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Commodities Briefing 08.Oct 2013

Posted on 08 October 2013 by VRS |  Email |Print

Broad commodity exchange-traded products (ETPs) returned to favour in the third quarter, attracting some $712 million according to BlackRock data, as investors sought out assets thought likely to benefit from a pick up in economic growth.
Equity ETPs also continued to do well, capturing some $28.7 billion in September, whilst fixed income ETP inflows totalled $6.6 billion. Overall, global ETP inflows reached $35 billion in September. But money continued to bleed from gold ETPs, which racked up $1.2 billion in outflows in September, taking third-quarter redemptions to $4.4 billion. This was despite the U.S. Federal Reserve’s surprise announcement in mid-September that it would continue with its bond-buying programme………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

After a decade of blistering growth, global commodity prices have generally been declining since 2012, and the financial sector has begun withdrawing its sizable investments from commodities markets, according to a new economic report by Washington, D.C.,-based Worldwatch Institute.
However, the independent research organization’s report finds agricultural goods have fared better than most other commodity classes. Though commodities traded on public exchanges saw a combined 6 percent decrease in prices during 2012, agriculture — helped by limited supplies due to a severe drought — energy and precious metals were the exceptions, making price gains, according to the report………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

The ongoing risk to the US and possibly also the global economy from the US government shutdown and wrangling over the debt limit has caused a great deal of nervous trading in commodities. A potential economic slowdown at a time where supplies have begun to recover among many key commodities triggered price weakness across most sectors.
The declines were mostly felt in the metals sector — mainly industrial metals but somewhat surprisingly also in precious metals. Meanwhile, the energy sector did reasonably well as supply tightness, following several months of supply disruptions, kept the price of both crude oils (WTI and Brent) supported………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

The International Energy Agency tweeted this chart about electricity trends to 2035. Not that surprisingly, it shows renewables and natural gas really taking off, with renewables surpassing natural gas as source of power over the next couple of years. By 2035, renewables will be giving coal a run for the money.
What surprised us, however, was the coal’s durability. It will remain the top fuel for generating electricity for the next 20 years, with growth in coal-fired power in emerging markets outweighing its decline in rich countries, the IEA said………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

The political gridlock in Washington has produced some interesting shutdowns as Congressional Republicans and Democrats sling charges of responsibility. Want to visit the Lincoln Memorial? Forget it. The U.S. Export Import Bank website? Also closed.
But some elements of the U.S. Department of Energy are doggedly soldering on, including some bureaucrats in the Energy Information Administration, who on Friday produced an article in its “Today in Energy” column with the simple but arresting headline, “U.S. expected to be largest producer of petroleum and natural gas hydrocarbons in 2013.”……………………………………….Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

One of the major events recent was the first US government shutdown in 17 years. Light crude dropped to a new monthly low at $101.05 on concerns that this event would reduce demand for black gold in the world’s largest oil consumer market. In the previous week, the yellow metal also declined and dropped below $1,300 per ounce.
Despite these declines, on Wednesday, both commodities rebounded sharply supported by a weaker US dollar as commodities priced in the greenback became less expensive for holders of other currencies. Additionally, in the second half of the previous week, there was similar price action in both cases………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

One of the major events recent was the first US government shutdown in 17 years. Light crude dropped to a new monthly low at $101.05 on concerns that this event would reduce demand for black gold in the world’s largest oil consumer market. In the previous week, the yellow metal also declined and dropped below $1,300 per ounce.
Despite these declines, on Wednesday, both commodities rebounded sharply supported by a weaker US dollar as commodities priced in the greenback became less expensive for holders of other currencies. Additionally, in the second half of the previous week, there was similar price action in both cases………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

One of the main events of recent days was the first U.S. government shutdown in 17 years. Light crude dropped to a new monthly low at $101.05 on concerns that this event would reduce demand for black gold in the world’s largest oil consumer market. In the previous week, the yellow metal also declined and dropped below $1,300 an ounce.
Despite this declines, on Wednesday, both commodities rebounded sharply supported by a weaker U.S. dollar as commodities priced in the greenback became less expensive for holders of other currencies. Additionally, in the second half of the previous week we saw similar price action in both cases………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

Gold has been steadily declining for the past year, and the precious metal looks like it will finally end its 12-year bull run. Part of its demise stemmed from equities rallying, which caused a major increase in risk appetite and an asset class shift for many. Others stipulate that it has simply been a natural correction preceding a run higher.
Lately, however, gold has been feeling pressure from India as the emerging economy has been frustrating traders around the world. India has long been one of the biggest consumers of gold, a fact that does not sit well with a government that is trying to narrow its account deficit………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

The reason for posting a new Gold Market update at this juncture is that we appear to be at an optimum ‘buy spot’, for gold, silver and Precious Metals ETFs and stocks, as both gold and silver have dropped back in recent weeks to mark out the Right Shoulder low of what is believed to be a large Head-and-Shoulders bottom.
After posting the 1-year chart for gold shown below on clivemaund.com a couple of days ago, a subscriber wrote and protested, saying how could I recommend buying the sector when it hasn’t even completed the H&S pattern, which could abort, and that it would be far better to wait for a breakout, and then buy on a post breakout pullback. There are 2 points I would like to make about this………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

United States gold prices may drop to 1,170 an ounce in next 6-12 months, said Natixis in its “Metals Review Second Half 2013”. According to Natixis, since the beginning of the year, gold prices have dropped by 20%, falling back to 2010 levels. Two separate events in the second quarter of the year triggered significant drops in the price of gold.
First, in mid-April, the Cypriot government announced that they would sell their 13 tonnes of gold as part of an EU bail-out package. Second, in June, the Fed indicated that it would seek to taper QE. Accompanying those two events, sales of gold from physically backed ETPs have added a new source of supply which has clearly contributed to lower prices………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

I take a long view of precious metals investing and find little meaning in the day-to-day fluctuations in the market. Major corrections — like those we’ve endured this year — are a different story. They clearly have an impact, leaving investors either anxious about their portfolios or excited about the new buying opportunity.
So, it’s no surprise that the question I’ve been asked most often in the past few months has been, “Where are prices going?”……………………………………….Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

The central bankers have no rudder, adrift in a sea of fiat, taking everybody with them. Witness Cyprus and Greece being forced to walk the plank. Those who choose to stay on this Ship of Fools will suffer the same fate, even worse as the growing panic emboldens banker reactions.
Unless one has become anesthetized to the proverbial handwriting on the wall, symptoms are teeming all around. Barack “Yes We Can” [more than double the debt] Obama told everyone, promised everyone that he would cut the deficit in half. What he did not say is cutting it in half would then be the measure by which it would multiply………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

The reason for posting a new Silver Market update at this juncture is that we appear to be at an optimum ‘buy spot’, for gold, silver and Precious Metals ETFs and stocks, as both gold and silver have dropped back in recent weeks to mark out the Right Shoulder low of what is believed to be a large Head-and-Shoulders bottom.
The Head-and-Shoulders bottom in silver is more obvious than the one in gold, as it is more or less symmetrical. It is not down sloping as gold’s is, and has a horizontal neckline which not surprisingly coincides with a broad band of resistance at the top of it, as we can see on the 1-year chart for silver shown below. The silver price has dropped back in recent weeks to mark out the Right Shoulder low of the pattern, which should mean that we are at an optimum buy spot right now with the price very close to what is believed to be the Right Shoulder low………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

You probably already understand these ideas in their singular senses: ETF, portfolio and indexing. But what is ETF portfolio indexing, all strung together? Easy enough. It’s a portfolio of index-tracking ETFs. But let’s break it down step-by-step, including how and why each component matters.
1. What is an ETF? The acronym ETF stands for “exchange-traded fund.” They started out as a way to buy a benchmark. Before ETFs, if you wanted to own the S&P 500, the costs of buying and holding all 500 stocks was overwhelming………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

Our government may need to review whether the green light given to the local bourse to spend so much on the London Metal Exchange was the right decision. We have found no evidence to show the deal will encourage commodities trading here.
In fact, Hong Kong brokers and investors have paid scant attention to the continuing annual LME Week in London, which shows the mega deal last December has failed to promote commodities trading here. The Hong Kong government - Hong Kong Exchanges and Clearing’s largest shareholder - threw its weight behind the LME deal as it believed it would help promote the city as a commodities trading centre………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

Eleni LLC, a newly-formed company based in Nairobi, Kenya, with equity investments by Morgan Stanley, International Finance Corporation (IFC), the private sector arm of the World Bank, and 8 Miles Fund, a private firm in London, has received the green light from the Securities and Exchange Commission (SEC) to set up the Ghana Commodity Exchange (GCX) within a 12-month timeframe.
The Co-founder and Chief Executive Officer (CEO) of Eleni LLC, Dr. Eleni Gabre-Madhin, disclosed this to the Business Chronicle in Accra over the weekend. Dr. Gabre-Madhin, who was in Accra last week at the invitation of the Government of Ghana, described her trip to Ghana as “very successful.”……………………………………….Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

After what was seen as a lukewarm protest against a strengthening euro by European Central Bank chief Mario Draghi last week, financial markets are gunning for more gains for the single currency.
On the face of it, the bank has done much on actual policy to lay the ground for a halt in the currency’s gains, allying an extremely cautious view on the euro zone’s recovery to a promise to pump yet more money into the banking system if market interest rates show even a hint of rising………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

Desjardins Group, a Canadian credit union that beat the largest banks as the third-quarter’s most-accurate currency forecaster, favors the dollar as U.S. growth outpaces Europe.
Hendrix Vachon, an economist and currency strategist, said Desjardins expects the dollar to gain versus the euro and pound. That puts the firm in line with Norddeutsche Landesbank Girozentrale, which came second in Bloomberg’s survey, and third-placed Westpac Banking Corp. (WBC)……………………………………….Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

A fortnight ago Labour leader Ed Miliband wooed voters with a promise to cap gas and electricity bills, defying his insistence as energy minister that there was “no low-cost energy future”. Now, other parties are reappraising the electoral wisdom of policies that aim to force energy costs higher.
According to a report in the Financial Times, one measure being questioned in coalition circles is the carbon price floor, a tax on the emissions of electricity generators that was introduced in April………………………………………..Full Article: Source

Posted on 08 October 2013 by VRS |  Email |Print

Britain should abandon plans to review its fourth carbon emissions budget next year, or at least promise not to weaken it, MPs said in a report on Tuesday. Britain has set legally binding targets for greenhouse gas emissions over four five-year periods to 2027, known as carbon budgets, which aim to put it on track towards cutting emissions by 80 percent by the middle of the century.
In 2011, the government set its fourth carbon budget to cover the period 2023 to 2027, which would require an emissions cut of 50 percent from 1990 levels. However, it said it would decide in 2014 whether the budget should be revised to reflect progress on cutting emissions in the European Union………………………………………..Full Article: Source

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