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Commodities Briefing 28.Aug 2013

Posted on 28 August 2013 by VRS |  Email |Print

The decade-long commodity-price boom has come to an end, with serious implications for global GDP growth. And, although economic patterns do not reproduce themselves exactly, the end of the upward phase of the commodity super-cycle that the world has experienced since the early 2000’s dims developing countries’ prospects for continued rapid catch-up to advanced-country income levels.
Over the year ending in July, The Economist’s commodity-price index fell by 16.5% in dollar terms (22.4% in euros) with metal prices falling for more than two years since peaking in early 2011………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Things are still good in the U.S. farm belt. On Tuesday, the Department of Agriculture said it expects net farm income this year to reach $120.6 billion, a jump of 6% from 2012 and the second highest since 1973 on an inflation-adjusted basis.
But the robust outlook comes with a caveat. Federal forecasters in their last outlook back in February predicted an even stronger 2013. Tuesday’s projection for net farm income was a more than 6% decline from that earlier forecast………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Over the past few months, investors have seen better economic data coming out of Europe. Consumer confidence in the continent has been rising, manufacturing data is improving and the fiscal situation is on the mend. Now, China appears to be strengthening as well, which could signal better times ahead – U.S. Global Investors.
Below are five charts that I believe look bullish for China and commodities. While not meant to be comprehensive, they do point to areas where investors might want to pay close attention………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Crude oil prices jumped nearly 3 percent to an 18-month high on Tuesday, capping an increase of about 20 percent over the past two months as a result of scattered supply disruptions and rising anxiety about war and political instability in the Middle East.
The growing likelihood of a U.S.-led military response to reports of Syrian use of chemical weapons rattled markets, analysts said. The price of the U.S. benchmark crude oil, West Texas Intermediate, on the New York Mercantile Exchange closed at $109.01 a barrel for October delivery, up $3.09 from the day before and up from less than $95 in late June………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

As oil markets start to anticipate the prospect of U.S. military intervention in Syria, just how high prices will climb could be anyone’s guess, analysts say.
Brent crude oil prices hit a five-month high at about $111.68 a barrel on Monday after the U.S. government suggested it was moving towards a possible military response to last week’s suspected chemical attack in Syria………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Germany’s half-a-trillion-euro energy overhaul is forcing sector players to turn around their business models fast, giving smaller groups a head start on the country’s ponderous utilities.
Europe’s largest economy has seen its energy sector slide into crisis following its decision to abandon nuclear power by 2022, as a subsidised boom in solar power has dealt a heavy blow to traditional utilities, forcing them to close plants generating thousands of megawatts………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Gold has been rallying from its three-year low of just off $1,180 an ounce in June. On Friday, it closed at $1,378. What is driving this tentative recovery in the market for the “safe haven” metal? A key factor may be that the sell-off in exchange-traded funds backed by gold has passed its worst.
“Support has come from the financial market turmoil in emerging economies, geopolitical tension in Syria and Egypt, together with the fact that gold holdings in exchange-traded products has been stable for a couple of weeks,” says Ole Hansen, head of commodity strategy at Saxo Bank………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

There’s been a dramatic spike in the pro-gold coverage coming from the non-mainstream financial press, and while I in now way claim to know any better than they the future price direction of gold, I do think it a tad premature to be proclaiming decisively that gold has reversed course and will now head toward the $2,000 mark.
JP Morgan recently jumped on the “buy gold” bandwagon pointing to fundamentals in the end user segment driven by India’s annual wedding season demand boost. Hank Paulson’s announcement regarding his funds’ reduction in gold exchange traded holdings by half wasn’t enough to dampen the enthusiasm engendered by the JP Morgan tout and the ensuing message amplification by the plethora of bandwagoneers………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

One hallmark of a successful trader is knowing the time frame on which he or she is trading. In this respect, the long-term investor has it easier than the trader. There’s a certain peace of mind that an investor may find in buying a fund or issue that appears to have growth potential, and then sitting back and waiting for the investment to incubate. A trader has to approach the market with a different mindset.
The trader’s advantage, though, is that good trades will cover far more price movement than an investor can ever hope to see. However, it’s crucial to keep one’s trading practices consistent with the time frame………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

As gold bullion prices declined in the period from April to June of this year, so did silver prices. And just like gold bullion, the bullish case for the white metal’s prices continues to build.
Demand for the white precious metal is not just robust; it is rising. The chart below compares sales of silver coins at the U.S. Mint in the months of January to July of 2012 and 2013………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Copper price is losing touch with huge supply growth and cost of production. Spot copper prices are up nearly 10% since hitting near two-year lows lows at the end of July.
Sentiment in the industry has been buoyed by better economic news from China which accounts from more than 40% of global demand, a stronger US recovery and what appears to be the beginnings of a real turnaround in Europe………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Commodities have shown extreme weakness this year while many other sectors have held up quite well. However, recent trends in the space have been encouraging, as most commodities have rebounded from their lows or are even moving higher.
This is especially true with the industrial metals that have attracted investor interest in the past couple of weeks, leading to huge inflows. China, the major driver of industrial metals, is showing signs of stabilizing with strong trade data leading many to feel more bullish on the space………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

The Market Vectors Gold Miners ETF is already in the midst of a run that would make any other ETF envious. After bottoming in early July, GDX has surged 29.6% since July 5.
Not only has GDX been soaring, investors have been pouring significant amounts of capital into the ETF. On August 20, Street One Financial’s Paul Weisbruch said “Recent inflows to GDX have raised its asset base now to $5.6 billion, despite poor performance in both the trailing one year and trailing five year periods.” At the start of trading Monday, GDX had $7.4 billion in assets under management………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Hong Kong Exchanges & Clearing Ltd. said Tuesday it had appointed Garry Jones as the new chief executive of the London Metal Exchange, the venerable industrial metals bourse it acquired last year, which has been embroiled in a series of price-manipulation lawsuits.
Mr. Jones, a derivatives-market veteran who most recently led the rival NYSE Liffe commodities exchange, is expected to help lead the LME’s push into more lucrative commodities trading even as the 136-year-old institution battles accusations that it turned a blind eye to metal hoarding at exchange-registered warehouses aimed at pushing prices higher………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Tightening its noose around commodity exchanges in the aftermath of NSEL fisaco, the Forward Markets Commission (FMC) today issued a circular making CEOs more accountable to their board and the sector regulator.
FMC asked Managing Directors and/or CEOs of the commodity exchanges to furnish by September 2 if they were keeping their boards informed about the material developments and asked if expenditure incurred by them was approved by their boards………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Indian companies such as Whirlpool of India Ltd say they can’t plan more than a couple of months out as a fast-falling rupee currency drives up the cost of imports, forcing them to raise prices even as consumer spending crumbles.
The timing is particularly tough for consumer companies that were counting on India’s September-to-December holiday season to spur sales. India’s consumers, whose spending helped see the country through the global financial crisis in 2008, are closing their wallets, squeezing companies from carmakers to shampoo sellers………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Agriculture is central to Chinese and Brazilian development efforts – how trailblazing are their methods? China and Brazil have identified agriculture as central to their development efforts in Africa, confident in the belief that they can make valuable contributions based on their own agricultural success.
China trumpets its ability to feed 20% of the world’s population on roughly 10% of the world’s arable land, while Brazil can boast of agribusiness-led commercial production of soya bean and ethanol as well as its promotion of smaller-scale farming………………………………………..Full Article: Source

Posted on 28 August 2013 by VRS |  Email |Print

Bloomberg New Energy Finance says renewable energy will make up half of new Chinese power capacity in coming years. Greenhouse gas emissions from China’s energy industry are likely to peak in 2027 as renewable energy and gas play an increasingly dominant role in the country’s energy mix.
That is the conclusion of a major new report from Bloomberg New Energy Finance (BNEF) that predicts renewables, including large-scale hydroelectric projects, will contribute more than half of new capacity through to 2030 as the country’s total power generation more than doubles……………………………………….Full Article: Source

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