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Commodities Briefing 29.Jan 2013

Posted on 29 January 2013 by VRS |  Email |Print

Commodities are among the most skittish investments. Not only do they react to global economic forces, they can seesaw with supply and demand, China’s voracious appetite for raw materials and the weather.
Since commodities are tangible things that are mined or grown, they are hard to hold and often bought through futures contracts, which have their own peculiarities. Yet what is undeniable about commodities is that they are usually a good tracker of broad economic growth, inflation among producer prices and they run inversely to the dollar’s decline. You should have a piece of them in your portfolio, but you have to be careful about how you hold them………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

Commodities are in for some good times, but don’t count your bullion just yet. Analysts at Danske Bank say that strong Chinese growth will set the stage for solid gains in the first half of 2013, but may also prove to be the trigger for a depressing back half of the year.
Mix that with an expected withdrawal of aggressive monetary easing from central banks, and investors should brace for both a boom and bust in the commodity markets in the year ahead………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

Although it may not be reflected in your supermarket bills, prices for many of the items on your grocery list are in decline on the wholesale level. The trend in the venerable Commodities Research Bureau (CRB) index of commodities futures prices is down since September and down more than 18% since its all-time high set in April 2011.
To be sure, trends change, and within those trends there are periods of movement in the opposite direction. The index is up roughly 1.2% for January thanks to strength in grains such as soybeans and corn. But the argument for food price inflation cannot be made in the futures markets………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

A rare glimpse into life at Glencore International Plc was given to users of link-sharing website Reddit recently when an anonymous trader at the Swiss commodities giant — or at least someone claiming to be one — did a Reddit Ask Me Almost Anything.
The trader answered questions ranging from “How much do you make?” to “Would you get fired if they knew you did this?” on the popular “IAMA sub-Reddit,” which has previously hosted numerous celebrities, industry leaders and even U.S. President Barack Obama………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

Opec has struck an an upbeat tone about the oil market for this year, anticipating prices of around $110 a barrel on average for 2013. Abdalla El-Badri, Opec secretary-general, added that the oil cartel, which accounts for 40 per cent of global oil supplies, would probably keep its production stable for the time being, after member countries cut output in November and December.
“As of now I think the situation is really improving,” he said. Speaking about the outlook for the oil market, he added: “When I see growth in China is improving, growth in India is improving, when I see growth in the US is improving, I think that unless something dramatic happens in 2013, it will be a repetition of 2012.”……………………………………….Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

Oil traded near the highest level in four months in New York on signs of economic growth in the U.S. and after OPEC Secretary General Abdalla El-Badri said prices are unlikely to drop this year. Futures were little changed after climbing 0.6 percent yesterday. U.S. durable goods orders last month rose by more than the highest forecast in a Bloomberg survey, Commerce Department data showed.
Federal Reserve policy makers start a two-day meeting today to discuss continuing asset purchases to boost the economy. The oil market is well-balanced and the Organization of Petroleum Exporting Countries doesn’t “envision a price collapse” in 2013, El-Badri said in London………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

U.S. energy independence has been a dream since the oil embargoes of the 1970s. But this vision of a “Saudi America” has always been just a dream. Investors and non-investors alike started talking in earnest about realizing that dream last November. That was after the International Energy Agency’s (IEA) latest World Energy Outlook said that the U.S. would overtake both Saudi Arabia and Russia in oil output by the second half of this decade.
Its forecast calls for the United States to be producing 11.1 million barrels a day in 2020 compared to Saudi Arabia’s 10.6 million barrels a day. The IEA’s Outlook went on to say that by 2035 the United States could be almost self-sufficient in energy, and talks about “Saudi America” began to surface………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

India’s obsession with gold is well documented. Jewellery collections here are often never complete without the yellow metal and no savings plan is perfect for an average Indian avoiding a piece of gold, irrespective of how appealing and profitable it may be.
While the country’s fascination for gold has its fair share of critics, Indians, of late, have developed a major interest in a related section - diamonds. According to the Global Diamond Industry Report 2012 released by business consultant firm Bain & Company in collaboration with Antwerp World Diamond Centre (AWDC), India is world’s third-largest diamond market, with $8.5bn annual revenue, and is growing rapidly………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

Gold prices tumbled last week failing to breach $1700 per ounce levels triggering profit taking amid improving market sentiments, according to Barclays Research.
The solidity of the physical market will set the downside for prices, while buying in China has been strong ahead of the Lunar new year, it will need to be coupled with a pickup in other regions to provide strong support. This week’s FOMC meeting and US non-farm payrolls will be key in setting gold’s price trajectory………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

The recent situation in the currency markets is exactly what precious metals investors like to see – for some time now we have been witnessing the strength in euro and weakness in the U.S. dollar. Unfortunately, what we did not see was the usual rally in gold, silver and other precious metals that normally accompanies such a set-up. That is mainly because of the unnatural state of correlations that we already discussed before.
But there were exceptions, such as the rally at the beginning of January, sparked by a plunge in dollar………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

Indonesia, the biggest tin supplier, is poised to ship the least metal in a decade, extending shortages into a fourth year at a time when surpluses are emerging for most other industrial metals.
Sales will drop 24 percent to 75,000 metric tons because most smelters won’t meet a higher purity standard that starts in July and ore reserves are diminishing, according to the median of 13 exporter and analyst estimates compiled by Bloomberg. Prices will rise 18 percent to $28,750 a ton on the London Metal Exchange this year, the median of 14 forecasts shows………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

China Securities Regulatory Commission (CSRC) has published provisional rules for the operation of gold ETFs, which pave the way for introduction of gold ETFs into China’s financial markets. China Daily quoted an official from the CSRC Saturday who said that there is no specific timetable for the listing of gold ETFs in China.
The move is part of the Chinese Central Government’s effort to promote the development of China’s gold and capital market. China is the world’s largest gold producer and consumer according to the China Gold Association………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

Not even full month into the new year and an arguably surprising theme has been seen with emerging markets ETFs that track nations viewed as raw materials plays. The theme being that some of these ETFs have shown little correlation to price action in the commodities traders view the ETFs as often being highly correlated to.
Interestingly, this theme is playing out to the advantage of some ETFs and to the disadvantage of others. Said differently, some emerging markets funds that have a reputation for being highly correlated to a particular commodity are outperforming that commodity by wide margins………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

By now you must already know the deal with the sagging Japanese yen. Japan has a new Prime Minister who has embarked on a promise of aggressive fiscal and monetary easing in order to beat deflation. The yen has been plummeting since November. That’s one currency that everyone’s bearish on.
The other story, and this is just getting started in the last few weeks is the British pound. Last week, the country came out with a negative GDP print, and people are talking about a “triple-dip” recession………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

In more than three years of a crisis that has threatened the very existence of Europe’s single currency, one thing has become evident: no meaningful action – be it a multibillion-euro bailout or new fiscal rules – can go forward without the consent of Angela Merkel, Germany’s chancellor.
As policy makers, traders and companies mull the fate of the EU’s carbon market, the world’s largest, they are discovering the same may hold true here………………………………………..Full Article: Source

Posted on 29 January 2013 by VRS |  Email |Print

A survey that shows businesses have estimated a 14.5 per cent jump in energy costs due to the carbon tax underlines why the impost must be scrapped, Tony Abbott says.
The federal opposition leader says the Australian Industry Group (Ai Group) survey shows company power price rises are well above the 10 per cent increases the federal government has so far been prepared to concede. He says the additional cost is an example of how the carbon tax is worsening job uncertainty and elevating the cost of living………………………………………..Full Article: Source

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