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Commodities Briefing 14.Feb 2013

Posted on 14 February 2013 by VRS |  Email |Print

While gold prices set to hit USD2,000/oz, the producers of the metal remain cheap. Should investors consider exposure to the commodity or to its miners? Gold prices are predicted to hit $2,000/oz this year from current levels of around USD1,670/oz as a number of factors combine to support the yellow metal.
Despite this - and the fact that gold prices have been elevated against historical norms over the course of the crisis - gold producers themselves remain cheap. Why is this and should investors consider exposure to the commodity or its miners?……………………………………….Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Commodities can have a great role in your portfolio, however, they don’t seem to be providing a lot of downside protection for the stock component of your portfolio.
As I show you in the chart in the video of the movement of the S&P 500 versus the Deutsche Bank Commodity Tracking Index, you can see that when stocks have been moving lower, commodities have also been moving lower. When stocks have been moving higher, commodities have also been moving higher. This is a positive correlation between these two asset groups………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Global demand for oil will grow more than previously expected, the Organization of the Petroleum Exporting Countries said in its monthly report released on Tuesday. OPEC raised its 2013 forecast for the growth in total world oil demand to 840,000 barrels per day from its previous estimate of 760,000 barrels per day, citing signs of economic recovery and colder weather, with the majority of growth coming from China.
The group further said that it expected demand for its own crude to fall by 300,000 barrels a day in 2013 compared to last year………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Shale oil production could boost the world economy by up to $2.7tn (£1.7tn) by 2035, according to a report. The extra supply could reach up to 12% of global oil production, or 14 million barrels a day, and push global oil prices down by up to 40%, PricewaterhouseCoopers said.
Shale oil and gas have emerged as a viable way to boost energy supplies. However, there are concerns over the process by which the gas is extracted, known as fracking………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

With global GDP growth set to accelerate in 2H2013 and limited supplies, there is a growing risk of Brent prices spiking to $130/bbl this year, said Bank of America Merrill Lynch in a report.
The developed world has seen a surge in fuel-efficiency in transportation. As baby boomers exit the “prime driver” age band (15-65), oil demand will decline further. “But global population in the prime driving age band continues to grow strongly due to emerging markets.” the report noted………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

The terrorist attack on an Algerian gas plant last month has clouded the outlook for oil supply from Africa, the industrialised countries’ energy watchdog has said.
The attack on the In Amenas gas plant, which claimed the lives of at least 37 foreign workers in January, has cut Algerian production of liquids by some 57,000 barrels a day and gas by 9 bcm/year, according to the International Energy Agency………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

The International Energy Agency trimmed forecasts for global oil demand this year for the first time in three months as constrained economic growth undermines fuel consumption.
The adviser reduced estimates by 90,000 barrels a day following a weaker outlook from the International Monetary Fund, and predicted that world oil demand will increase by 840,000 a day in 2013, or 0.9 percent, to 90.7 million. OPEC output fell to its lowest in a year, limiting the relief for prices from an increase in spare production capacity, the IEA said. Brent crude rose to the highest in nine months Feb. 8………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Iranian oil output will likely fall further from its lowest in three decades as the West tightens sanctions on the Islamic Republic, depriving Tehran of hard currency revenues, the International Energy Agency (IEA) said on Wednesday.
The IEA, the West’s energy agency, said in its monthly report that preliminary data suggested Iran’s exports could have fallen below 1 million barrels per day (bpd) in January due to lower Chinese and South Korean purchases after a rebound in December to 1.56 million bpd………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Oil futures rose then turned lower Wednesday after the U.S. Energy Information Administration reported a smaller-than-expected rise in last week’s crude inventories. Crude supplies climbed by 600,000 barrels for the week ended Feb. 8. Analysts polled by Platts expected a 2.5-million-barrel climb.
Motor gasoline supplies fell 800,000 barrels, while distillate stockpiles declined by 3.7 million barrels, the EIA report said. Analysts expected gasoline stocks to be unchanged, and forecast a fall of 1.6 million barrels in distillate supplies………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

One-hundred percent green energy for the European Union is realistic by the middle of the century provided the bloc signs up to ambitious energy policy goals for 2030, conservation body WWF said in a report on Thursday.
Debate has begun in Brussels on targets for 2030 to replace the existing set of 2020 goals, which are to cut carbon emissions by 20 percent from 1990 levels, improve energy savings by 20 percent compared with projected use, and increase the share of renewables in the energy mix to 20 percent………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Muted volatility, sluggish trading activity and regulatory changes have conspired to create a tough environment for energy market participants over the past year. That has fuelled a lot of movement in this year’s Risk and Energy Risk Commodity Rankings, with some banks seeing their fortunes fall significantly.
Many investment banks in the energy derivatives market are likely to look on the past year as something of an annus horribilis. Continuing sluggishness in the global economy and low volatility in energy markets generated lacklustre trading opportunities, while a wave of new regulation affecting banking, derivatives and energy markets is also making life difficult for market participants………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Regardless of what is often said and published, gold is never a good investment. It is, sometimes, a good speculation; but it is never a good investment. The price of gold is a feather suspended in the air whose level changes in concert with associated speculative winds.
“So”, you may say, “what is the significance of this?” The significance is twofold. (1) Gold is not a good candidate for the typical investor’s retirement portfolio. (2) Buying and holding gold is best left to those who are expert in the intricacies surrounding the commodity. There is a certain percentage of the typical investor’s retirement portfolio that should be committed to gold; but this percentage is zero. There are three basic underlying reasons why this is the case………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Major bullion bank HSBC on Wednesday raised its forecasts for 2013 and 2014 silver prices, citing growing industrial demand and investor appetite for the metal.
The silver price is likely to move higher in 2013 due to higher industrial demand, steady investor appetite for hard assets, strong coin and bar purchases and a bottoming out of jewelry demand, HSBC analyst James Steel said in a note………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

A lot of talk on the web right now says silver is significantly undervalued vs. gold. Many of these pundits and talking heads like to point to the historical relationship between gold and silver prices, sometimes known as the “ratio.” People even comment as to this connection as far back as thousands of years ago. Let’s take a quick look at this.
Silver, thousands of years ago, was originally thought of greater value than gold, both because it was relatively scarce in great civilizations such as the Egyptians, and because it was easier to work into useful materials. Both silver and gold have been used abundantly for ornamentation and as a thing of beauty in homes, temples and palaces. Then of course as jewelry their beauty was very much esteemed………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Over the last month, I’ve shown you how China’s economy has seen a resurgence in commodities imports like copper, iron ore, uranium, and coal. China is the largest importer of industrial commodities in the world… So when its demand picks up, it’s bullish for the sector.
Platinum is a “dual purpose” metal. It’s used in jewelry… and it’s considered a “store of wealth,” so it serves as a precious metal like gold. But it’s also an industrial metal. It is used to make catalytic converters – which reduce a vehicle’s pollutants – and as a catalyst for refining gasoline and diesel fuel. Those two sectors account for 57% of the platinum produced per year. And demand is soaring………………………………………….Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

ETF Securities, one of the world’s leading, independent providers of Exchange Traded Commodities (ETCs) has conducted a survey which suggests that senior investment professionals across Europe are planning to increase their average allocation to commodities in 2013, particularly into industrial metals such as copper.
The results were compiled from four surveys completed by 350 investment decision makers attending the ETF Securities annual commodity investor conferences across London, Milan, Frankfurt and Zurich. In the survey, attendees were asked what their allocation to commodities was in 2012 and how they see that changing this year. Across Europe, the results show that over 40% of investors plan to allocate between 8-10% of their portfolios to commodities in the year ahead………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

European investors plan to increase their allocation to commodities this year, ETF Securities Ltd. said, citing surveys of 350 investment managers.
More than 40 percent of investors plan to allocate 8 percent to 10 percent of their assets to commodities this year, ETF Securities said today in an e-mailed statement. Investors in the U.K., Italy and Germany favor industrial metals, particularly copper, it said………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Threadneedle Investments has launched the Columbia Threadneedle SICAV-SIF Absolute Commodities Fund, which aims to deliver a 10-15% return on an annualised basis, net of fees, over a long term investment horizon.
The non-Ucits fund is being launched in response to client appetite for an actively managed absolute return product, the firm said. Columbia is the US-based fellow asset management subsidiary of Ameriprise………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

India’s merchandise exports rose for the first time in nine months in January ‘13 following a recovery in engineering and gems and jewellery shipments. A look at the top 10 exported commodities from India during 2010-11.
Mineral fuels, mineral oils and products of their distillation including products like coal and oil accounted for 16.92% of the total percentage share of India’s exports of top ten commodities during 2010-11……………………………………….Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Jim Rogers does not want you to get the wrong idea. He thinks Ben Bernanke is doing a really, really, really bad job as Federal Reserve Chairman. In his most recent book, Street Smarts, Rogers says that if you are to look back at Bernanke’s predictions over the past few years, you can only come to one conclusion: The Fed Chairman is always wrong. Here’s the money, no pun intended, quote:
“He knows little about economics or finance, he has no idea how markets work, and the only thing he truly understands about currency is how to print it.”……………………………………….Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Currency trading was volatile on Wednesday as concerns about currency wars and the fallout from mixed messages from the G7 put added focus on a meeting of world leaders in Moscow later in the week.
The euro turned lower against the dollar and Japanese yen. The euro had earlier traded higher against the yen after Russian Deputy Finance Minister Sergei Storchak said the yen had definitely been over-valued and that “there are no signs” Japan’s monetary authorities were intervening………………………………………..Full Article: Source

Posted on 14 February 2013 by VRS |  Email |Print

Greenhouse-gas emissions from flights within Europe will probably fall this year as airlines renew fleets with fuel-efficient aircraft and pack planes more tightly, according to Bloomberg New Energy Finance.
Airlines’ carbon dioxide emissions within the European Union probably fell 2 million metric tons, or 3 percent, last year to 64 million tons, Itamar Orlandi, a New Energy analyst in London, said by e-mail. Emissions may decline another 1 million tons this year as high oil prices curb demand, he said………………………………………..Full Article: Source

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