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Commodities Briefing 15.Oct 2013

Posted on 15 October 2013 by VRS |  Email |Print

China’s economy might be slowing, but its demand for Africa’s commodities will continue, offering significant opportunities to banks operating on the continent. The best prospects are in providing financial services to facilitate development in oil and gas, mining, and power and infrastructure, according to Standard Bank corporate and investment banking CEO David Munro.
Though some economists have warned that a slowdown in China’s economy and the subsequent reduction in its demand for commodities could hit resource-rich Africa hard, Mr Munro disagrees………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Cazenove’s multi-managers have added positions in the BlackRock Gold & General and the JPMorgan Natural Resources funds, in anticipation of what they see as the next stage in the global recovery.
Robin McDonald, co-manager of Cazenove’s multi-manager range, said his team had added the JPMorgan product as a replacement for a holding in the Aberdeen Emerging Markets fund. “If there has been a bull market in the past five years, it has been in the emerging markets consumer area,” he said. “These companies are overearning, while natural resources [companies] are underearning.”……………………………………….Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

The cross arbitrage means first month-second month contract. It is called a spread contract where you can take a big position and you will play the gaps between the two months contract, says Dharmesh Bhatia, Deputy Vice President-Research at Kotak Commodities Services.
Commodities market is not an investment as of now. It is completely Futures market. It is majorly driven by speculators. So the common thing is that you can go for a naked position. You can just open the position, hold the position. Second thing is you have to do a cross arbitrage. The cross arbitrage will be that first month-second month contract. It is called a spread contract where you can take a big position and you will play the gaps between the two months contract………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Talking about commodity markets, it is volatile, it is vulnerable. If there is no volatility, there will be no return, so the market is completely stable. People want to invest where there is huge volatility and they can make good money. Currently, commodity market is like 24-hour market, it runs throughout the day, so volatility is there in short-term or medium-term or long-term.
I would rather suggest investor to think about the market in case talking about equity is 1:4 ratio, talking about international market, the commodity market is four times the equity market, the volatility and the volume is four times………………………………………..Full Article:

Posted on 15 October 2013 by VRS |  Email |Print

The previous week was quite hard for the oil bulls. Light crude lost almost 2% and slipped to its lowest level since July 3. When we take a closer look at the chart of crude oil we clearly see that the price of light crude remains in the narrow range between $100 and $104 per barrel.
Since the beginning of the month oil bulls and bears have pushed it above or below the 38.2% Fibonacci retracement level, however, neither the buyers nor the sellers have had enough strength to win and trigger another bigger move………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Unheralded and unnoticed, American oil producers are helping stabilize global oil prices, which would be a lot higher if new U.S. oil supply, mostly from shale, weren’t reaching world markets. Public attention usually focuses on shale from the perspective of local business benefit or environmental concern. Holding down prices doesn’t figure as a benefit but it’s a story worth telling.
Even with Saudi Arabia pumping oil at its fastest clip in decades, oil prices remain stubbornly high. For example, the world’s oil benchmark, Brent crude, recently hovered above $110/barrel. And it’s now been more than 1,000 days – a record – since U.S. gasoline prices were lower than $3/gallon………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Wednesday marks the 40th anniversary of the Arab oil embargo, a turning point for US energy security policy. The embargo was imposed by the Organization of Arab Petroleum Exporting Countries after the Yom Kippur war. Oapec banned oil exports to Israel’s supporters – the US and the Netherlands – tightening the oil markets to lead to a 400 per cent price rise.
It used the promise of oil exports on favourable terms to separate them from Nato partners………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Rising energy output in North America was thought to have one major unintended consequence: changing and possibly diminishing the influence of OPEC. But those rushing to call the death of the cartel overlooked its willingness to adapt.
Increasing oil output in the U.S. and Canada are already redirecting global oil flows, but those being hit the hardest are West Africa’s crude-oil producers and the refineries of Western Europe that are suddenly competing with cheap North American products. The four Gulf kingdoms that dominate OPEC have actually increased their exports to the U.S. over the past three years, the Financial Times reports, taking advantage of Nigeria’s fragile infrastructure and Libya’s political chaos………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Forty years ago, on Oct. 17, 1973, the world experienced its first “oil shock” as Arab exporters declared an embargo on shipments to Western countries. The OPEC embargo was prompted by America’s military support for Israel, which was repelling a coordinated surprise attack by Arab countries that had begun on Oct. 6, the sacred Jewish holiday of Yom Kippur.
With prices quadrupling in the next few months, the oil crisis set off an upheaval in global politics and the world economy. It also challenged America’s position in the world, polarized its politics at home and shook the country’s confidence………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

In the third quarter (Q3) of 2013, total assets in commodity-linked exchange-traded products (ETPs) rose $8.4 billion to $135.9 billion, marking the first quarterly rise since Q3 2012, according to ETF Securities, a leading London-based provider of commodity ETPs.
The rise was driven by a combination of price increases and the largest quarterly inflows into non-gold commodity ETPs since Q1 2012. In terms of flows over the quarter, commodity ETPs excluding gold saw $1.9 billion of inflows, more than compensating for the outflows in Q2, and the largest quarterly inflows since Q1 2012. Including gold, global commodity ETPs saw $2.3 billion of outflows in Q3 2013………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Since the precious metals bubble began almost 10 years ago, the prices of gold and silver have been driven more by fear, greed, and other emotions than by fundamentals or allegedly rational reasons.
Gold pays no dividend and provides no cash flows, actually costs money to own (storage fees and insurance premiums), and is used in relatively very little industry compared to other asset classes such as land, housing, equities, bonds, or even timber. You simply can’t value precious metals the same way you do other investments………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Gold swung between gains and losses amid speculation that U.S. lawmakers will forge a deal to avoid breaching the nation’s debt ceiling and end a two-week partial government shutdown. Silver dropped for a sixth day.
Bullion for immediate delivery lost as much as 0.5 percent to $1,266.40 an ounce and gained 0.3 percent, before trading at $1,274.53 at 10:31 a.m. in Singapore. Prices fell to $1,260.61 on Oct. 11, the lowest since July 11, on expectations that a deal would be reached. Gold for December delivery dropped 0.2 percent to $1,274 on the Comex in New York………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

The statement in the title relates to a frustrated comment in a recent King World News interview with John Hathaway, a renowned gold stocks analyst who manages the well-respected Tocqueville Gold Fund in the USA.
Now, this factoid will not be news to regular readers of Mineweb, or to any avid follower of the gold market, and is perhaps indicative of the way virtually all markets are manipulated by the world’s financial elite………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

A new paper from Professor Brian Lucey and Sile Li examines the safe-haven properties of gold, silver, platinum and palladium against US stock and bond declines.
We are used to hearing that gold is a safe-haven, and to some extent silver as well. However we are rarely faced with the idea that platinum and palladium may also be, or that each of the precious metals may perform better as safe-havens than one another at different times………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Two years ago, Saudi Arabia started mulling the prospects of shale natural gas as it faced the possibility of running short on energy supplies. The largest oil exporter in the world said it’s now ready to replicate the shale gas success in the United States and use its own unconventional reserves to keep the lights on.
The shale boom in the United States has turned the global energy market on its head. The director of the International Energy Agency said, however, coal was still the fuel of choice. The United States is on pace to pass Russia as the leading natural gas producer in the world. In theory at least, it could rival Riyadh in terms of oil production………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

September was a pretty rough month for commodities across the board. A partial government shutdown as well as concerns over raising the debt ceiling continued to put pressure on this corner of investing. While the commodities in the precious and industrial space have given dull performances of late, tin is the only metal that is moving higher.
In fact, iPath Dow Jones-UBS Tin Subindex Total Return ETN was up over 4% in the trailing past month, clearly outpacing the broad PowerShares DB base metals Fund and PowerShares DB Commodity Index Tracking Fund by wide margins. Further, the product has been the best performer in the industrial metal space from a year-to-date look………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Rice stockpiles in Thailand, once the world’s biggest exporter, are expanding to a record as a government program to buy production spurs farmers to plant the most crops ever and add to a global glut.
Reserves in Thailand will increase 24 percent to 15.5 million metric tons in 2013-2014 as global output rises 1.7 percent to an all-time high of 476.8 million tons, the U.S. Department of Agriculture estimates………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

A European Central Bank official said Monday that the dollar is and will remain the world’s top reserve currency for some time to come, although its importance will likely decline over time. When it comes to the U.S. dollar, “there are no markets with this degree of liquidity,” said Ewald Nowotny, Austrian central bank governor, in an address given at Columbia University in New York.
That said, Mr. Nowotny said that over time, the dollar’s top-tier status likely will decline from challenges by the euro and even China’s currency. The official pointed to the recently announced currency-swap arrangement between the ECB, where he serves on the governing council, and China’s central bank as evidence of the rising importance of China’s currency………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Upset that the U.S. fiscal impasse threatens to trigger a default that would roil financial markets worldwide, Beijing suggests ‘building a de-Americanized world.’ Five years after the U.S. financial crisis helped cause a deep global recession, foreign leaders are worried that history is going to repeat itself.
The fiscal impasse that has partially shut the federal government now threatens to trigger a U.S. default that would roil financial markets worldwide, leading an agitated China to suggest replacing the dollar as the international reserve currency………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

European Union governments agreed today to seek a revision of a draft law to curb emissions from cars, bowing to calls from Germany for more flexibility to protect the competitiveness of the domestic automobile industry.
EU environment ministers meeting in Luxembourg authorized Lithuania to start talks with the European Parliament to change a preliminary deal on the measure, which was blocked by German Chancellor Angela Merkel in June………………………………………..Full Article: Source

Posted on 15 October 2013 by VRS |  Email |Print

Efforts at carbon emission reduction could backfire on the domiance of coal surpassing Crude oil as fuel later this decade, accordign to William Durbin, Wood Mackenzie’s President of Global Markets.
Durbin pointed out that increasing demand for coal from power utilities in China and India apart from US, Europe and other nations is responsible for the dominance of coal. As such, Wood Mackenzie expects existing carbon policies to have a muted impact. Instead, the pace of coal demand will be influenced more by local governments of emerging markets needing to balance economic growth, energy demand and environmental needs………………………………………..Full Article: Source

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