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Commodities Briefing 19.Aug 2013

Posted on 19 August 2013 by VRS |  Email |Print

Egypt is a key bottleneck in the global oil industry. Should the current turmoil in the North African country get any worse, a potential oil spike could damage any nascent economic recovery.
After last week’s bloody crackdown by the Egyptian army, fears of a disruption of oil supplies to the West have boosted the oil price. Brent crude prices were propelled to a four-month high of $111.23 on Thursday. If the turmoil gets worse – or unrest spreads to other countries – the risk premium currently factored into the price of crude is likely to increase further………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Saudi Arabia, the world’s largest oil exporter, shipped less crude in June and exports also slid in fellow OPEC members Iraq, Kuwait and Nigeria, according to official data.
The kingdom delivered 7.32 million barrels a day, down from 7.79 million in May, according to figures the governments filed with the Joint Organizations Data Initiative. Daily Saudi production fell by 20,000 barrels in June to 9.64 million………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Research conducted by marketing communications consultancy Orient Planet shows that upcoming upheavals to the international oil supply chain will significantly impact the global economy and oil security. These movements, however, will not be enough to displace the Middle East as a global leader in oil in particular and energy in general.
Aside from having the largest proven crude oil reserves in the world (66% of reserves of OPEC members), the region enjoys close proximity to, and strong economic and cultural ties with, oil-hungry markets such as China and India. China alone is projected to account for half of global oil demand growth in the next five years………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

While the International Energy Agency (IEA) has some laudable goals, such as promoting energy security and economic development, it needs to be de-politicized away from environmental activism. It also needs to improve the rigor in some of its reporting. The IEA doesn’t come cheap, however, with a 2012 budget of over $35 million funded by its 28 member-states — including the USA.
Some of the IEA’s recommendations are ridiculous. A year ago, it released a report proposing so-called “required” clean energy spending targets in order to avoid catastrophic anthropogenic climate change………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Speculators cut bullish and bearish bets on gold simultaneously for the first time in two months as prices advanced to the highest since mid-June on signs of strengthening physical demand.
The net-bullish position rose 18 percent to 56,604 futures and options by Aug. 13, as the 17 percent contraction in short bets exceeded the 3 percent drop in long wagers, U.S. Commodity Futures Trading Commission data show………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Gold rose to a two-month high after holdings in the largest exchange-traded product posted the first weekly expansion this year. Silver headed for the longest rally since March 2008.
Spot gold gained as much as 0.6 percent to $1,384.55 an ounce, the highest since June 18, and traded at $1,382.45 at 10:05 a.m. in Singapore. Silver added 1.6 percent to $23.6225 an ounce, the highest since May 14, after entering a bull market last week………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Gold jumped 5% last week, booking its best week in over a month. This is a respectable move for an asset that many consider to be a worthless yellow metal.
“It’s not so much that people don’t like gold anymore—it’s that they hate it,” wrote strategist Dylan Grice in the July Edelweiss Journal. “Of course, this makes gold more interesting than it has been in many years. There is blood on the streets.” Indeed, factors like a reversal of poor sentiment and upward pressure from short covering may be propelling a short-term rally………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Gold bar and coin investment grew by 78% globally in April-June 2013 compared to the same quarter last year, topping 500t in a quarter for the first time, said the latest World Gold Council Gold Demand Trends report.
In China, demand for gold bars and coins surged 157% compared with the same quarter last year, while in India it jumped 116% to a record 122t. Taking jewellery demand and bar and coin investment together, global consumer demand totalled 1,083t in the quarter, 53% higher than a year ago………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

There is no denying that it has been a really tough year for silver investors with silver dropping from $32.23 in January to a yearly low of $18.61 in June. Is the silver price correction finally over? The ridiculously low price of silver has resulted in a strong surge of demand worldwide and the price of silver has soared by 23% since the June low.
No one knows if the three year bear market in silver is finally over but investors seem to have made up their minds that the current price of silver is at give away levels. The World Gold Council reported last week that bar and coin purchases rose to record levels last quarter………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Many observers have realized that the price of silver will rise dramatically at some point because the amount of paper silver is many times the amount of physical silver. When this fact is even partially acknowledged by the mainstream, silver will probably move much higher.
Furthermore, silver has historically been a real money substitute for paper fiat currency. The governments of the world cannot afford to allow silver’s price to rise on the perception that people are losing confidence in their country’s paper fiat currency………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

There have been a number of factors buoying up precious metals prices of late, although a number of observers do warn that we could yet see prices fall back again which would likely negate the benefits. In particular markets are thin at this time of year with many northern hemisphere traders and fund managers away on their summer holidays, which can substantially increase volatility.
It may only see another suggestion from a member of the U.S. Fed’s open market committee suggesting some tapering of the bond buying programme is imminent, to drive prices down again………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

After a gut wrenching correction that drove gold and silver prices down 38% and 63% respectively from their 2011 highs, the recent price action in precious metals has been dramatic. From the low on June 28th, gold bullion has appreciated by more than 11%, but the real fireworks have been seen in gold mining equities with the NYSE Arca Gold Bugs Index up close to 20% and the junior miners, as measured by the Market Vectors Junior Gold Miner ETF, up a stunning 33%!
Silver has joined the party, increasing by 17% over the same time period and silver stocks as measured by the MSCI Silver Index are up 28% to August 16………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Gold’s been extra volatile lately and all the investment vehicles linked or associated with it — from silver to metals-mining equities to exchange-traded funds have been confusing the heck out of investors. Here’s what you need to know.
Gold prices are poised for their first yearly loss in more than a decade, around 19%, but they may have bottomed out in the past month or so. Silver has significantly outperformed the yellow metal this month — it’s up almost 17% compared with gold’s nearly 4% gain………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

The market has flattened out near its highs, prompting many investors to start to wonder when the next correction will set in. We have yet to see a meaningful pullback this year, despite the omnipresent headlines warning of “The Hindenberg Omen” and “1987-Style Crash.”
With those premonitions in mind, I have been looking for innovative ETF strategies that allow you to participate in this market with less risk………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

The Australian exchange traded fund (ETF) industry has swelled to a record high, breaching the $8 billion mark for the first time, according to data from ETF provider BetaShares.
The total market capitalisation of the low cost index products traded on the Australian Securities Exchange (ASX) reached a total of $8.25 billion in July. Market movement was attributable for 8.1% or $618 million of the growth while a further $162 million came from capital inflows………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

The Japan Exchange Group – created by the $1.7 billion merger of the Tokyo Stock Exchange and the Osaka Securities Exchange in January – is planning to boost its derivatives volumes by almost 50% within two years and revive trading in the local commodities market.
It has laid out plans to capitalise on its increased size and scale and, according to its post-merger business plan, become “a top-class Asian derivatives market”………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Indian policymakers are looking increasingly panicky as they battle the worst currency crisis in more than two decades, and more worryingly there is no sign their remedies are working. The rupee lurched to a new lifetime low of 62.03 to the dollar on Friday while the benchmark share index posted its biggest one-day fall since September 2011.
“None of the policymakers’ Band-Aid measures (from capital controls to tightening liquidity) seems to be working. They have not been able to turn the tide,” Rajeev Malik, economist at investment house CLSA, told AFP. “The government and the Reserve Bank of India are taking fire-fighting measures.”……………………………………….Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

The Kenyan government plans to introduce new currency in 2015 as required by the new constitution which is against the use of an individual’s picture on Kenyan money. Secretary to the Cabinet Francis Kimemia said Sunday that the Cabinet approved the proposal that is set to be ready earliest February-May 2015.
“New currency with our country’s heritage as its key features will be unveiled in the next two years,” Kimemia said, adding that the Cabinet has also approved symbols to appear on the currency, colors and sizes will be unveiled to the public soon.”……………………………………….Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Controversial crypto currency Bitcoin has gained further traction after the German federal government officially recognised it as a currency. The federal authorities declared Bitcoin an accountable unit that can be used as a means of private exchange multilaterally, reported the Frankfurter Allgemeine Zeitung newspaper.
This now means Bitcoin commercial trading gains and value appreciation are now subject to a withholding tax of 25 per cent in Germany. The digital cryptographic currency is increasingly appearing on authorities’ radars………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Both main parties agree we need to cut greenhouse gas emissions. But which approach is better: Labor’s carbon price or the Liberals’ direct action? First, Tony Abbott predicted the carbon tax could “wipe out” Whyalla. Then he envisaged it squeezing the life out of the economy, like a python. The political rhetoric has been colourful, to say the least, but the Coalition and Labor actually share a quiet consensus on climate change.
Both parties have committed to unconditionally cutting Australia’s greenhouse gas emissions by 5 per cent below 2000 levels by 2020. And both say they will increase the target to 15 or 25 per cent depending on international climate action………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

Uncertainty over the future of the carbon scheme has adversely affected investment decisions in nearly one in two companies generally, and about 80 per cent in the clean energy sector. A survey of 181 companies by energy ­consultants Aecom also found nearly two-thirds of clean energy companies have delayed hiring new staff; in other industries 14 per cent have put off new hires.
The release of the survey – commissioned by Business for Clean Economy – comes as Opposition Leader Tony Abbott cast doubt on the Coalition’s commitment to meeting the bipartisan 2020 target of cutting emissions by 5 per cent on 2020 levels………………………………………..Full Article: Source

Posted on 19 August 2013 by VRS |  Email |Print

It was announced recently that NYSE Euronext had achieved carbon-neutralityfor the third year in a row, the only global exchange that can claim that designation. (see how they did it:carbon-neutral-2012 ).
While impressive, it seems quaint and out of place as environmental responsibility does not seem to have the same cache as it did a few years ago. It made me think of the first time I interviewed Richard Sandor, the inventor of interest rate futures and emissions trading………………………………………..Full Article: Source

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