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Commodities Briefing 07.May 2013

Posted on 07 May 2013 by VRS |  Email |Print

Gold has cratered into bear market territory. Ditto for silver and copper. Aluminum is in a big downtrend too, along with its metallic cousin nickel. The price of oil has been moving sideways and agricultural commodities are well off last year’s drought-induced highs.
Glance at a list of commodities, and just about everything other than natural gas has been doing nothing or heading south. Sure, there are occasional counter trend rallies, like Friday’s nice move upward for oil and copper on the back of stronger-than-expected U.S. payroll figures, but the overarching trend doesn’t look good………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Sometimes following where money is being invested is a solid course of action. Other times, a better opportunity lies in going the opposite direction.
Take commodities, energy and materials, which may be the most unappreciated areas of the market these days. According to Bank of America Merrill Lynch’s Global Fund Manager Survey of 250 participants who collectively manage $725 billion, energy, materials and commodities are extremely underowned………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

China’s main commodity imports are expected to rise in April from a month ago, supported by a seasonal recovery in demand, but the pace of growth in the second quarter will likely be capped by constraints on manufacturing.
China will release preliminary April trade data on Wednesday. Shipments of crude oil, iron ore and soybeans are all likely to have climbed for a second month, after shipments fell in February due to a week-long holiday, although copper arrivals may ease slightly due to port strikes in top exporter Chile, traders said………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Maybe it’s the gloomy Seattle weather that has made investment manager Jim Hansen and his son and partner, Kevin, at Ravenna Capital Management immune to oil and gas industry hype about the supposed U.S. shale gas “revolution.” More likely it is thorough research focused on making their clients money and keeping that money out of harm’s way.
The Hansens are patient contrarian investors whose time horizon is generally several years. They can’t help you if you want advice on next week’s or next month’s natural gas price. In fact, they’re not sure anyone can reliably help you with that. So they focus on much longer-term trends, and they think they’ve spotted one in the U.S. natural gas market………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

The price of oil edged higher Monday as tension increased between Syria and Israel. The benchmark oil contract for June delivery rose 55 cents to close at $96.16 per barrel on the New York Mercantile Exchange. It was the third straight day of gains for oil, and the first close above $96 since April 2.
Prices rose early Monday on news of an Israeli military strike in Syria, raising concern of an expansion in conflict in the oil-rich Middle East. The price fell back below $95 before rising again late in the day………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

If oil prices across the globe don’t seem to square with what one would expect in a free market system, there’s a reason for that. The OPEC cartel, according to a new published by Securing America’s Future Energy (SAFE):
[H]as at times been effective in forcing up the price of oil and, thereby, allowing the export nations to obtain a significant premium captured by national oil companies on behalf of their sovereigns. At times this means a transfer of wealth from oil-consuming nations to oil-producing nations totaling hundreds of billions of dollars more than what the competitive-market price of oil would suggest………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

A raft of mergers in the US oil sector has been predicted as smaller companies will find it difficult to comply with new regulations introduced after BP’s Macondo oil spill in the Gulf of Mexico.
A wave of merger and acquisitions (M&A) in the US oil and gas sector is in prospect, as smaller players struggle to comply with new rules introduced after BP’s Macondo oil spill in the Gulf of Mexico………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Though credited with stabilizing gold price, the recent gold-buying spree in China reveals a lack of investment options for Chinese households looking to retain asset value. Despite a new price swing, the precious metal will stay buoyant at 1,542 US dollars per ounce for 2013, thanks in part to strong retail demand from China and India, predicted HSBC recently.
Chinese households came under the spotlight with their generous purchase of the yellow metal amid a growing chorus to short-sell gold to shore up the dollar and the US economy. Chinese buyers have swarmed into retail stores in the mainland and Hong Kong over the past two weeks, snapping up 300 tons of gold, according Chinese media reports………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Gold-buying fever continued unabated among the untutored masses worldwide last week. Imports to India, the biggest gold consumer by far, were running at five times average levels, according to investment bank UBS.
Chinese smallholders used their May Day holiday not to head for the beach, as this column naively suggested last week, but to flood the gold dealers in Hong Kong. Turkey bought more gold in April than in any month since the fateful days of August 2008. And so on. Were the financial pros back in New York and London impressed by this spontaneous outpouring of gold love? Not a bit………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Behind the recent gold crash is no central bank manipulation, at least that is what one can gather from the words of the contrarian investor and the author of ‘The Gloom, Boom, & Doom report’, Marc Faber.
He knows that central banks in Asia are grossly underweight when it comes to gold. And the central banks in Western nations hold substantial quantity of gold. “So why would they depress the price of gold [as] a gift to the Asian central banks, to be able to buy [it] at a lower price? That I don’t [understand] entirely,” he said……………………………………….Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Barclays, in its latest report on gold has projected Q2 13 price of gold at $1350/oz and 2013 price at $1483/oz.
Gold prices fluctuated around the $1460/oz price level last week as gold ETPs reached a monthly record net outflow in April. While gold prices rose after the ECB rate cut, prices ended the week roughly flat, after Friday’s US employment report. Although ETP outflows continued to put pressure on prices, coin sales at various Mints remained strong in April………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

The usefulness of sentiment’s stealth crystal ball is about to be revealed to the litany of unsuspecting precious metal bears and skeptics who have convinced themselves that gold’s bull market is either over or, at the minimum, in need of lengthy ongoing retesting, restructuring and consolidation.
This article will bring us up to date as to the degree of current bearish sentiment regarding both gold and silver using no fewer than five sentiment indicators (with nine illustrative charts), as well as provide the reader with an opportunity to observe the price outcome of previous bearish extremes using these sentiment indicators………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

The recent declines in the gold and silver markets have prompted some soul searching among even the more dedicated precious metals investors. A rational investment approach would involve considering the likelihood of various scenarios that could hurt precious metal prices even further.
Steadfast precious metals holders might be wrong about the long term bullish prospects for silver and gold if just a handful of the following statements were true:……………………………………….Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

While gold might be losing shine due to falling prices, silver had dimmed last year itself. Demand and imports into India fell 80 per cent in 2012. The fall in demand has a direct reflection on import, though India produces sizable silver, unlike gold where the country is totally import-dependent.
The fall in demand for silver is attributed to a fall in investment. In 2012, India’s silver demand for investment was just 300 tonnes, against 1,549 tonnes in 2011, according to Thomson Reuters GFMS, which compiles the data. India’s total demand for silver was 3,234 tonnes in 2012 against 4,437 tonnes in 2011……………………………………….Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

This may be the best time in more than a decade to invest in palladium. Normally known for its volatility, the white metal is about to enter a period unlike anything the precious metals sector has ever seen. Most folks don’t know it, but palladium is 30 times more rare than gold. And worse yet, 80% of the globe’s supply comes from just two countries – South Africa and Russia.
The supply situation is a mess… and it’s about to get much worse. In Africa, the problem is simple. Mines lose huge amounts of money each year pulling palladium out of the ground. An overreaching government has made it all but impossible to modernize the mining process………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

A rally in platinum prices is in danger, as promised production cuts from the world’s biggest miner of the metal face opposition from the South African government. Prices are up 6.3% since mid-April, when they plunged alongside gold and other precious metals.
But even bullish investors say there is a wild card that could undo recent gains: the outcome of negotiations between Anglo American Platinum Ltd.,which produces about 40% of the world’s platinum, and the South African government………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Half of institutions using exchange-traded funds (ETFs) expect to increase their allocations to ETFs in the coming year according to the results of new study, Institutional Investors’ Relationship with ETFs Deepens, from Greenwich Associates. When looking to invest in ETFs, U.S. institutions turn most often to iShares, BlackRock’s ETF business.
Last year’s study on ETF usage, Institutions Find New, Increasingly Strategic Uses for ETFs, indicated that institutional investors with experience using ETFs for tactical portfolio adjustments were finding new, more strategic and longer-term uses for the funds………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Mukesh Kumar Chhaganlal said he tried to warn his manager at UBS AG about the “increasingly unrealistic” currency rates being set last year for the Indonesian rupiah against the dollar.
His manager told him nothing could be done because “there was no way to control the market or how people set the rates on the market”, according to court documents Mukesh filed in Singapore recently in his wrongful termination suit………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

The European Union became a pioneer in tackling climate change by starting the first major cap-and-trade system designed to reduce carbon-dioxide emissions by putting a price on them. But analysts are increasingly worried that technical mistakes, Europe’s prolonged recession and the failure of policy makers to strengthen the system is undermining its effectiveness.
Like all such systems, Europe’s program caps the overall emissions that power plants, steel mills and other industries can put into atmosphere………………………………………..Full Article: Source

Posted on 07 May 2013 by VRS |  Email |Print

Governments and members of the European Parliament must decide on a plan to prop up the EU carbon market by July at the latest, a joint statement from nine energy and environment ministers, said.
The statement, seen by Reuters, is expected to be published officially on Tuesday to coincide with discussions among members of the European Parliament on the European Commission plan. No-one from Britain’s Department of Energy and Climate Change, which is expected to release the statement, was immediately available for comment………………………………………..Full Article: Source

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