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Commodities Briefing 08.Feb 2013

Posted on 08 February 2013 by VRS |  Email |Print

As the stock market nears all-time highs, a lot of investors are starting to look around for ways to diversify their portfolios in case the stock market reverses. One asset class that has become increasingly popular for diversification is commodities.
Though investing in commodities used to require using futures and trading on margin, with the introduction of new commodity-based exchange-traded funds and exchange-traded notes, buying and holding commodities has never been easier. The question is … does buying commodities to add a layer of diversification and protection to your portfolio actually work?……………………………………….Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Commodities have just hit a 10-year high for the month of February. Even the massive commodities boom that ran through 2007 and 2008 didn’t top the levels we’re seeing right now. The benchmark for this high is the Standard & Poor’s GSCI Commodity Index, which includes everything from oil and lead to cocoa and lean hogs.
And not only has the index set a new February high, it’s poised to rise over the next two months, based on the traditional seasonality of its underlying commodities………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Top U.S. banks face a decline in Commodities, as revenue fell by a third in the fourth quarter as hard regulation restricted activity among less shining markets and inactive demand for hedging, consultancy Tricumen said.
Banks do not break out commodities revenue when recording results, but the British consultancy projected that the number for U.S. banks in the last three months of 2012 moved down 32 percent year on year, at between $800 million and $900 million………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Gulf members of the Organization of the Petroleum Exporting Countries, including top oil exporter Saudi Arabia, aren’t inclined to increase their production–even though oil prices have soared well above the $100-a-barrel price the group sees as ideal, Gulf OPEC officials said.
Brent crude prices Thursday rose slightly compared to the previous session, but earlier in the day rose to $117.83 a barrel, their highest level in more than four months. Prices for contracts on both sides of the Atlantic have rallied since the new year began, though the rise has been most pronounced in Brent………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will keep shipments stable this month as winter demand in the northern hemisphere fades and refiners begin maintenance, according to tanker tracker Oil Movements.
The group that supplies about 40 percent of the world’s oil will export 23.68 million barrels a day in the four weeks to Feb. 23, little changed from 23.67 million in the previous period, the researcher said today in an e-mailed report. Those figures exclude Angola and Ecuador………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

The EU would do well to emulate the US’s obstinacy and require reporting of payments in all countries with no exceptions. As a former oil company executive, having spent 30 years with Royal Dutch Shell, I am concerned at my former industry’s efforts to undermine a key European transparency law which is close to agreement.
New European legislation, which is being agreed through the EU Accounting and Transparency Directives, will require oil, gas, mining and logging companies to disclose their payments to host governments around the world………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Writing in the Financial Times, IEA executive director Marina van der Hoeven says that if President Obama refuses to raise restrictions on exporting crude and liquid natural gas, the country’s unprecedented oil boom will dry up.
Here’s the situation: technically, American companies are not allowed to export those products, as a result of a Carter-era executive order restricting trade of commodities in “short supply” that’s still on the books. This wasn’t really a problem until recently, as American oil and gas production has gone nuts………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

What do you think is the best investment this year? MPO Research Group asked respondents to predict which investments will yield the best returns in 2013 and found that opinion is divided. Gold and commodities earn the most support as the best investment this year: 27.8% of respondents choose this option.
Cash is also popular, selected as the best investment by 23.4% of respondents. Real estate is preferred by 21.3% of respondents and stocks by 20.2%. Bonds are the least popular investment, preferred by only 7.3% of respondents. Expectations for gold and commodities show an inverse relationship with expectations for one’s personal financial future. 51.9% of those who expect a significant decline in their personal finances expect that gold and commodities will be a good investment this year. (Press Release)

Posted on 08 February 2013 by VRS |  Email |Print

A so-called volatility squeeze in gold prices may signal a rally to $1,900 an ounce for the first time in more than 16 months, according to technical analysis by Steel Vine Investments LLC.
Gold futures for April delivery have traded in a $200 range on the Comex in New York since July 25, leading to a contracting-triangle pattern of lower highs and higher lows that may mean the precious metal will rebound, said Spencer Patton, Vine’s chief investment officer………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

The gold price eased $5 per ounce from a two-day high in London trade Thursday morning, holding above $1,676 as Asian stock markets closed lower but Europe held flat. The Euro currency held onto a half-cent rise as the European Central Bank kept its key lending rate at a record low of 0.75% for the 15th month in a row.
Crude oil rose with other commodities, but silver bullion remained unchanged for the week so far at $31.80 per ounce………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

China maintained it’s position as the world’s largest producer of gold for the sixth consecutive year. Gold output of China increased 11. 66% and reached a record high of 403.05 tons in 2012, said China Gold Association.
But China still remains the second largest consumer of the yellow metal after India. Of the total output, 82.71% for the year is from the country’s main ten gold producing regions including provinces of Shandong, Henan, Jiangxi………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Anyone who looks at precious metals when investing in 2013 will likely turn to gold and silver, maybe even platinum. But there is another precious metal that is often overlooked, and should not be: palladium.
Palladium is mainly used in catalytic converters on gasoline-powered vehicles to limit the pollution these vehicles emit, just as its sister metal, platinum, is used in a similar fashion for diesel-powered vehicles………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Australia’s rate of economic growth is expected to ease slightly in 2013 as mining investment slows, the central bank says. The Reserve Bank of Australia on Friday downwardly revised its forecasts for gross domestic product (GDP) growth to between two to three per cent in 2013, from its previous forecast of 2.25 to 3.25 per cent.
It expects GDP growth through to the end of 2012 to be 3.5 per cent, which is in line with its November forecast. December quarter GDP figures from the Australian Bureau of Statistics are released on March 6………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

India’s high gold imports are hurting the country’s current account deficit. The government’s import restrictions are hurting the populace. The only organisation not worried, as of now, are gold backed exchange traded funds.
Worried investors are veering towards the country’s 14 gold exchange traded funds (ETFs), which together have garnered 40,000 kilo of the precious metal. The ETFs allow investors to trade in the metal in a non physical form and electronically on stock exchanges. Gold ETFs debuted in India about six years ago………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Assets invested globally in Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) broke through the $2 trillion milestone at the end of January 2013 to reach a new all-time high of $2.05 trillion. ETF and ETP assets have increased by 5.2% from $1.95 trillion to $2.05 trillion during January, according to figures from ETFGI’s monthly Global ETF and ETP industry insights.
Market performance contributed to the increase in the value of assets held in ETFs and ETPs as 18 of the top 20 markets globally showed gains in January. Two of the markets with strong gains were the U.S. and the UK where history has shown that a strong January tends to be a good predictor for the rest of the year. A review of history in both markets shows that strong January performance is typically followed by positive returns in the subsequent 11 months………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

In futures-based commodities investing, picking the right ETP is harder than it looks. A lot of exchange-traded products try to beat the market, but it’s only in commodities that the more active products are often more popular than their plain-vanilla counterparts.
The most popular basket commodities fund, the PowerShares DB Commodity Index Tracking Fund (DBC), has over $7 billion in assets under management — more than three times the assets of the iPath Dow Jones-UBS Commodity Total Return ETN (DJP) and nearly six times the assets of the iShares S&P GSCI Commodity-Indexed Trust (GSG)………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

International Securities Exchange (ISE) and IndexIQ have announced a broad partnership to develop and launch a range of exchange-traded products (ETPs) linked to physical commodities. While ISE is perhaps best known as a US options exchange, the company has an established index business and has recently manoeuvred itself deeper into the fast-growing ETP industry.
Last month, the exchange operator announced that its beefed-up product development group would henceforth be known as ISE ETF Ventures, reflecting the group’s evolving focus and expanded capabilities in the ETF area………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

The Forward Markets Commission (FMC) has summoned executives of three commodity exchanges to explain the fall in their net worth to levels below the statutory requirement of Rs 100 crore.
Next week, FMC would meet executives from Reliance Group-controlled Indian Commodity Exchange (ICEX), Kotak Group-anchored Ace Derivatives & Commodity Exchange (Ace) and Ahmedabad-based National Multi Commodity Exchange (NMCE). It is likely the exchanges would seek time to meet the mandatory net worth criterion………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Jim Rogers, who co-founded the Quantum Fund with George Soros in the 1970s, is exploring the world for investments in water technology. “There will be wars east of the Red Sea over oil and wars west of the Red Sea over water,” Rogers, 70, said in an interview yesterday before giving a speech to the CFA Society of Atlanta.
Rogers, who is chairman of Rogers Holdings in Singapore where he lives with his wife and two young daughters, said he isn’t interested in owning lakes, reservoirs or other sources of water that could be confiscated by governments in times of turmoil. He said he’s looking for technologies that can help free countries from dependency on outside water sources. One stock he holds is Singapore-based HyFlux Ltd, which makes and installs water purification, treatment and recycling systems………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Poland’s zloty is expected to lead Central European currencies higher in the next 12 months on the back of an expected economic recovery in the European Union’s emerging markets.
The median forecast in a poll of 30 analysts, conducted on Feb 4-6, sees the zloty gaining 4.8 percent against the euro from Wednesday’s close in the next 12 months, to 3.99………………………………………..Full Article: Source

Posted on 08 February 2013 by VRS |  Email |Print

Value of the European emissions trading scheme and UN CDM fell 35% in 2012, Point Carbon analysts warn. “Dramatic”, “enduring”, “meltdown” – the words used by leading analyst firm Thomson Reuters Point Carbon to describe the continued slump in global carbon prices could not be starker. And according to analysts the chances of prices recovering in the near future remain extremely thin.
The company today released data for 2012 showing that, while the volume of carbon traded globally rose 28 per cent to 10.7Gt, the value of the market fell 35 per cent to €62bn as the price of allowances in the EU Emissions Trading Scheme (ETS) and UN Clean Development Mechanism (CDM) collapsed………………………………………..Full Article: Source

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