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Commodities Briefing 04.Feb 2013

Posted on 04 February 2013 by VRS |  Email |Print

Leading commodity forecasters have predicted a new stage of the commodity “supercycle” this year, underwriting optimism in the sector after a bumpy 2012. In what would be welcome news in an election year for a federal government banking on a mining tax that has yet to deliver any revenue, the prediction is for higher commodity prices this year.
Colin Fenton, JPMorgan’s chief commodities strategist and head of commodities research, said he was “getting bullish” as it was clear that the mid-cycle slump was over. “The data is coming in much stronger than we had anticipated for the first part of January,” the New York-based strategist told The Australian during a visit to Sydney……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

The world is happier and no longer hitting the hard stuff. That is one way of reading a big divergence between two major asset classes: stocks and commodities. The MSCI World index has rallied 13% since its mid-November low point. Hard assets have trailed in its wake: The Thomson Reuters/Jefferies CRB commodities index is up just 3.9%.
Correlation between the two has been falling. One reason is that fear has eased. Assets tend to march in extreme unison when investors think the world is going to hell. The past couple of months saw a reasonable amount of good news on the economy, including the avoidance of the U.S. “fiscal cliff.” That has fueled rallies in most major stock markets. …………………………………….Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

Commodity prices fell to earth last year, and even gold has started to lose its lustre. But before deserting the sector, investors should consider the part that a resilient China could play in its recovery.
Commodities markets lived a boom in the mid-2000s, creating fortunes for investors in staples as varied as oil, copper and soya. Even after the start of the current crisis, many commodities continued to perform strongly thanks to unfettered demand from the Chinese economic machine……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

Speculators increased their bullish commodity wagers for a third straight week before prices capped the biggest January rally since 2006 on signs that the global recovery will be sustained by central bank stimulus.
Hedge funds and other money managers raised net-long positions across 18 U.S. futures and options in the week ended Jan. 29 by 5.6 percent to 800,738 contracts, the highest since Dec. 11, U.S. Commodity Futures Trading Commission data show……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

New Zealand commodity prices rose for a sixth straight month in January led by increasing pelt prices, though the strength of the kiwi dollar ate into the benefits for local producers.
The ANZ Commodity Price Index rose 0.3% last month to a 10-month high of 272.6. In local currency terms, the index fell 0.5% to 177.2, its second monthly decline. The price of pelts climbed 55 to a 12-month high, followed by a 3% gain in log prices and a 2% increase in skim milk powder prices……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

The International Energy Agency said it was too early to revise its estimate for Iranian oil exports amid speculation that the Persian Gulf nation boosted shipments in December. Iran’s crude shipments were 1.2 million barrels a day, the Paris-based agency said in a Jan. 18 report, an estimate it won’t be revising until next month, Diane Munro, a supply analyst at the IEA, said.
That’s down from 1.45 million in November. Reuters reported earlier today that Iranian exports rose to 1.4 million barrels a day last month, the highest level since European sanctions began, citing data it compiled from analysts and shipping and customs data……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

Gold moved sideways for the last six weeks, with each rally and correction sparking either new hopes or new fears about the yellow metal. But focusing on such short-term volatility can rarely bring any good when it comes to long-term investments. That’s one of the things that we often stress – one should always analyze the market form different perspectives and keep in mind their order of importance. This week we will focus on the long term.
Another thing, that we have already mentioned, is that such universal commodities, traded on many exchanges and in many currencies, like gold ought to be assessed taking other currencies into consideration……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

Credit Suisse meantime published a note entitled ‘Gold: The Beginning of the End of an Era’, arguing that the 2011 gold price peak could prove to have been the high “in this cycle” as the financial crisis grows less acute.
Like gold, silver also edged higher this morning, ticking above $31.40 an ounce, while other commodities were broadly flat. China’s manufacturing sector meantime continued to expand in January, though at a slower rate than the month before, according to official purchasing managers’ index data published by Beijing Friday……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

As gold companies grew, too few large deposits have been discovered to sustain current production rates. Though, in recent years, the development of a handful of large mines and the threat of others to follow provided the useful impression that the Production Cliff would be deferred, at least to the point where it was perceived to be a next-cycle problem.
No such luck. Project congestion marked by capacity constraints and resultant delays and cost pressures has forced a more orderly sequencing of projects. High-quality projects have stayed at the front of the queue with delays, while the rest have seen significant delays or, worse, been shelved……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

En route to Cape Town - As we prepare for this year’s Mining Indaba in Cape Town in South Africa (tough destination but someone’s got to go!) in a country which for years dominated global gold production but which is now rapidly slipping down the list of the world’s producers, it’s a good time to take stock of the gold market and what’s been happening in it.
This time, rather than putting forth my own views I’m drawing on Jeff Nichols’ latest observations for Rosland Capital in the U.S……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

It feels as if it’s been quite some time since gold (GLD) was a sure-fire winner. Since putting in its 2012 high at $1,800 in the first quarter, gold has thus far been unable to break out above that resistance after three attempts — even with the aid of QE3 and additional treasury purchases.
Long gone are the days when even a hint at further easing on behalf of a major central bank sent the metal soaring a few percentage points……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

JPMorgan predicts Gold At $1,800 by mid 2013 As South Africa “In Crisis” And “Escalating Instability” In Middle East. J.P. Morgan Chase & Co. stated gold would rise to $1,800 an ounce by the middle of 2013, with the mining industry in South Africa “in crisis,” based on reports. South Africa, once the largest gold producer confronts industrial unrest, high wage inflation and also adverse regulatory changes for local mines, Allan Cooke, an analyst in the bank, stated in a report dated recently.
Gold will get an increase in price from prospects of more stimulus from the U.S., Japan and Europe, the potential for escalating uncertainty in the Middle East as well as low interest rates, based on the report. (Press Release)

Posted on 04 February 2013 by VRS |  Email |Print

A Boom in Silver and Gold Predicted: An Excellent Play in a High-Probability Area. Equity Management Academy analyst Steve Roy has been analyzing silver, gold and precious metals and he predicts a “hyperbolic” move in the precious metals.
On a recent interview, Mr. Roy found that in analyzing monthly moving averages and long-term Elliot and Fibonacci waves, April 29, 2011 marked a top of a third wave in the silver market. Since then, silver has been in a correcting fourth wave……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

The U.S. Mint resumed sales after a week of suspension as silver coins sales for January almost doubled compared with the month before. An all-time high of over 7.4 million Silver Eagle coins were bought in January from the U.S. Mint, which substantially exceeded the former record set in early 2011. Gold coin sales were also the highest seen in almost three years.
All of this excitement in the coin market is happening against the backdrop of currency wars, debt ceiling debates, and some of the most blatant price controls implemented in years……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

The refined nickel market is heading for surplus again in 2013. Price-sensitive Nickel Pig Iron is the market’s swing supply and makes up most of the top quartile of the global industry cost curve, so will likely be the deciding factor of where prices will need to trade to trigger supply rationing. With LME prices currently trading at the upper end of the cost curve, Barlcays favour shorting nickel.
The rapid growth in lower-cost, higher-quality supply from RKEF(Rotary Kiln-Electric Furnace) means the NPI sector is now the main supplier of nickel to the stainless market……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

Established mutual-fund companies seeking to add exchange-traded funds to their lineups have a challenge: They need to find a cost-effective way to launch the products in a market where Vanguard Group has one potential design locked up.
More than a decade ago, Vanguard pioneered the idea of offering ETFs as a separate share class of existing mutual funds to create economies of scale and keep costs low. The Malvern, Pa., firm later secured a patent on the structure and so far has kept a monopoly on it……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

Rich Asian families did not make major changes to their portfolios following the 2008 crisis, but one thing they are doing is dialling down their exposure to hedge funds, said family office executives during a recent discussion hosted by AsianInvestor.
This will be worrying for hedge fund managers, since wealthy individuals have traditionally formed a substantial part of their client base……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

The global cotton market is showing a confusing trend as the usual volatility was absent during the first five months of 2012/13 season but suddenly spiked in mid-January, according to International Cotton Advisory Committee.
The Cotlook A Index rose to the highest levels in the current season on January 31, 2013 at 90.35 cents per pound, ICAC observed. In 2012/13, global cotton production is estimated down by 5%, while cotton mill use is expected to rise by 2%. However, production at 25.9 million ton remains much larger than consumption at 23.3 million tons……………………………………..Full Article: Source

Posted on 04 February 2013 by VRS |  Email |Print

Europe’s carbon price has dipped - again. It currently costs major polluters in the European Union around €3.30 to emit a tonne of carbon dioxide - about the same price as an energy saving light bulb. This means that emitters are currently releasing greenhouse gases that contribute to climate change at very little cost.
The latest dip comes at the end of a bad month for the carbon price - which dropped below €5 for the first time last week. And there was more bad news last night: Deutsche Bank has stopped trading in the EU Emissions Trading Scheme (EU ETS) - further damaging the market’s image. We look at what recent events mean for the future of the troubled scheme……………………………………..Full Article: Source

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