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Commodities Briefing 17.Sep 2013

Posted on 17 September 2013 by VRS |  Email |Print

Commodity prices haven’t responded positively to positive macro data in the absence of real recovery in demand, according to a weeky review by Barclays Research. “Recent price gains this year, in our view, have not been driven by demand at all, but rather by a combination of supply concerns (crude oil,tin) and short covering activity (copper, gold),” Barclays said.
Recent macro data across regions have been positive giving a more encouraging picture of global growth. Economic activity has picked up in China if July and August data is any indication. The Euro area composite PMI index rose to 51.5 in August-the highest in two years………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

The price of oil has followed the newsflow out of Syria closely. So, as the threat of U.S.-led military strikes has come and seemingly gone, crude is back pretty much exactly where it was before a chemical weapons attack was reported on Syrian civilians.
That was August 21. The oil price didn’t move much, though, even then, as Syria’s production had already dropped to negligible levels. But on August 27 the price began to move. international rhetoric had heated up, with Secretary of State John Kerry saying that the U.S. and its allies were considering military strikes on Syria after “undeniable” evidence of a chemical attack. Suddenly, talk was of regional contagion – into oil producers Iraq, Iran or Saudi Arabia………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

The US might be drowning in oil, but the world is still dependent on Saudi Arabia. Indeed, Saudi Arabia is pumping out more crude than at any time since at least the 1970s. In neighbouring Kuwait and the United Arab Emirates meanwhile, oil production levels hit record highs.
These numbers reflect a profound but easily overlooked trend in the global oil market. In spite of the shale oil revolution in the US, the world has become, if anything, more dependent on a handful of Gulf producers to fill supply shortfalls elsewhere………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Addressing IRGC commanders on September 16, Iranian president Hassan Rouhani announced that the country’s crude oil exports have dropped to below one million barrels per day (bpd). Meanwhile, OPEC has recently released its September report, which includes information about Iran’s crude oil output. This is the first report of Iran’s Oil Ministry to OPEC in Rouhani administration.
Based on Iran’s Oil Ministry data (direct communication), OPEC has said that Iran produced 3.717 million bpd in August. But, OPEC’s own assessment (secondary sources) puts the figure at 2.683 million bpd, ranking Iran as the fifth leading producer in OPEC………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

International oil companies are counting the cost of months of unrest in Libya that have reduced the country’s production to a trickle and cast renewed doubt on the attractiveness of the north African country for investment.
Militias and striking workers have combined to close a series of export terminals and oilfields, cutting output from 1.4m barrels a day at the start of the year, to less than 200,000 b/d today, according to analysts………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Gold prices are likely to contract further in 2014, after tumbling for the first time in more than a decade this year with the case for bullion undone by confidence in a stabilising global economy, a metals consultancy said on Thursday. In an update to its Gold Survey 2013, Thomson Reuters GFMS said the market could beat a retreat below $1,300 towards the end of 2014 as US monetary stimulus is withdrawn, fuelling talk of rising interest rates.
The consultancy expects prices to average $1,350 next year, down 7 percent from $1,446 in 2013, with support seen between $1,200 and $1,250. Markets are widely tipping the US Federal Reserve to start tapering its $85 billion monthly bond-buying as early as this month………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Gold traded funds, with their day-to-day transparency, became an “increasingly important price maker, rather than a price taker,” during the first half of 2013, according to Rhona O’Connell, Head of Metals Research and Forecasting at Thomson Reuters. as the market responded to bearish external financial forces.
In the “Gold Survey 2013 – Update 1” report, published by Thomson Reuters GFMS, O’Connell said that demand on gold “exploded in April after a particularly nasty price fall, with gold shedding over $240 or almost 16% in three trading days in mid-month.”……………………………………….Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Here is an interesting fact; at the end of this December gold only has to close above $1675.21 (its last closing price for 2012), for it to see thirteen consecutive up years. Assuming a current gold price of $1320, gold has only to advance about 27% at the end of December for 2013 to be gold’s thirteenth up year in the table above.
With the better part of four months left in 2013 gold could easily accomplish this. But even if 2013 proves to be the first down year for gold since 2001, this would be no reason to become bearish on gold. After all, in the first twelve years of the Dow Jones’ 1982-2000 bull market it saw three down years: 1984, 1990 & 1992 without Wall Street becoming bearish on the stock market. Predictability, Wall Street has been bearish on gold and silver since Alan Greenspan became Chairman of the fed in the late 1980s, so they would probably make a big deal of gold seeing 2013 as a down year, but we should not. (Press Release)

Posted on 17 September 2013 by VRS |  Email |Print

An unlikely saviour appears to have arrived on the horizon for the country’s beleaguered gold industry, battered by import duty restrictions. India goes to the polls in 2014. With the main opposition party, the Bharatiya Janata Party (BJP) announcing Gujarat chief minister Narendra Modi’s name as the party’s prime ministerial candidate, jewellers from across the country, diamond retailers and bullion traders are all lining up to pledge their support Modi.
Though India has recorded three decades of reasonable growth under the Congress led government, the question doing the rounds is whether the model has run out of steam………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

The silver and gold market has been rife with speculation about ongoing price manipulation. Most investors are now familiar with this concept, and even the mainstream has admitted that undue market influence has occurred.
Nevertheless, ending this unfortunate fact of life for precious metal investors and allowing prices to rise to their fair value would probably create a U.S. dollar panic. Furthermore, terminating precious metal market manipulation by officials — such as the CFTC for example — is virtually impossible because they would be incriminating themselves………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

With all this talk of war and tapering, it might be time to step back and look more at forces outside of human control and their impact on precious metal prices. In 2008 Brian Lucey looked at the influence lunar cycles have on gold, silver and platinum prices. This may seem unusual, but as we explained on Wednesday, there is a vast amount of research carried out that looks at the impact of moods and other such changes on equity prices.
Every week we look to the next central bank meeting or the next data release, each of us doing so in an attempt to gain some understanding of how the gold and silver price might react………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Late summer saw, to the relief of some investors, some price improvements in precious metals and precious metals stocks. We asked Sprott USA Holdings Chairman Rick Rule if he thought this might indicate that we’ve seen the bottom in this sector.
“There’s a key element still missing from the picture,” Rick stated in a recent update to investors. “In past bear markets in natural resources, we witnessed a wave of capitulation selling that marked the end of the bear market. That capitulation allowed the next bull market phase to begin. And we haven’t seen that kind of capitulation occur in this market.”……………………………………….Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Strong fundamentals, deficit forecast based on International Lead Zinc Group (ILZG) data could push LME lead prices to average $2350 per ton, according to a weekly report by Barclays Research.
Investors should use sub-$2100 movest to build long positions in line with sustained tightening of fundamentals, it added. LME/SHFE price ratio remains firmly at levels which weighs against importing concentrate despite relatively higher international market. Lead seems to be in deficit market as per ILZG data as well as visible stock trends, the report added………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Four miners has been expected to be picked up by a $6.4bn tracker fund. The conspicuous falls suffered by a clutch of precious metals miners today served to highlight the influence exchange-traded funds wield on the London stock market.
Silver and gold producer Fresnillo recorded the biggest drop in the FTSE 100 and slid 153p, or 12.8pc, to £10.45. In the FTSE 250, Hochschild Mining lost 38.6 to 237.4p, a 14pc fall; African Barrick Gold declined 20.3 to 143.9p and Polymetal International cheapened 50 to 659½p………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

UBS Global Asset Management has reduced the charges across its exchange traded funds (ETFs) range, as pricing pressures on ETFs escalate. The group has reduced fees on all of its A share class ETFs, effective from today, in some cases by as much as 25bps.
The largest price reduction was on the UBS MSCI Emerging Markets UCITS ETF, where the total expense ratio (TER) has been reduced from 0.7% to 0.45%. Pricing on the most popular ETFs, such as the S&P 500 ETF, has become more competitive as result, down from 0.25% to 0.2%, while the TER on both the MSCI USA and the FTSE 100 UCITS ETFs has been cut from 0.35% to 0.2%………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Exchange traded funds are a popular investment tool among many types of investors, including financial advisors, average retail traders and even large hedge funds.
Hedge funds are required to disclose their holdings on a quarterly 13F filing, and Meena Krishnamsetty for MarketWatch pointed out the top five ETF picks in the most recent filings. SPDR Gold Shares. 57 funds revealed a long position in GLD, the largest gold-related ETF on the market. ……………………………………….Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

The Forward Markets Commission (FMC) today widened the Risk Management Group to include a member each from Sebi, BSE and IFFCO, among others, as it tackles the growing challenges of risks associated with commodity futures trading after the NSEL crisis.
The Risk Management Group (RMG) was set up in February 2005 to assist the FMC in formulating risk management policies and guidelines for the commodities derivatives market. The group was last reconstituted in March 2007………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Nobody said it’s easy. In fact, when it comes to investing in commodity markets, people have said just the opposite. A novice to the world of futures recently put this spin on the matter: Trying to stay ahead of the volatile price fluctuations in commodities is like trying to tame a tornado.
So, how do you tame a tornado? Well, let’s just say you’re going to need a really wide net. And that net is Elliott wave analysis. Put simply, Elliott wave analysis stands above all other methods of forecasting financial markets: First, it is objective. Elliott analysis states that the main force driving price changes is the collective psychology of investors surrounding a specific market. This psychology unfolds in clear and observable Elliott wave patterns on price charts. ……………………………………….Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

Indonesia’s record current-account deficit will drive away foreign investors and add pressure on the rupiah, the worst-performing currency in Asia since the beginning of June, according to Nomura Holdings Inc.
The CHART OF THE DAY tracks Indonesia’s current-account balance as a percentage of gross domestic product and the rupiah versus the dollar. The currency has weakened 13.9 percent since the start of June, compared with the 10 percent drop in India’s rupee, to be the worst performer in Asia during the period………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

The world’s second-biggest economy has had its currency promoted to the most-traded currency club. The Chinese yuan is now traded three more times on global markets compared to its popularity in 2010, according to a new survey from the Bank for International Settlements.
How significant is the news for China - and the rest of us? Back in 2010 the BIS estimates that $34bn of Chinese yuan was traded every day. That figure now ticks closer to $120bn, propelling the yuan from 17th place to ninth place in 2013, kicking out the Swedish krona from the top ten en route………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

The Indian rupee touched a lifetime low of 68.85 against the US dollar on August 28, 2013. The rupee plunged by 3.7 percent on the day in its biggest single-day percentage fall in more than two decades. Since January 2013, the rupee has lost more than 20 percent of its value, the biggest loser among the Asian currencies.
There is no denying that India is not the only emerging market experiencing a rapid decline in its currency’s value. Several emerging market currencies are also experiencing sharp depreciation over the prospect of imminent tapering of the US Federal Reserve’s policy of quantitative easing (QE) program………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

European Union factories and power stations will be able to exchange United Nations carbon offsets for EU permits from February next year, even as the EU delayed a decision on the eligibility of some offsets.
The European Commission put back a verdict on how and when ineligible offsets from projects in developed countries will be set apart from eligible ones, the bloc’s regulator said today. It’s continuing to seek information on the validity of the projects supplying the credits, according to its website………………………………………..Full Article: Source

Posted on 17 September 2013 by VRS |  Email |Print

As newly elected Australian Prime Minister Tony Abbott prepares to be sworn into office this week, opponents of his plan to abolish the so-called carbon tax on greenhouse gas emissions are preparing for political battle.
Abbott, who during the election campaign vowed to end the carbon tax, officially known as the Carbon Pricing Mechanism (CPM), has said the issue will be his first priority after taking office………………………………………..Full Article: Source

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