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Commodities Briefing 25.Mar 2013

Posted on 25 March 2013 by VRS |  Email |Print

Hedge funds and other big speculators have taken their bullish bets on U.S. commodities back to a one-month high from a more than a one-year low, data showed on Friday, as they bought gold this week on fears of financial meltdown in Cyprus.
Reuters calculations of data from the Commodity Futures Trading Comission showed money managers, made up of hedge funds and other speculators, holding a net-long position of $65.2 billion across 22 commodities for the week to March 19………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

Many global commodity markets fell this week as traders worried that the Cyprus situation would reignite the eurozone’s sovereign debt crisis and dent global demand for raw materials. However, precious metal gold won ground as many investors sought a safe place to park their cash.
“Gold prices have firmed as events in Cyprus have unfolded this week, but the base metals complex and oil prices have come under pressure,” said Barclays analyst Suki Cooper. “A recovery in investor risk appetite is passing commodities markets by. The growth outlook is still not strong enough to support the kind of broad-based pick-up already seen in many other asset classes.”……………………………………….Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

China’s state-owned oil companies reported falling net profits last year due to the economic slowdown and state-controlled fuel prices, even as they are set to continue their rapid expansion overseas.
Sinopec, China’s largest refining company, reported on Sunday that net profits for 2012 fell 12.8 per cent from the previous year to Rmb63.9bn ($10.3bn), due to price controls for refined fuels and losses in the petrochemical sector. PetroChina, a subsidiary of CNPC, reported net profit down 13.3 per cent last year, while Cnooc, China’s largest offshore oil producers, saw net profit fall 9.3 per cent………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

There are two main factors that drive oil prices - fundamentals and geopolitical risks. Looking purely at the fundamentals, oil markets are likely to be over-supplied in the near term. Much of this is due to the increases in North American oil production, which is expected to rise by around 800,000 barrles per day (bpd) this year. Despite their recent problems, African supply is expected to rise by at least 100,000 bpd by May, a significant part of that increase coming from Angola and South Sudan.
In the North Sea, where output has dropped significantly in recent years, loadings are expected to recover somewhat in the coming weeks, thanks to increase in oil production and deferrals from previous months………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

High oil and gas prices have unleashed the biggest drilling boom in 30 years. Opec members must prepare for a big increase in oil supplies in the second half of the decade, as well as heightened competition from natural gas in some of their core markets, and a further erosion in demand as conservation and efficiency measures bite harder.
Outside North America, the number of rigs actually drilling for oil and gas averaged 1,277 in January and February, the highest since 1983, and more than double the number operating in 1999, according to rig counts published by oil field services company Baker Hughes International on its website………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

London’s gold and silver markets face the possibility of a probe into price setting, putting a century-old practice under the spotlight after the Libor rigging scandal that exposed widespread interest rate manipulation by banks.
The US Commodity Futures Trading Commission (CFTC) has started internal discussions on whether the daily setting of gold and silver prices is open to manipulation, the Wall Street Journal reported. The CFTC declined to comment, while the chairs of the London Gold Fixing Company and London Silver Fixing Company were not available for comment………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

HSBC cut its gold forecast for this year and next on Monday after the metal’s weak start to the year, but said ultra-loose monetary policy in the United States and elsewhere meant it remains positive on prices overall. The bank lowered its 2013 gold price forecast to $1,700 per ounce from $1,760 and the 2014 price outlook to $1,720 per ounce from $1,775. It sees the metal trading between $1,525 and $1,825 an ounce this year.
Gold prices are down 4 percent in the year to date, primarily due to investor expectations the Federal Reserve would curb its US quantitative easing (QE) programme, and have fallen for the last five months straight……………………………………….Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

Dubai’s gold trade is estimated to have exceeded $70 billion in 2012, hitting record highs as more of the precious metal is exchanged and stored in the emirate. Official figures show the gold trade was worth around $56 billion in 2011, and the figure for last year is estimated to be at least 25 percent higher.
Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre (DMCC), attributed the rise to greater confidence in the market and the trading infrastructure in the emirate………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

Despite a small uptick last week due to Cyprus jitters, the price of gold has been heading south in fits and starts since hitting a record near $1,900 (U.S.) an ounce back in September, 2011. Gold-mining shares have been just about the worst investment on the stock market, with the TSX global gold index losing about a third of its value over the past two years.
Being a gold bug has clearly become a painful investment thesis and investors are responding accordingly by yanking money from the sector………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

Gold bounced off $1,560 a target that it had held for the last year and more. It consolidated at $1,580 and has now tackled $1,600.The bounce was off the long-term trend line. While resistance in the higher $1,600 area could be formidable a look at the reasons why it fell through support at $1,650 is worthwhile.
Recent Fundamentals: The prime cause of the gold price falling so much in the last few months, has been the over 100 tonnes of sales from the SPDR gold Exchange Traded Fund, an amount that triggered a considerable amount of stop loss selling………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

What? Silver prices remained basically unchanged from last week, however they could not stay above US$ 29, Silver has been trading in a range of between $28.50 and $29.30.
Why? Because of the financial crises in Cyprus, there was a sell-off of all the industrial metals during the first couple of days of the week. Silver, which has been taking its clues from the industrial white precious metals group for the last couple of weeks, was hit by the sell off. However it was able recoup some of its losses………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

Has the silver market been pricing in the coming collapse? In a word, no! Markets dominated by the impulses of real people largely no longer exist. The machines have taken over, as bots read the news and respond rapidly with large transactions.
No matter how volatile world markets will get, remember that there will be more Cyprus-type events, more Quantitative Easing programs, more denials of the importance of inflation, more threats from Central Banks to remove liquidity, more mining sector failures and more bubble callers designed to influence mainstream investor opinion………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

Hedge funds are making the biggest bet against copper on record as global inventories expand to a nine-year high, while concern that Europe’s debt crisis will spread spurred the biggest gain in gold bets since 2008.
Speculators raised net-short positions in U.S. copper futures and options by 53 percent to 25,719 contracts in the week ended March 19, according to Commodity Futures Trading Commission data that begins in 2006. A jump in bullish bets on corn, gold and natural gas boosted overall holdings across 18 raw materials for a second consecutive week………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

London Metal Exchange (LME) Aluminium spot prices would go higher in the second half of 2013, averaging $2,050/t versus $1,925/t in the first half, according to a market analysis by London based Barclays. For short term, it could trigger some short covering in the metal, particularly if macro sentiments improve in line with developments in Europe.
Barclays has already expected the approaching maturity of the backwardation pockets in the LME curve to drive such activity, given the uncertainties regarding the underlying dynamics; hence, given some incremental tightening in fundamental expectations, the near-term risks of short covering are certainly escalating………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

IntercontinentalExchange Inc will consider cutting trading hours for soft commodities in a bid to improve liquidity, president and chief operating officer of ICE Futures U.S. Ben Jackson said on Friday.
The Atlanta-based exchange will put forward a proposal to reduce hours in sugar, coffee and cocoa contracts listed on Liffe in London and ICE Futures U.S. in New York once it has completed its $8 billion acquisition of NYSE Euronext, he told delegates at the National Coffee Association USA conference………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

US dollar: The dollar will be somewhat stronger over the next six months, though the currencies that it appreciates against the most may change depending on market developments.
If US economic data continues to improve, the idea that the Federal Reserve may begin tightening its monetary policy will continue to gain steam, and this will see the dollar strengthen relative to those currencies where central banks are [keeping interest rates low]………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

Asia came to currency early, and it soon learnt to treat coinage as a weapon of war. Indeed, the coins minted in China during the warring states era, almost 500 years before Christ, were made in the shape of knives.
This may explain why the west tends to be terrified by Asian currency policy. China has long been branded a currency manipulator. Japan’s aggressive new attempt to stimulate its economy with monetary policy under prime minister Shinzo Abe has led other countries to complain that the yen is deliberately being devalued………………………………………..Full Article: Source

Posted on 25 March 2013 by VRS |  Email |Print

China may sustain its recent economic recovery in the second quarter of 2013, states a recent market analysis by London based Barclays which is good news for base metal prices.
Fabricators and traders predominantly observed demand conditions picking up, matched by an increase in physical buying. In particular, demand for copper wire, cable, rod and foil has picked, and commensurate with that, semi fabricator utilisation rates have picked up………………………………………..Full Article: Source

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