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Commodities Briefing 12.Jun 2013

Posted on 12 June 2013 by VRS |  Email |Print

A stronger dollar and weaker inflation expectations prompted further redemptions from commodity exchange traded products (ETPs) by investors in May,although the pace slowed from April’s record outflows.
ETPs, whose value is linked to moves in their underlying assets, are seen as an easy route into commodities. Commodity ETPs lost $6.3 billion last month according to data from BlackRock, compared with an unprecedented $9.3 billion in April. This was largely due to a reduction in outflows from gold ETPs, which totalled $5.7 billion in May, compared with $8.7 billion in April………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Thanks to the life support of $12 trillion and 515 rate cuts by the world’s central banks since March 2009, the global economy’s heart is beginning to beat again. As the market senses a robust economic recovery is underway, expectations are climbing that this growth will continue.
Even the Federal Reserve has hinted that it may taper quantitative easing because of the improved economic situation. As a result, interest rates are increasing. Europe was the lone wild card, but following Germany’s change of heart away from austerity, a positive outlook for growth, and therefore, rates, is rising in that area of the world as well………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

OPEC predicted world oil demand will grow more quickly in the rest of 2013 and indicated the group can keep pumping more oil than the ouptut target it retained at a May 31 meeting without over-supplying the market.
The Organization of the Petroleum Exporting Countries in a monthly report forecast world oil demand would expand by 900,000 barrels per day (bpd) in the second half, up from 700,000 bpd in the first six months of 2013. “The second half of the year is expected to see higher demand,” said the report by OPEC’s economists………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries raised crude output in May to the highest level in six months while keeping its demand forecast for 2013 unchanged because of risks to the global economy.
OPEC increased production by 106,000 barrels a day to 30.57 million a day last month, led by gains in Saudi Arabia, the group said today in its monthly market report, citing secondary sources. Global oil demand will increase by 780,000 barrels a day, or 0.9 percent, this year to 89.7 million a day, in line with estimates in the previous report………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

The United States and Canada are expected to be the main drivers of oil supply growth from non-OPEC members, the cartel said in a report published Tuesday. The Organization of Petroleum Exporting Countries published its monthly oil market report for June. The 12-member cartel said it expected to see higher oil demand during the second half of 2013.
The demand increase was expected because of higher energy demand during summer months and a modest recovery in the global economy. OPEC said world oil demand should reach more than 90.5 million barrels per day during the second half of 2013, higher than the 88.8 million bpd during the first half………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Any slowdown in the economic recovery may upset an expected balance in the oil market for the second half of this year, OPEC said in a report Tuesday as it slightly downgraded its global oil-demand growth views. But the Organization of the Petroleum Exporting Countries warned that the predicted balance could be threatened if a strong hurricane season in the U.S. disrupted production.
In its monthly oil-market report for June, OPEC–members of which produce more than one in three barrels of oil consumed each day in the world–said “uncertainties on both the demand and supply side have the potential to undermine the expected market balance in the second half of 2013.”……………………………………….Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

The shale revolution is likely to have a far bigger effect on the global gas market than on oil supplies, entrenching the long-term price advantage of gas, according to new data from the Energy Information Administration (EIA).
Shale will extend recoverable oil resources by only 11 percent but boost recoverable gas resources by 47 percent, according to the agency’s report on “Technically recoverable shale oil and gas resources: an assessment of 137 shale formations in 41 countries outside the United States”………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Gold is set to drop to the lowest level since 2010 after forming a symmetrical triangle, according to technical analysis by Bank of America Corp.
Bullion for immediate delivery will drop to as low as $1,250 an ounce over the next month after the “well-defined, symmetrical triangle” it formed since April 16, MacNeil Curry, chief of rates and currencies technical strategist at Bank of America in New York, said by telephone yesterday. That would be the lowest level since September 2010………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Gold is one of the most valuable and desirable substances known to man. For many years it has been a status symbol as well as a form of currency since the days before money. It is also the most popular material for making jewellery, with roughly half of all gold being used in this way.
Gold prices: For many years, the price of gold was a relative standard for currencies around the world. This started to change in the 1970s when the value of the US dollar stopped being linked to the price of gold and ended in 2000 when the Swiss Franc was the last currency to remove the link………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

The quadrillion pound gorilla of silver’s return as a monetary currency is now lurking patiently in the room as the bond market seems to be recovering somewhat.
Nevertheless, perhaps central banks are simply testing the resilience of the bond market by tempting the bond vigilantes out of hiding? Still, one has to remember that there is no strong willed Volker around at the Fed with the guts to raise interest rates to fight inflationary pressures………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Silver prices peaked in April 2011 and dropped about 60% over the next 25 months. Sentiment by almost any measure is currently terrible. Few are interested in silver; most have lost money (on paper) if they bought in the last two and one half years, and the emotional pain seems considerable. It reminds me of the years after the NASDAQ crash in 2000.
To help answer that question, I examined the chart of silver for the last 25 years and identified several long-term cycles. Then I constructed a spreadsheet that attempted to model the price of weekly silver based on those cycles and a few assumptions………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Gold ETFs have corrected hard in 2013 after hitting multi-year highs. Nevertheless, gold has not had it as bad as silver and related exchange traded funds. The iShares Silver Trust has dropped 29.0% year-to-date, whereas the SPDR Gold Shares has declined 17.7%.
“This is largely because silver, unlike gold, swings between dual roles as a useful industrial metal and safe-haven asset,” according to Morningstar analyst Alex Bryan. “Most of the time, industrial demand drives silver prices. However, during times of market dislocation, high inflation expectations, or economic uncertainty, investment demand for silver becomes the main price driver.”……………………………………….Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

“Declining economic growth and weak demand in China, the world’s biggest metals consumer, has spurred many analysts to cut forecasts,” according to a recent Reuters story. Goldman Sachs cut its copper forecast to $7000/ton for 2013 from $8000 a ton.
Readers received a “heads up” on copper prices back in October when this publication made much attention of layoffs at Caterpillar, the world’s largest heavy equipment manufacturer with significant exposure to the mining industry………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

When it comes to Latin America ETFs, a familiar situation still exists. That being regardless of what the region’s major bourses are doing, moving up, down or sideways, Brazil commands most of the headlines. At the ETF level, that means the iShares MSCI Brazil Capped Index Fund (EWZ) is the Latin America fund investors, broadly speaking, are most familiar with.
EWZ has its own litany of well-documented woes, but it is far from being the only major Latin America that is being taken to task………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Bearish technical “death crosses” don’t always lead to further weakness, but the one that appeared recently in the iShares MSCI Emerging Markets ETF (EEM) looks likely to be one that does.
That also fits with other signs that technicians see as warning that the longer-term trend has turned lower, including a bearish “head-and-shoulders” reversal………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

The investor love affair with emerging markets may be gone, but several money managers aren’t completely abandoning the sector. Fund managers who viewed emerging markets as a single investment category now need to go through extreme due diligence to select each asset, sector or country in order to attain returns.
Factors that fueled the emerging market rally like Chinese economic growth and quantitative easing in developed countries are now easing off. That has left emerging economies to fend for themselves………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Indonesia, the world’s largest producer of tin and palm oil and the third-biggest coffee grower, is seeking the help of futures-exchange owner CME Group Inc. (CME) to expand domestic trading of commodities, according to Deputy Trade Minister Bayu Krisnamurthi.
“Everybody is saying that Asia is the agent of growth in the world, so evolvement of an Indonesian commodity market is inevitable,” Krisnamurthi said yesterday during an interview in Chicago, where the CME is based. “CME is over 100 years old, and the Indonesian commodity market is 10 to 12 years old. We would like to grow it, develop it.”……………………………………….Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

The Canadian dollar rose to its highest point in almost three years versus its Australian counterpart as traders speculated the North American economy will lead global growth. Canada’s currency fluctuated against the U.S. dollar as oil dropped as much as 1.8 percent before a report forecast to show stockpiles fell last week in the U.S., the largest customer of Canadian crude.
Canada posted its biggest jobs gain in a decade and the fastest pace of new home construction in 13-months in May, while stronger U.S. data has sent bond yields higher. The loonie gained versus the Aussie after Australia home-loan approvals grew at the slowest pace in three months………………………………………..Full Article: Source

Posted on 12 June 2013 by VRS |  Email |Print

Carbon emissions from fossil fuels reached record levels, but the 2012 rise was relatively small, and there are positive signs. As Fiona Harvey reported for The Guardian, the International Energy Agency (IEA) 2012 World Energy Outlook Report found that annual carbon dioxide emissions from fossil fuels rose 1.4 percent in 2012 to 31.6 billion tonnes (gigatonnes [Gt]).
The bad news is that this is a new record high level of emissions. The good news is that it represents the second-smallest annual increase since 2003, behind only 2009 when global fossil fuel carbon emissions fell due to the global recession. Emissions estimates from 2009–2010 have also been revised downward, so the reported 31.6 Gt 2012 emissions match the reported value from 2011………………………………………..Full Article: Source

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