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Commodities Briefing 16.Aug 2013

Posted on 16 August 2013 by VRS |  Email |Print

The deepening relationship between America’s judicial system and its biggest banks has reached the world of metals. The Commodities Futures Trading Commission (CFTC) has reportedly issued subpoenas to Goldman Sachs, JPMorgan Chase and others as it investigates complaints that banks and other owners of metals warehouses have been hoarding metals and driving up prices.
Private class-action suits filed in federal courts spanning New York, Michigan, Louisiana and Florida have made similar price-fixing allegations, which the banks vigorously deny………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

The slowing Chinese economy will continue to weigh on commodity markets as the Asian nation is forced to adjust to the next phase of the commodity price cycle along with other countries, a new report says.
The inaugural China Resources Quarterly, compiled by the Bureau of Resources and Energy Economics (BREE) and Westpac Institutional Bank (Westpac) covers the June quarter and shows the Chinese economy grew at a rate slightly below its potential in the first half of 2013. Overall activity was supressed by external headwinds and a less accommodative policy, which saw data out of China generally seen as underwhelming, the report said………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

Brent oil prices climbed above $111 a barrel to a four-month high on Thursday on fears violence in Egypt could affect the Suez Canal or spread in the Middle East, where supplies are already disrupted.
Egypt’s government declared a state of emergency on Wednesday following deadly clashes between riot police and supporters of ousted President Mohamed Mursi………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

On the verge of civil war and total collapse, Iraq’s oil exports are stagnating and the first half of this year has seen the Iraqis come up almost 30% short of planned exports of crude from Kirkuk—but never underestimate the power of massive oil reserves to withstand conflict.
For now, Iraq is producing 3.25 million barrels a day, compared with 2.9 million barrels at the same time last year, with Kirkuk exports slumping due to sabotage and politics. But a new supergiant field coming on line and other start-ups eyeing increased production paint a more optimistic picture in the near-term………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will reduce shipments this month while refiners in the U.S. and Europe conduct seasonal maintenance, tanker-tracker Oil Movements said.
The group, which supplies about 40 percent of the world’s oil, will cut exports by 190,000 barrels a day, or 0.8 percent, to about 23.7 million barrels a day in the four weeks to Aug. 31 from the period to Aug. 3, the researcher said today in an e-mailed report. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

Gold demand hit a four-year low in the second quarter, despite surging appetite for jewellery, coins and bars, as investors exited bullion funds and central bank buying more than halved, the World Gold Council said.
Lower prices following a selloff in April, when spot gold dropped $200 an ounce in two days in its sharpest slide in 30 years, and another retracement in June sent bar and coin demand to record highs and jewellery buying to its strongest in nearly five years………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

Gold demand for jewelry fabrication in the second quarter surged to its highest level in five years as a sharp drop in the price of gold was “met with a very positive reception across the globe,” the World Gold Council said Thursday.
Gold jewelry demand by volume increased 37 percent to 575.5 tons, according to the WGC’s Gold Demand Trend report for the second quarter of 2013. The demand for gold jewelry was so great that it far outweighed the decline in the average gold price as the demand in terms of value rose 20 percent to nearly $26.2 billion, the fourth highest on record………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

I firmly believe that we reached the bottom on June 28th and that gold should double from that bottom within the next 12 months. So by next summer, I think that the price of gold will have made new highs and stand around $2,400 per ounce.
Given my outlook on gold prices, this sector will be explosive. The continuation of the gold bull market will lead the junior gold mining stocks higher by many hundreds of per cents, just like it did during the 2008 recovery. By the way, since hitting the bottom on June 28, gold has rebounded by 12 per cent while gold miners have gone up by about 25 per cent………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

The price of gold has been falling amid expectations of a US economic recovery and a stronger dollar. Domestically, too, gold prices have been falling. And this trend will continue for some time more, analysts said.
“Gold prices are under pressure and trading in range of $1,270 (Rs 77,470) to $1,350 (Rs 82,350) on speculation that the US Federal Reserve will start tapering its bond buying programme from September,” said Renisha Chainani, commodity analyst, Edelweiss Financial Services……………………………………….Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

The vertiginous recent fall in the price of silver means there is a good chance the metal will soon bounce back strongly, a market researcher has argued. The past six months have been weak for most precious metals, with the aggregated S&P GSCI Precious Metal index losing a fifth of its value. Silver has been even softer, though, plummeting by 29 per cent through the period.
For Mike McGlone, research director at ETF Securities, this represents ‘a potentially attractive entry level’ given that the metal ‘may have corrected too far and is poised for future growth’………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

In our previous essay we focused on silver’s relationship with the general stock market. Today, we think it would be interesting to revisit the silver-to-gold ratio. However, before we do that, let’s check the recent price action in silver and gold.
Silver posted biggest six-day gains in 2 years. Today, in pre-market trading, the white metal climbed up once again and reached the highest level in a month as holdings in the world’s largest silver-backed exchange-traded fund, the iShares Silver Trust (SLV ETF), rose to a four-month high………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

Of the many markets that I follow, gold bullion has seen the most significant shift in investor sentiment over the past year. From exuberance last fall to pessimism in late June, gold bullion has been nothing short of a roller coaster ride.
Because commodities can have such violent swings in investor sentiment, it’s important to look at several factors when making an investment decision. The more potentially positive factors you have behind an investment thesis, the greater the likelihood of success……………………………………….Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

Gold heads east as western investors sell their stocks - sparking a jewellery and bullion buying frenzy in Asia. Stocks of physical gold crossed continents in the first half of 2013 as Westerners dumped their holdings and, on the other side of the world, the resulting fall in price sent consumers flocking to jewellers and bullion dealers.
Indian, Chinese, Thai and other Asian consumers flocked to jewellers and bullion dealers to build their holdings………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

The hedge fund run by John Paulson, one of the world’s highest-profile gold bulls, has sold more than half its shares in the largest exchange traded fund backed by the metal, according to a regulatory filing.
However, Paulson & Co offset much of its sale of about 1.1m ounces of bullion held in SPDR Gold Shares in the second quarter by buying gold swaps on the over-the-counter market, according to a person familiar with the matter………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

The iShares Silver Trust and the ETFS Physical Silver Shares have endured miserable performances this year as each is down 28.2%. That is a year-to-date statistic and that is important to note because silver bulls are finally getting some relief as the white metal has set a scorching pace since the start of the third quarter.
Since the start of July, SLV and SIVR have each surged 11.2%. In the past month, the returns for each are 9.2% as investor sentiment toward the white metal has improved. Physical demand for silver remains robust and that could serve as a catalyst for further upside for SLV and SIVR………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

Metal buyers watch the fundamentals of supply and demand, they try to balance what they read about the market against macroeconomic news to get a sense of where they think the markets are going. Yet while the media reports copper’s price falls as a loss of faith by investors, the reality is they are being influenced by the same supply and demand judgments used by buyers.
But when investors move en masse, the market moves with them – and so it is with copper. According to an article in the FT, investors’ holdings of commodities fell by a record $63 billion in the second quarter, surpassing even the drop seen at the height of the 2008 financial crisis, the paper quotes Barclays as saying………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

A handful of African countries are setting up commodity exchanges in an effort to develop agricultural markets and improve food security. Are they the key to Africa’s agricultural growth? When Ethiopia set up its now famous commodity exchange in 2008, few foresaw the ripple effect it would generate – least of all its founders.
But in five years, the Ethiopian Commodity Exchange (ECX) has convinced stakeholders that bourses can improve food security in Africa, and has catalysed global dialogue about the development of agricultural marketplaces across the continent. Other countries are now looking to set up their own exchanges………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

The Australian dollar rose against most currencies in Thursday’s Asian session as commodity prices continued to recover on the back of recent signs of economic improvement in China, Europe and the U.S.
Late Wednesday, the Aussie was trading at US$0.9168, compared with US$0.9106 late Wednesday. In the latest positive sign, Wednesday’s second-quarter GDP data from the euro zone showed the region emerged from a six-quarter-long recession………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

After beginning lower, most commodities prices reversed course on Thursday when the dollar turned downward, with natural gas, corn, and gold rallying well over 2 percent, silver jumping more than 5 percent and oil hitting a four-month high.
Crude oil prices rose on both sides of the Atlantic, with Brent prices hit a four-month high on fears that escalating violence in Egypt could affect the Suez Canal or spread across the Middle East, where supplies already face disruptions. Front-month September Brent, which expired on Thursday, settled 91 cents higher at $111.11 a barrel, after hitting its highest since April 2. More-active October oil was up 78 cents at $109.60………………………………………..Full Article: Source

Posted on 16 August 2013 by VRS |  Email |Print

The US government is planning to use the Environmental Protection Agency to combat climate change, in a move that could create new opportunities for carbon traders, according to lawyers and analysts.
Proponents of carbon trading schemes in the US have often felt like a bride jilted at the altar. In 2009, they were flush with optimism after the House of Representatives passed the Waxman-Markey Bill, which would have established a federal cap-and-trade programme to reduce carbon emissions, but their hopes were crushed when the bill failed to pass the Senate………………………………………..Full Article: Source

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