendulum is that once set in motion it can swing predictably forever. The difficulty is getting it to return to the middle. This seems to be the problem with regulation of derivatives.
In the 1990s, derivatives were widely heralded as new instruments that could improve the transference of risk. In 1999, then Federal Reserve Chairman Alan Greenspan stated: “By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.” He went on to argue that they “enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

The public interest in an orderly approach to the nation’s business seems insufficient to prompt Congress to act in a timely fashion. The national legislature apparently needs some perverse incentive to spur it to action—either a cliff (fiscal or otherwise) to fall off, a ceiling (debt limit) to be crushed under, or a meat ax (automatic spending cuts known as sequester) hanging over pet programs.
This same dynamic has been in play for decades in farm policy. We just didn’t realize it. It took the narrow escape from a doubling of milk prices early this month to remind us that we live in the shadow of a “food bomb” too………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

The forecast expansion of Australian coal mining and exports would be the world’s second-largest contributor of new carbon dioxide emissions from fossil fuels if fully realised, research by Greenpeace International has found.
An analysis of the planet’s 14 largest proposed, coal, oil and gas developments - to be released on Wednesday by Greenpeace - finds if Australian coal production expands as projected, the mining, production and burning of the extra resources would by 2020 result in 759 million tonnes of new global carbon dioxide emissions a year over 2011 levels………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

As leaders gather for the World Economic Forum in Davos, signs of economic hope are upon us. The global economy is on the mend. Worldwide, the middle class is expanding by an estimated 100 million per year. And the quality of life for millions in Asia and Africa is growing at an unprecedented pace.
Threats abound, of course. One neglected risk — climate change — appears to at last be rising to the top of agendas in business and political circles. When the World Economic Forum recently asked 1,000 leaders from industry, government, academia, and civil society to rank risks over the coming decade for the Global Risks 2013 report, climate change was in the top three. And in his second inaugural address, President Obama identified climate change as a major priority for his Administration………………………………………..Full Article: Source

Posted on 23 January 2013 by VRS |  Email |Print

Airlines may earn as much as 1.3 billion euros ($1.7 billion) after they passed onto customers the costs of European pollution curbs and won a freeze on their carbon trading obligations, a report showed.
Carriers may cash in between 436 million and 872 million euros after they raised ticket prices following their inclusion in the European Union emission trading system last year, environmental research institute CE Delft said in the report. The windfall gains may rise by further 243 million to 486 million euros after the EU proposed to temporarily exempt from its carbon system flights into and out of the region, according to the report………………………………………..Full Article: Source

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