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Commodities Briefing 19.Apr 2013

Posted on 19 April 2013 by VRS |  Email |Print

World commodity prices have taken a beating in recent weeks, as middling economic growth in the U.S. and China and Europe’s debt problems are weighing on demand for all manner of raw materials.
The scale of the commodities slump is summed up nicely in this chart courtesy of Bespoke Investment Group, which described the situation with precious metals as an “absolute bloodbath.”…………………………………….Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

The collapse in commodities has not gone unnoticed. Words like depression and deflation are again being talked about and it is possible that the commodity collapse in gold, copper and oil is sending an ominous warning about the direction of the global economy. Even more it may force global central bankers to reassess policy and fight what commodities are saying could be a major global economic contraction or at the worst a deflationary downdraft.
Those concerns were raised by St. Louis Fed President James Bullard, who believes that inflation is dangerously low. While Mr. Bullard says he does not use gold as a barometer of inflation, his comments seem to suggest that he should be……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

It isn’t news to anybody who follows markets that commodities in general and gold in particular have taken a beating in the last week or so. There is no shortage of people telling us that this is the harbinger of a collapse in stock prices. I disagree.
I have felt for a while that we are due, or even overdue, a correction in the stock market, but I can find little historical evidence that a quick decline in the price of gold or commodities in general signals a collapse. Some point to 1980, when that pattern did emerge, but that looks more like an isolated occurrence than a reliable indicator……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

You find me a commodity that’s heading higher and I’ll find you a way to play it. Lately the “finding” has gotten a little harder. Price action across the board in commodities hasn’t given us many uptrending commodities – that is, except for one.
Today I want to discuss a commodity that sidestepped this week’s deluge. Instead of a 10+% haircut like we saw in gold, silver, platinum and oil, this commodity held its own. On the year, it’s up 18%. Today, I’ll share with you my four favorite ways to play it……………………………………….Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

Gold traders are divided on whether bullion will extend declines after the biggest plunge in three decades generated buying from investors and jewelers.
Fifteen analysts surveyed by Bloomberg expect prices to rise next week, 14 were bearish and a further five were neutral. Gold tumbled 13 percent in the two sessions through April 15, the biggest drop in 33 years, on concern European governments would follow Cyprus in selling off reserves, while an unanticipated slowdown in Chinese growth sparked declines across commodities. In the past three days, bullion has rebounded about 2 percent on the Comex in New York……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

Gold may need to fall to as low as $1050 an ounce to bring its valuation versus other commodities such as oil and copper back to historical averages, Deutsche Bank AG said. Gold may have to trade at $1050 or $1500 for this to occur, Michael Lewis, an analyst at Deutsche Bank in London, said in a report.
“In our view, what had been a reliable source of positive returns for the past 12 years has ended,” he said. Gold for immediate delivery was at $1,394.04 an ounce at 11:49 a.m. in London…………………………………….Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

While gold dropped to a two-year low earlier this week, many market commentators continue to believe in the metal’s long-term fundamentals – although some are taking a more cautious approach in the short-term.
Following a significant drop at the end of last week, gold futures for June delivery fell more than 9% on Monday to $1,361.10 an ounce on the Comex division of the New York Mercantile Exchange. Gold did rebound nearly 2% on Tuesday……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

On Friday we witnessed a great plunge in gold (almost $80 – from $1,560.30 to $1,480.50) and silver (almost $1.70 – from $27.58 to $25.89) and we are seeing even lower prices this week. No matter if we take gold from the USD perspective, average non-USD perspective, or gold priced in individual non-USD currencies, we will see that the price has broken below the key support levels.
What about silver? On Friday it moved insignificantly below some support levels (intra-day 2011 and 2012 lows) and at this time silver confirms the bearish outlook for gold. In fact it’s only a few dollars above its 2008 high……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

Indian gold futures edged down, hovering near their lowest level in more than 18 months, weighed by a stronger rupee, giving an opportunity for physical traders to import in the middle of the wedding season.
The actively traded gold contract for June delivery on the Multi Commodity Exchange (MCX) was 52 rupees higher at 25,731 rupees per 10 grams, after hitting a low of 25,333 rupees earlier in the session, still near the level last seen in September 2011……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

If demand for base metals proves promising – owing to their link to infrastructure and urbanisation – countries hosting base metals, particularly copper, will benefit, states minerals consultant Venmyn Deloitte exploration manager Andrew de Klerk, noting that base metals demand may be stronger than precious metal demand in the near term.
His statement backs up fund management firm Hallgarten & Company principal and mining strategist Chris Ecclestone’s media statement in 2012 that base metals are likely to outpace precious metals in 2013……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

Members of the Organization of Petroleum Exporting Countries are discussing holding a special meeting following the recent drops in international oil prices, Venezuela Oil Minister Rafael Ramirez told reporters Thursday. “We’re watching the price of oil, and we’re being careful,” Mr. Ramirez said at the central office of state energy company Petroleos de Venezuela SA, which is also headed by the minister.
“We’ve been in discussions over whether or not they are going to call a special meeting of OPEC. We’ve maintained that there is oversupply of oil in the market,” said Mr. Ramirez, repeating his government’s frequent calls to hold a “floor” of $100 a barrel……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries is going to have to cut production to keep crude oil prices at a reasonable level, an energy consultant said. Crude oil prices for the Brent trade classification this week dropped to less than $100 per barrel for the first time since July. The OPEC basket price, a representation of the cartel’s export grades, is less than $100 as well.
Ali Aissaoui, a consultant at the Arab Petroleum Investments Corp., told Bloomberg News that OPEC’s top producer, Saudi Arabia, needs prices around $94 per barrel to keep its federal budget in check. Iran, meanwhile, needs a price per barrel of around $125 to keep its budget balanced……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

India’s sixth nationwide commodity futures trading platform — Universal Commodity Exchange (UCX) — is set to go live on Friday, the auspicious day of Ram Navmi with trading facility in both agri and non agri contracts.
Confirming the development, Ketan Sheth, managing director of Commex Technologies, the promoter of UCX, said, “We will focus on gold, silver and crude among non agri sector while refined soya oil, chana, pepper and turmeric would be available contracts in agri sector.”…………………………………….Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

The Australian dollar slumped again Thursday as global commodity markets continued to suffer from disappointing Chinese economic growth data. The slide in commodity prices began with gold this week and has spread to copper, crude oil and silver. The decline has been so quick that there is fear of insolvency among investment funds caught out, traders said.
The Australian dollar traded at $1.0313 at 0700 GMT compared with $1.0356 late Wednesday. It traded as low as A$1.0269 in Asia……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

It’s been a bad week for efforts to develop green energy around the world. A new report from the International Energy Agency (IEA) says that progress towards carbon-free energy production has basically stalled.
“Despite much talk by world leaders,” said IEA executive director, Maria van der Hoeven, “and despite a boom in renewable energy over the last decade, the average unit of energy produced today is basically as dirty as it was 20 years ago.” The IEA uses a complex calculation called the carbon intensity index to show how much CO2 is emitted to provide a given unit of energy……………………………………..Full Article: Source

Posted on 19 April 2013 by VRS |  Email |Print

The world isn’t cleaning up its energy systems despite increasing investment in renewable power, according to a new report. So how has this happened? The answer in one word: coal.
The International Energy Agency (IEA)’s report, released yesterday, measures carbon intensity, or the amount of carbon dioxide released for each unit of energy consumed around the world. It finds that since 1990 carbon intensity has remained “essentially static” - meaning the world is currently heading for six degrees Celsius of warming above pre-industrial levels……………………………………..Full Article: Source

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