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Commodities Briefing 23.Sep 2013

Posted on 23 September 2013 by VRS |  Email |Print

As widely expected, the big news last week was about FOMC meeting and anticipated start to tapering of asset purchase; but as it turned out, it was a big surprise with the Fed’s unexpected decision to stick to its $85 billion a month stimulus programme.
It proved to be a positive boost to commodity markets with price gains virtually across the board. There was huge short-covering rally. Precious metals were the biggest beneficiaries. Base metals followed suit, while crude made modest gains. The US dollar weakened………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

Last week, the Federal Reserve declined to start the “tapering” of its quantitative easing (QE) effort. Contrary to widespread expectations, the US central bank kept its bond purchases steady at $85bn (£53bn) a month.
Commodities traders embraced the moves. Gold prices rallied in the wake of the Wednesday announcement, with the yellow metal jumping 4.1pc to $1,364 an ounce, its biggest gain in over a year. Silver rose even more strongly, by 5.5pc………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

Production from legacy oil wells is declining each year. At the same time, demand from emerging markets is rising rapidly. When those two things collide, it leaves a production gap of 390 billion barrels of oil that energy companies need to make up between now and 2035.
Just to put that number into some perspective, current U.S. proven oil reserves, which are 12th in the world, were just 29 billion at last count. That means the world’s oil companies have a lot of work to do if they want to add enough production to both offset declines while meeting growing demand. The following slide shows our current conundrum………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

China’s appetite for coal, once seemingly unlimited, is starting to wane, and the effects are rippling far from the Middle Kingdom. With the world’s second-largest economy, China in recent years has been driving demand for all sorts of commodities, especially thermal coal, which is used to fuel power plants.
But now economic growth in China is slowing, and rising public anger over air pollution is increasing pressure on utilities running the country’s coal-burning power plants to shift to nuclear power and natural gas………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

Hedge funds cut bullish gold bets for a second week, reducing long contracts to the lowest since June, before prices rose the most in a month as the Federal Reserve unexpectedly decided not to taper stimulus.
The net-long position held by speculators fell 17 percent to 70,113 futures and options in the week ended Sept. 17, U.S. Commodity Futures Trading Commission data show. Long wagers fell 6.8 percent to 109,217, the fewest since June 25, and short bets rose 21 percent………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

Goldman Sachs (GS) created a stir earlier this week when it forecasted that gold would fall to $1,000 an ounce by the end of 2014, as the firm expected the Federal Reserve to reduce its bond buying program. Goldman also suggested that gold miners might want to hedge their output, locking in 2013 prices.
HSBC analysts have also been bearish on gold, although the firm admits that lower gold prices tend to draw out tremendous demand from emerging markets, especially China. Because of that demand, HSBC believes gold will end 2014 at around $1,435 an ounce, says MarketWatch………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

After peaking at $1,900 an ounce in August 2011, gold prices tumbled to $1,181 an ounce in June as the economy improved, inflation stayed low and investors worried less about finding a safe haven for their money. Prices had rebounded to $1,307 an ounce by Wednesday, but that was still 31.2 percent below 2011’s high.
To say Nevada’s miners are a little nervous would be like saying refined gold bars are kind of shiny. “The bear market has lasted longer than many people expected. In the last couple of years, a lot of companies have been treading water, holding their claims and hoping prices go up and allow them to raise capital for exploration,” said Mike Visher, deputy administrator of the Nevada Division of Administrators. “This is not a good time for weak stomachs.”……………………………….Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

The Guardian and Telegraph report that gold and silver prices are “fixed” in the same way as interest rates and derivatives - in daily conference calls by the powers-that-be. Long-time trader Andrew Maguire told told King World News this week that 2 JP Morgan whistleblowers have handed over evidence of gold and silver manipulation by their bank:
Very recently [Commodities Futures Trading] Commissioner Chilton assured me, and I’m going to quote him exactly, “I can’t appropriately express my frustration and disappointment with how we’ve handled the silver investigation……………………………….Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

In a little more than two weeks, Alcoa Inc. (AA) will report third-quarter results, and there is every reason to believe that those results will not be pretty. The consensus estimates call for earnings per share of $0.06 on sales of $5.74 billion. The earnings estimate has been cut in half over the past three months, and if comments today by another aluminum miner are any guide, the estimates for Alcoa are optimistic.
A senior executive of the world’s largest aluminum producer, Russia’s Rusal, has said that 40% of global aluminum production is unsustainable at current prices. From around $1,900 per metric ton (tonne) a year ago, the price today is about $1,830………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

After a statement from US Federal Reserve on its monetary stimulus, now copper investors are eyeing on copper fundamentals which are look weak and are likely to pressurise the base metal prices later this year.
Copper prices recorded a jump than any other base metal last week after a statement from the US Federal Reserve said that it will continue with its existing monetary stimulus till the economy backs to its solid growth path. The statement fuelled short covering in the base metal and caused a significant up-tick………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 130 million tonnes (Mt) in August 2013, an increase of 5.2% compared to August 2012.
China’s crude steel production for August 2013 was 66.3 Mt, up by 12.8% compared to August 2012. Elsewhere in Asia, Japan produced 9.1Mt of crude steel in August 2013, a decrease of -0.6% over August 2012. South Korea’s crude steel production was 5.6 Mt in August 2013, down by -13.1% on August 2012………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

India is considering late-evening trading in commodities such as sugar and soybeans to increase market participation, Ramesh Abhishek, chairman of the Forward Markets Commission (FMC), told reporters on Sunday.
Late trading is currently allowed only in metals and energy products, where prices follow global markets. In agriculture commodities, futures trading currently takes place between 10 a.m. and 5 p.m. “We are discussing with exchanges and other trade participants how we can start late-evening trading in agriculture commodities as some spot markets remain open till 8 p.m.,” Abhishek told reporters on the sidelines of a conference………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

Consumers from California to Switzerland are developing a taste for dark chocolate, taking a bite out of global cocoa supplies and driving up candy prices in both high-end boutiques and mass-market drugstores.
The cost of one kilogram of chocolate in the U.S. is expected to hit a record $12.25 this year, a 45% increase from 2007, according to market-research firm Euromonitor International………………………………..Full Article: Source

Posted on 23 September 2013 by VRS |  Email |Print

The world’s biggest foreign-exchange traders say it’s time to buy Asian currencies as outflows from the region ebb and the Federal Reserve’s decision to maintain record stimulus helps reverse a four-month slide.
The Bloomberg-JPMorgan Asia Dollar Index has risen 1.4 percent since Aug. 30, set for the best month since September 2012. Investors pumped US$1.4 billion into equity funds in Asian emerging markets in the week ended Sept. 18, the second straight period of inflows, according to EPFR Global data………………………………..Full Article: Source

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