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Commodities Briefing 09.Apr 2013

Posted on 09 April 2013 by VRS |  Email |Print

Commodity futures turnover in India fell for the first time since inception in the fiscal year ended March 31, led by a decline in volume in bullion trade, and suspension of guar futures.
India, the world’s biggest buyer of gold, and second biggest producer of wheat, allowed futures trading in 2003 for local participants, and foreigners, who cannot trade in the space, can participate through stakes in commodity exchanges………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Hedge funds reduced bets on a commodity rally by the most since 2008 as rising supplies of everything from copper to sugar and slowing U.S. growth drove prices to the biggest slump in six months.
Speculators cut net-long positions across 18 U.S. futures and options by 31 percent to 468,780 contracts in the week ended April 2, the most since October 2008, U.S. Commodity Futures Trading Commission data show. Investors are betting on a decline in silver for the first time and have record bearish positions in copper and sugar. Corn wagers dropped the most since June 2010, leading the biggest ever decline in agricultural holdings………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Recently, I explained how high oil prices can bring on financial collapse for oil importers. In this post, I’ll discuss the flip side of the situation: how oil exporters reach financial collapse.
Unfortunately, we have many examples of countries that were oil exporters, but are dealing with collapse situations. Egypt, Syria, and Yemen all have had political disruptions since 2011. These may not be called financial collapse, but they all took place as the country’s oil exports decreased and as the price of imported food rose. Another example is the Former Soviet Union (FSU). It collapsed in 1991, after a period of low oil prices, in what looks very much like a financial collapse………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Brent crude rose towards $105 per barrel on Monday as plans to stimulate Japan’s economy lifted financial markets, but the oil benchmark remained near an eight-month low on worries over global economic growth and fuel demand.
The Bank of Japan (BoJ) has promised to inject $1.4 trillion into the economy in less than two years and economists expect the huge monetary stimulus to support assets such as oil and other commodities………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Gold prices have remained in the doldrums in recent months, putting in their worst quarterly performance in more than 10 years during January-March and conceding 5.3% since the start of the year. The metal plumbed as low as $1,540 per ounce late last week — its cheapest since May 2011 — before recovering ground to $1,570 recently.
However, I am convinced that current prices provide a sound base from which investors can build excellent returns. I believe that a backdrop of escalating macroeconomic and political uncertainty, particularly in Europe and the US, combined with rising inflation should push the store-of-value asset higher in coming months………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

The value of gold traded through Dubai reached $ 70 billion in 2012 from just $ 6 billion in 2003 and Dubai has risen as a major global gold and precious metals trading destination, said Ahmed bin Sulayem, executive chairman of Dubai Multi Commodities Center (DMCC).
“About 20 percent of the world’s physical gold imported and exported through Dubai,” he said. Bin Sulayem was addressing the Dubai Precious Metals Conference 2013 hosted by the DMCC. “Demand is still strong, whereas most new firms flock in from the emerging markets in Africa, India and China. We expect to host over 10,000 registered firms by 2015,” said Bin Sulayem……………………………………….Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

The slide in precious metal prices has done much to undermine investor confidence, yet the indications are that demand for the physical metals remains strong. This leads many observers to comment that paper gold and silver and not bullion are driving prices. The current sell off is a combination of long paper positions capitulating, new short positions being opened by trend-chasers, and importantly, bullion banks squaring their books.
A better way to differentiate between futures and forward markets and physical demand is to regard the former two as used by speculating investors and the latter by buyers seeking financial protection from systemic risk. In the middle there are those who buy futures to take delivery, but they are a minority………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

For the second week in a row, speculators shed bullish gold and silver futures and options contracts traded on the Comex division of the New York Mercantile Exchange, according to U.S. government data, with funds turning net-short silver in one of the reports.
For the week ended April 2, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report chopped the net-long position in gold, returning to levels seen in early March. That essentially wiped out most of the newly established bullish positions built during late March………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Gold prices are expected to trade in range with some support expected from the physical market amidst worries about accelerating outflows from exchange traded funds in April, Barclays Research said. Price forecast: Q2 2013: $1615/oz, 2013 annual average: $1647/oz.
Gold market sidelined the comments by ECB President Draghi on Cyprus and possibility of moderate rebound in H2 13 although weaker-than expected jobs data provided some support last week………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Palladium, along with platinum and rhodium, are poised to see big gains by the end of next year, as production for the platinum-group metals continues to drop, according to Capital Economics.
“Falling production due to cost-related closures and potential labor unrest means that the prices of platinum and palladium could still rise by around a fifth by the end of 2014, and rhodium by as much as two-thirds,” said Ross Strachan, commodities economist at Capital Economics………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

US palladium bar saw the biggest price decline of the day, dropping 3.5 percent on April 5, 2013. The price of Japanese palladium bar was essentially unchanged. Chinese palladium bar saw little change in its price last Friday.
The price of Japanese platinum bar rose 0.9 percent after a two-day drop. US platinum bar finished the day down 0.8 percent. The price of Chinese platinum bar remained essentially flat………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

With 54% of the world’s platinum production, 78% of diamond and 20% of gold output, why should Africa look elsewhere for growth? Reams upon reams of studies tend to focus on the continent’s “resource course”, and the folly of depending on a few commodities, with analysts fretting on the resource sector’s inability to raise the standards of living of the wider population.
But the opposite is happening in Africa, and one report seems to suggest Sub-Saharan African should embrace its natural riches and use it as a weapon to fight poverty, unemployment and general economic lethargy………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Hedge funds were again positive in March, and +3.8% in Q1, with nearly 80% of the industry in positive territory for the year. March performance was representative of the trends throughout the first quarter, namely equities exposure led, credit and volatility strategies were positive, but below their 2012 pace, and FX and commodity funds were a drag on the industry’s returns, according to new data from eVestment.
Areas producing the best returns in March and Q1 were directional equity strategies, particularly funds targeting Japan and the country’s loose monetary policy fueled equity market rise. They are off to their best start on record. Emerging markets had a difficult month in March and have fallen after their strong start to 2013. India focused funds have given back over half of 2012’s gains………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Investors in commodity exchange traded products (ETPs) unwound their holdings to jump on the equity market rally in March, resulting in total redemptions of US$3.2 billion globally, according to BlackRock data. Gold suffered an investor exodus for a third consecutive month, bringing first-quarter ETP outflows to US$9.2 billion, but white metals - silver, platinum and palladium - escaped the sell-off, BlackRock, the world’s largest asset manager, said.
Riskier, growth-related commodities such as industrial metals and energy also did poorly in March, as the Cyprus crisis stoked new worries over eurozone debt and economic growth………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

Indian investments in commodity futures fell for the first time during the just-ended fiscal year, as regulatory curbs and stronger returns from equities drove investors away from commodities. The value of commodity futures trade fell 6% to 170.47 trillion rupees ($3.1 trillion) in the year ended March 31, data from market regulator Forward Markets Commission showed.
This is bad news for foreign investors who have bought stakes in local commodity bourses expecting that India would emerge as a thriving center for the derivatives trade, as the country is a leading consumer and producer of commodities………………………………………..Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

A new currency is taking the world by storm and has seen its value surge more than 1000 per cent from about $15 to nearly $170 since the beginning of 2013. Bitcoin is a decentralised, anonymous, digital-only currency that’s lately got a lot of public attention and sparked a trading frenzy.
Not managed like a typical currency, Bitcoin belongs to no particular country, is not minted on plastic, paper or metal and under the control of no central bank. And yet it has reportedly enabled a US citizen to buy Porsche Cayman last month!……………………………………….Full Article: Source

Posted on 09 April 2013 by VRS |  Email |Print

A nationwide Chinese emissions trading scheme is likely to be operational by 2020, but faces considerable challenges ahead of its launch, a World Bank carbon finance expert has told RTCC.
Last week the mayor of Shenzhen economic zone revealed it would be the first of seven pilot projects to come online in June. The remaining six, which include Shanghai and Beijing, are likely to be rolled out through 2013 and 2014, with a view to a final assessment on how they have performed in 2016………………………………………..Full Article: Source

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