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Commodities Briefing 09.Jul 2013

Posted on 09 July 2013 by VRS |  Email |Print

Total assets managed by the Top 100 alternative investment managers globally reached $3.1 trillion in 2012, according to research produced by Towers Watson and published in conjunction with the Financial Times.
The Global Alternatives Survey, which covers seven asset classes and seven investor types, shows that of the Top 100 alternative investment managers, real estate managers have the largest share of assets (34% and over $1.0 trillion) followed by direct private equity fund managers (23% and $717bn), direct hedge funds (20% and $612bn), private equity funds of funds (PEFoFs) (10% and $315bn), funds of hedge funds (FoHFs) (6% and $176bn), infrastructure (4%) and commodities (4%)………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Opalesque Industry Update:Hedge funds posted the first monthly decline for 2013 in June, ending a streak of seven consecutive months of gains, the longest run of positive performance seen by the industry since 2011, according to data released today by HFR, the established global leader in the indexation, research and analysis of the hedge fund industry.
The HFRI Fund Weighted Composite Index declined -1.3 percent for the month, only the second decline in the trailing thirteen months. All four main HFRI Strategy Indices posted losses for June, with declines led by Macro and Equity Hedge strategies………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

The price of oil is back above $100 (US) per barrel for the first time in more than a year. It’s a psychological barrier that creates worry around global economic growth, but some economists remain unruffled, at least for now.
Unlike in the past, when rising prices were partially blamed for economic droughts, experts see the current boost as a potentially positive indicator and driven by different factors than at other points in history………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Short does not necessarily mean stifled. Last week’s three and a half days of open trading did not lessen the volatility I’ve been discussing for two months. I recently said that less can be more with regards to volume and erraticism in the market. Quite a bit of headline sensationalism has been driving the tape of late, and there’s much to discuss.
However, today’s piece will focus on two countries of primary concern: Portugal and Egypt. It has been some time since the discussion of the PIGS nations has been center stage, but recent developments have brought the “P” to the front once again. With Italy, Greece, and Spain merely a faint memory – how quickly we forget – Portugal is back in the limelight………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Much of this you may have read here before, but it is worth repeating because the dramatic distortion in oil prices over the past weeks and their potential impact on the economy is becoming acute, and nothing is being done about it.
Some two weeks ago the Federal Trade Commission announced that it will open a probe on suspected oil price-fixing. We wish them God speed. In the past fortnight the price of oil has spiked some 10 percent in spite of the countervailing realities that would ordinarily militate against the precipitous rise in price that has taken place, realities such as:……………………………………….Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

The Organisation of Petroleum Exporting Countries (OPEC) will boost shipments by 2.3 per cent through late July as driving demand peaks during the northern hemisphere summer, Bloomberg quoted Oil Movements.
The group that supplies about 40 per cent of the world’s oil will ship 24.18 million barrels a day in the four weeks to July 20, up from 23.64 million in the period to June 22, the news wire quoted the tanker tracker to have said in an e-mailed report. The figures, according to the report exclude two of OPEC’s 12 members, Angola and Ecuador………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

This year has been rough for commodities. Gold is down roughly 25% in 2013, as is corn, while silver is off an astounding 35% through the end of June. But there has been one exception to this trend: energy, particularly oil.
Crude oil has proven more resilient and less volatile this year (depending on which benchmark you use, it is either up or down in the single digits) than most other commodities. There are three main factors behind this:……………………………………….Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Gold has had a terrible year, its price dropping 25 percent in the last quarter alone. “You’re cheap,” says John Waggoner at USA Today. Really, really cheap. Like, “when someone asks you for three cheers, you only give two.”
But is it cheap enough to buy yet? The short answer: That’s a really tough question. Generally, gold prices are supposed to rise when the economy weakens. The basic idea is that gold is beautiful, finite, and scarce, a physical anchor in a sea of floating paper currencies………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Gold will probably extend its decline through 2014, even as the commodity super cycle that’s brought longer-than-average rising prices may persist for a further two decades, according to Societe Generale SA.
Bullion may average $1,150 an ounce next year, said the head of commodities research, Michael Haigh, who in April correctly predicted the metal’s rout. That would be the lowest annual average since 2009, data compiled by Bloomberg show………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

The worse has not yet come for the gold market. Commodities expert Jim Rogers warned that the price of the yellow metal could fall to $900 an ounce.
When gold was trading at $1,900 in the fall of 2011, Mr Rogers correctly forecast the price of the safe haven would go down to $1,200. It did on June 27. He joins another gold expert, Nouriel Roubini, in foreseeing gold will further crash………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Monday produced a lot of gold chatter. One of the standouts came from Deutsche Bank, which said the gold correction may just about be over. Gold has tumbled more than 30% from a September 2011 peak above $1,900 to under $1,300 presently. Gold was up about $20 on Monday, rebounding from a selloff late last week. A short-covering bounce and some safe-haven demand on Egypt unrest helped, says Kitco’s Jim Wyckoff.
So here’s the Deutsche Bank rationale: There have been worse gold fallouts, such as that of 1980-81. During that time, gold hit a record $850, plunged to between $300 and $400 and stayed there for years before resuming its upward trend………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

The old adage “history repeats itself” has been applied to all facets of the investing world, but it’s especially apparent in the commodity world. With most assets displaying cyclical returns and seasonality, the history of many commodities is bound to repeat itself the following year. When it comes to gold, Peter Schiff believes that the phrase points the path to a major run up in gold that few investors will be counting on.
In 1976, gold had just finished bottoming out as a correction put an end to a multi-year bull run. Schiff notes that at this point in time, the American economy was at a point where confidence was returning and investors where beginning to increase their risk appetite………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Gold prices just wrapped up their worst quarter - down 23 per cent - since at least 1920, according to Bloomberg News. The shiny metal has lost its glow for now. So, what’s going on with gold? The decline “is feeding on itself,” according to experts cited in this article at CNBC’s Market Insider.
Writer Patti Domm quotes a list of those experts who note that factors affecting gold’s decline include a slowdown in gold-buying by China and India, shattered confidence that gold’s rise in value would continue unabated, and the failure of predictions, going back years, that inflation was about to take off………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Gold’s steepest quarterly drop in at least 90 years will create stronger producers that shun expensive new mines and return more to their shareholders, fund manager Craton Capital said.
“It’s a very healthy cleansing exercise and the result will be a much better industry,” said Markus Bachmann, manager of the Craton Capital Precious Metal Fund………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

The gold price ticked higher in London trade Monday morning, rising from its lowest weekly close in three years as Asian stock markets fell but Eurozone shares jumped over 2% higher.
Major government bonds ticked higher, easing interest rates down, while the US Dollar held steady after last week’s strong gains on the currency market………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

The price of silver has plunged quicker than that of gold since Federal Reserve boss Bernard Bernanke’s positive comments on the US economy three weeks ago. In that time silver’s price has plunged 13 per cent to about $US18.80 ($A20.86) an ounce currently - and 35 per cent for the year - compared to a fall of less than 12 per cent for gold.
That’s a far cry from the record high prices close to $US50 in 2011, which many predicted would return in 2013 until Dr Bernanke’s comments………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

As readers of Profit Confidential already know, I have been bullish on both gold bullion and silver prices. I believe these two precious metals have great futures ahead of them, in spite of all the negativity about them in the mainstream media and their recent price slump—especially silver.
According to the mainstream media, that’s because the Federal Reserve is about to stop pumping money into the economy. The U.S.economy is getting better, and the global economy isn’t doing as poorly as many thought it would. Under those conditions, metals like gold bullion and silver would not be wise investments………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

The gold price ticked higher in London trade Monday morning, rising from its lowest weekly close in three years as Asian stock markets fell but Eurozone shares jumped over 2% higher.
Major government bonds ticked higher, easing interest rates down, while the U.S. dollar held steady after last week’s strong gains on the currency market. A Wall Street Journal survey says the majority of economists think that Friday’s jobs data mean the U.S. Federal Reserve will start reducing its quantitative easing program as early as September………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Holdings of Absa Capital’s platinum-backed exchange traded fund (ETF) had reached more than half a million ounces just 10 weeks after its launch and now accounted for a quarter of all global platinum ETF reserves, the fund said.
Absa said that as of the end of Thursday, its NewPlat ETF held 503 613 ounces of platinum. Despite a relatively poor performance in the spot platinum price, there has been strong interest in the fund since its launch on April 26………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Chile cut its copper output forecast for the year to 5.53 million tonnes due to setbacks at certain mines, though production is still expected to jump from 2012 as a new deposit comes online, the mining ministry said on Monday.
In April, state copper commission Cochilco forecast the world No. 1 copper producer’s red metal output would reach 5.58 million tonnes this year. The lower estimate is due to delays at Japan’s JX Holdings’ Caserones mine and lower forecasts for output from the Spence and Esperanza deposits, run by global miner BHP Billiton and Chilean miner Antofagasta Minerals respectively, Cochilco told Reuters………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Like the white noise from household electronics that is only noticeable in its absence during a power failure, so the global commodities sector has got used to double digit growth from China.
While there is no doubt that Chinese growth has slowed, initial panicked reaction from markets about this slowdown was replaced by the recognition that, while it is slowing, 7 – 8% is still very respectable. According to a new note by Barclays, however, recent tightening in liquidity conditions, weaker business confidence and slowing growth have increased the likelihood of a hard landing, albeit a short-lived one, for the Chinese economy………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Gold slipped a touch on Tuesday, pressured by a sharp fall in holdings in bullion-backed exchange traded funds and persistent fears over the end of easy central bank money.
Spot gold was down $1 at $1,234.89 an ounce by 0025 GMT, after gaining 1 percent on Monday as the dollar eased from three-year highs………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

It’s been hog heaven for commodity traders who have pigged out on pork – the best commodity of 2013. Indeed, the $12 billion hog-futures market has gained 19% year-to-date, making it the biggest gainer among commodities in the Dow Jones Commodity Index, which fell 9.9% in the period.
Robust consumer demand, tight supplies and favorable prices compared to beef – which hit record retail prices this spring – were behind pork’s healthy gains………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Tradition Financial Services Ltd., a broker of over-the-counter physical and derivative products, hired Tom Warwick to head its new agricultural commodities desk. London-based TFS is starting the desk to broker deals in grains and the so-called soft commodities including cocoa and coffee, Mike Anderson, a managing director running the energy and commodities desks at the company, said.
Warwick previously worked for companies including Refco Inc., MF Global Holdings Ltd. and JB Drax Honore (U.K.) Ltd………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Commodity markets are becoming increasingly important in today’s financial scenario. Many investors, traders and fund managers are now shifting their attention towards asset classes such as Crude Oil, Natural Gas, Gold, Silver, Wheat, Coffee or Sugar.
Furthermore, the credit crunch brought a great deal of market instability and many equity indices, as well as single stocks, have been abandoned by or lost their appeal to many market players. There are several liquid commodities in the world but the present research will concentrate on, arguably, the heaviest in terms of volume: WTI Crude Oil, Gold and Henry Hub Natural Gas. ……………………………………….Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

Turkey’s efforts to pull the lira off record lows on Monday are likely to be emulated across emerging markets as central banks fight to avert an exodus of foreign capital driven by the impending turn in U.S. policy.
It’s all a far cry from a year or so ago, when emerging market exporters were battling rising exchange rates and Brazil was accusing Western policymakers of waging currency wars by flooding the world with cheap money………………………………………..Full Article: Source

Posted on 09 July 2013 by VRS |  Email |Print

The Indian rupee has been plunging for more than a month, stoking inflation and spreading fear of a crisis among investors. Expectations that the Federal Reserve will start tapering its bond-purchasing program this year have strengthened the dollar and sent emerging markets’ currencies—including the rupee—plunging.
As of Monday, the rupee has weakened more than 9 percent against the dollar since May 22, when Fed Chairman Ben Bernanke first mentioned the possibility of slowing its asset purchasing………………………………………..Full Article: Source

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