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Commodities Briefing 02.Aug 2013

Posted on 02 August 2013 by VRS |  Email |Print

The Reserve Bank of Australia’s index of commodity prices fell by 1.5 per cent in the month in foreign currency terms. After the latest fall, commodity prices are down by 24 per cent from their peak in July 2011, and at their lowest ebb since April 2010.
The RBA said the main contributors to the fall in July were coal and gold, which were partly offset by increases in iron ore and crude oil prices. The RBA uses estimates of actual prices received by exporters to compile its index and noted that spot market prices for iron ore, coking coal and thermal coal had actually risen by 2.3 per cent…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

A new study from the Bank for International Settlements disputes the idea that adding commodities to a portfolio can lower the volatility of returns. Considering this has been the bedrock idea underlying the buying and selling of commodities as an asset class over the past 15 years, this is big news.
Taken in combination with trends negative for commodities markets such as the migration of manufacturing back to developed markets and 3D printing, there may be fewer reasons for investors to consider the asset class…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Should banks own and trade physical commodities? That was the question asked of senior regulators by the US Senate Banking Committee last week. US regulators are reviewing the trading and ownership of physical commodities by banks following increasing concerns about the length of time London Metal Exchange warehouses are taking to deliver assets.
A number of these warehouses are owned by bank and they have been accused of profiting from delays. Banks have also been accused of driving up prices, particularly in aluminium, because of the premiums owners are forced to pay for their metal to be delivered more quickly………………………………….Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

The dawn of the oil age was fairly recent. Although the stuff was used to waterproof boats in the Middle East 6,000 years ago, extracting it in earnest began only in 1859 after an oil strike in Pennsylvania. The first barrels of crude fetched $18 (around $450 at today’s prices). It was used to make kerosene, the main fuel for artificial lighting after overfishing led to a shortage of whale blubber.
Other liquids produced in the refining process, too unstable or smoky for lamplight, were burned or dumped. But the unwanted petrol and diesel did not go to waste for long, thanks to the development of the internal-combustion engine a few years later…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will curb shipments by the most in seven months as refiners begin seasonal maintenance while summer demand for driving fuel ebbs, tanker-tracker Oil Movements said.
The group, which supplies about 40 percent of the world’s oil, will cut exports by 500,000 barrels a day, or 2 percent, to 24 million barrels a day in the four weeks to Aug. 17, the researcher said today in an e-mailed report. It’s the biggest reduction since early January. The figures exclude two of OPEC’s 12 members, Angola and Ecuador…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Seaborne oil exports from OPEC, excluding Angola and Ecuador, will fall by 490,000 barrels per day (bpd) in the four weeks to Aug. 17, an analyst who estimates future shipments said on Thursday.
Exports will reach 24.02 million bpd on average, compared with 24.51 million bpd in the four weeks to July 20, British consultancy Oil Movements said in its weekly estimate…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Economic gains in the U.S. and upgrades to the nation’s energy-transport infrastructure are helping oil shrug off the downturn in other industrial commodities.
Crude prices are up 14% this year on the New York Mercantile Exchange, despite slowing growth in China and surging production in the U.S. They also buck a broader slump in commodities, with the Dow Jones-UBS Commodity Index down 9% this year…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Kitco News talks to Van Eck Global portfolio manager Joe Foster about the current state of the precious metals markets. Foster is bullish on gold and expects the markets to act better by fall. With regards to issues in the mining industry, Foster says it is a buying opportunity for mining stocks.
What is his outlook for gold? “Gold will move towards $1,500 an ounce by year end or early 2014,” he said. Tune in to hear what he has to say about gold and silver as well as Asian demand for the metals. Kitco News, August 1, 2013…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Gold seems to be on the run, practically. As per a latest data revealed by London Bullion Market Association showed that the amount of gold transferred between accounts held by bullion clearers has jumped to a 12-year high for a second month.
At an average of 29 million ounces a day, gold transfers between accounts held by bullion clearers jumped to a 12-year high in June for a second month Reuters quoted data from the industry group London Bullion Market Association. In the same month previous year, the gold transfer was 19.1 million ounces. This shows nearly 50 per cent jump on year-on-year basis…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Demand for the United States Mint’s American Gold and Silver Eagles continues to remain at elevated levels as investors take advantage of lower spot prices. Sales levels for the gold and silver bullion coins were both up strongly compared to year ago levels.
For the typically seasonally weaker month of July, American Gold Eagle sales reached 50,500 troy ounces across the available one ounce, one-half ounce, one-quarter ounce, and one-tenth ounce sizes. The total sales represented an increase of 65.57% compared to the total sales of 30,500 from the year ago period…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

The first half of 2013 has seen a lower level of mergers and acquisitions according to an Ernest & Young report. In its latest report, E&Y state that global M&A in mining has been subdued so far. It explained that instead “management teams across the industry are focused on cost containment, margin improvement and asset optimisation at the expense of high risk capital expenditure, acquisitions or exploration”.
The report states that internationally, investors’ confidence in mining and metals, which have been particularly sensitive to short term economic changes…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Oil is off to a great start in August, continuing the solid trend that the commodity saw in the previous month. The commodity was a big beneficiary of the recent Fed meeting, as expectations for a reduction in QE were seemingly pushed out a little longer.
This expectation helped crude oil to remain firm in the final trading day of July and set the stage for more positive moves, depending on how the latest burst of data played out…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

The recent woes of National Spot Exchange Ltd (NSEL) have put the spotlight on the world of commodity trading. The exchange has had to abruptly suspend trading in a large number of its contracts as well as defer the settlement of trades that have already been executed. This resulted in rumours of a settlement crisis, leading to a 66% drop in NSEL’s parent company, Financial Technologies (India) Ltd’s (FTIL) shares.
The fear was that FTIL might have to make good NSEL’s settlement obligations, but according to the head of a large domestic trading house, the exchange is essentially facing a liquidity crisis…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Goldman Sachs’ effort to diffuse intensifying pressure over its commodity business by throwing open its metal warehouse doors likely comes too late to head off further scrutiny of Wall Street’s commodity trade.
Two weeks of escalating criticism of banks that own commodity assets and trade raw materials has shaken executives and the industry, with little sign of the pressure relenting. Britain’s financial watchdog is considering its own investigation of metals warehouses, sources said, and two lawmakers questioned whether power regulators were tough enough…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Slowly but steadily, the South African rand weakened by more than 1% to the dollar in sync with most other emerging-market currencies that were little match to the dollar’s strength. The dollar gained 1.2% on the rand at ZAR9.9817 on the data, according to CQG data.
Market participants once again were focused on global factors Thursday, as all eyes turned to the European Central Bank. But the dovish comment on the prospects of Europe’s recovery and better-than-expected U.S. manufacturing and jobless data, were enough to make most market participants expect the dollar to make more gains…………………………………..Full Article: Source

Posted on 02 August 2013 by VRS |  Email |Print

Brazil’s central bank sold 30,000 currency swaps to alleviate a critical dollar shortage that has driven the real to four-year lows in recent sessions.
The real has been the worst-performing emerging market currency, falling 12.4 per cent against the dollar this year, and the US currency on Wednesday briefly jumped above R$2.30 for the first time since May 2009…………………………………..Full Article: Source

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