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Commodities Briefing 04.Jul 2013

Posted on 04 July 2013 by VRS |  Email |Print

It’s been one of the worst investments of 2013—and this Roubini strategist thinks it will get even worse. Gold, copper and grain prices have dropped precipitously this year. In fact, JPMorgan’s commodity team recently used that as a reason to get bullish on the space.
“In a number of commodities, prices have fallen far enough for long enough to force involuntary cuts in production and to spur fresh demand,” JPMorgan’s note read. In fact, JPMorgan said that “Sentiment is universally bearish,” creating some real opportunities………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Four Democratic lawmakers sent a letter to Federal Reserve Board Chairman Ben S. Bernanke asking if investments in the commodities business by Goldman Sachs Group Inc. and JPMorgan Chase & Co. (JPM) pose risks to the economy.
Representatives Alan Grayson of Florida, Raul Grijalva of Arizona, John Conyers of Michigan and Keith Ellison of Minnesota also asked Bernanke in the letter to explain the legal basis for allowing the banks to hold commodity-related assets………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Investing in commodities can be a little intimidating. They are frequently touted for their attractive long-term returns, diversification benefits, and as a hedge against both inflation and a decline in the value of the dollar. But in light of commodities’ poor recent performance, and seemingly high correlation with stocks, it is worth re-evaluating each of these arguments in turn.
It can be difficult to understand how a piece of metal or stash of corn can offer investors a real return over the long run. After all, the immediate needs of producers and consumers determine commodity spot prices, rather than investors’ return requirements………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

China’s slowing economy, tighter monetary policy and the precarious state of the country’s small banks which have lent to property developers, all spell less demand for Australian commodities through the rest of the year, former People’s Bank of China official Shuang Ding, now Citigroup’s senior China economist, says.
Ding, who also worked for the International Monetary Fund for 13 years, told Markets Spectator the growth rate of the world’s second-biggest economy is falling. In the first quarter this year China’s economy expanded by 7.7 per cent. In the second quarter Ding expects it to grow by 7.5 per cent, the Chinese government’s 2013 target. But that growth rate is “at risk,” Ding says………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

The price of US light crude oil hit a 14-month high on Wednesday to over $100 a barrel on concerns over political turmoil in Egypt. The benchmark US crude rose $1.64 to $101.2 a barrel, its highest since May 2012, while Brent crude rose 1.76% to 105.76 a barrel.
As well Middle East worries, rising US demand for oil also boosted prices. The US Energy Department said that weekly US crude supplies fell by 10.3 million barrels………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Gasoline prices have been falling across most of the U.S. for weeks and are now at their lowest level since January, according to data from the U.S. Energy Information Administration.
That might seem like an oddity heading into Fourth of July weekend, when motorists hit the road, but over the last decade prices have been more likely to fall leading up to July 4………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Gulf countries are increasingly turning their focus toward clean renewable sources of energy for their power generation, with solar energy set to emerge as one of the region’s main sources of energy by 2017. Already solar power installation projects worth approximately $ 155 billion are in the pipeline with capabilities to generate more than 84 GW of power.
The Gulf countries will be addressing some of the main challenges related to the deployment of energy projects in desert terrain at a high-level industry summit in Dubai later this year………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

What’s going on with gold prices? With the price of the yellow metal near two-year lows through much of 2013, some investors wonder whether the price decline will continue. Is this a bear market for gold or will it rebound?
A new report from analysts at Incrementum AG in Liechtenstein says there are good reasons to be bullish on gold, which was trading Wednesday at about $1,252 an ounce. In fact, the report, titled “In Gold We Trust 2013,” set a 12-month target for gold prices at $1,480 and a long-range target at $2,230………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

As gold market went through a period of great volatility since late last year, analysts forecast the spot gold price will remain on the downward trend in medium term although some said rebound may take place in the short term.
Since hitting a high of 1,798 U.S. dollars an ounce last October, gold price had fallen about 35 percent to 1,202 U.S. dollars as at end June, with nearly 25 percent plunge taking place in second quarter alone………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

The collapse in gold’s value and negative sentiment towards the yellow metal arguably presents a case for a value play but a lack of any clear catalysts makes it attractive only to the brave.
Just last week the price of bullion collapsed below the $1,200 mark, its lowest level in three years, as the fears over the US Federal Reserve tapering back its massive stimulus programme continued to rock markets………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Here’s a riddle for you… When folks sell their electronic-traded-fund (ETF) gold and other electronic bullion, where does it go? Does the bullion zap away into the nether regions of the internet? Does it move from one clandestine warehouse to another? Maybe it heads to a government coffer?
You may be surprised where one gold research firm thinks the “sold” metal may be heading. Plus, as the layers of the onion fall off, you’ll likely be swayed into my line of thinking: now’s an important time to get physical in the gold market………………………………………….Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Did the Gold Standard die as soon as Richard Nixon pronounced it dead? Hardly. In fact gold standard underwent a kind of metamorphosis. Centralised gold standard became de-centralised gold standard.
People took gold standard to their home in a bid to preserve their wealth. To put it another way: while fiat money helps you pay your bills, gold in physical form helps you preserve your wealth………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

The silver market has taken a nose dive in recent trading sessions, leaving many of those positioned on the long side underwater. Taking a deep breath, it may be time to acknowledge the difference between physical and paper.
Put simply, paper derivatives do not price in fundamentals. Nevertheless, price movements in paper products are shaping sentiment, and are moving the precious metals far off the radar screen as an attractive investment — except perhaps for the very few that see their intrinsic value. ……………………………………….Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

The first half of 2013 is officially in the books as commodity investors take a look back on a relatively eventful two quarters. While equities surged to highs never seen before, a number of commodities struggled, as analysts and investors fear that the super-cycle may be nearing its end.
But while a number of high-profile commodities, like gold, had a tough time this year, there were others that persisted. Below, our firm outlines three commodities who turned in positive performances through the first six months of the year………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Singapore Precious Metals Exchange (SGPMX), the world’s first physical precious metals exchange with peer-to-peer bullion trading capabilities integrated into the trading platform, launched in Singapore today, amid Singapore’s drive to encourage gold trading in the country. As part of the launch, SGPMX also announces the entry into an MOU with Certis CISCO which will act as the custodian for bullion storage.
Certis CISCO has been providing secure and trusted storage of precious metals for renowned banks and international couriers since 1986. Storage with Certis CISCO will enable SGPMX to provide the platform for private individuals, traders and institutions to buy, sell, store and exchange precious metals including gold and silver bullion, without incurring high spread margins. (Press Release)

Posted on 04 July 2013 by VRS |  Email |Print

Findings from the annual Global Food Security Index were issued Tuesday by the Economist Intelligence Unit (EIU) that shows food security has improved in some developing nations. The average 2013 Global Food Index Score held flat at 53.5, compared to the 53.6 measured in 2012.
The Index, a first-of-its-kind ranking tool to comprehensively measure food security and monitor the ongoing impact of agriculture investments, collaborations and policies around the world, is commissioned by DuPont………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Commodity-linked currencies such as the rand and Australian, New Zealand and Canadian dollars have, for some time, been regarded as a safe haven of currencies.
In the past they moved in line with the price of oil and other natural resources, because of their economies’ large focus on exporting these goods. Historically the pound has battled against these currencies; it enjoyed supremacy against all of them back in 2008 but fell dramatically from grace two years later………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

Policymakers say a higher price is essential to encourage more greenhouse gas reductions across Europe’s industry. Critical reforms to Europe’s flagship scheme for cutting carbon emissions were passed for the first time on Wednesday in the European parliament. The move immediately caused the price of pollution permits, currently near rock bottom, to rise. Policymakers believe a higher price is essential to encourage more greenhouse gas reductions.
The EU emissions trading scheme, the largest in the world and now being replicated in China, is intended to tackle climate change by reducing CO2 emissions across Europe’s industry. But a huge oversupply of permits, owing to the economic crisis causing production to drop, and because of lobbying by industry, caused the price paid to emit a tonne of carbon to crash in recent years………………………………………..Full Article: Source

Posted on 04 July 2013 by VRS |  Email |Print

An attempt to fix Europe’s carbon-trading program cleared a significant hurdle Wednesday as the European Parliament voted in favor of a proposed revamp, despite deep divisions within the region over energy policy.
The legislation—intended to restore financial incentives for an industrial shift away from fossil fuels and toward renewable energy—has been fiercely debated by policy makers and heads of industry since parliament rejected similar measures in April………………………………………..Full Article: Source

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