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Commodities Briefing 30.Oct 2013

Posted on 30 October 2013 by VRS |  Email |Print

Commodity prices may not rise as much as they have in recent years and should therefore not be relied upon for future income growth, Bank of Canada Deputy Governor Agathe Cote said on Tuesday.
“Going forward, productivity may become more crucial to our financial well-being, since real commodity prices, while expected to remain elevated, may not rise as much as they did in the past decade,” Cote said in the prepared text of a speech on “The Promise of Potential.”……………………………………Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

With Syria dominating the headlines commodities, especially oil and gold, are yo-yoing in sync with the news. Though this makes fertile trading ground for short term investors, for long term investors it is harder to separate the “noise” generated by the sabre-rattling from where long term commodities prices could realistically be. What’s the solution?
The last few years have been thick with crises and conflict situations in the Middle East: Syria, Libya, Egypt and Iran, while Europe and the US have dished out their own market-moving contributions in the form of the Greek debt crisis, US debt ceiling negotiations and quantitative easing……………………………………Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Booming commodity trade financing in Asia is a rare bright spot for Western banks, forced to withdraw from other areas of commodities due to tougher regulation and capital constraints.
Commodity revenue for banks has shrunk dramatically in recent years and in the first half of 2013, turnover in the sector for the top 10 investment banks slid by about 20 percent to $2.7 billion, according to financial consultancy Coalition…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Goldman Sachs Group Inc. said crude production in the Organization of Petroleum Exporting Countries will decline this year by more than the bank previously estimated because of renewed disruptions in Libya.
OPEC’s output will decline by 760,000 barrels per day from last year, according to the bank, which had previously projected an annual loss of 570,000 a day. The supply reduction will keep Brent futures supported at $110 a barrel despite an accumulation in oil inventories amid weaker-than-expected fuel demand, Goldman said…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

OPEC, the Organization of the Petroleum Exporting Countries, said on Monday there would still be demand for its oil despite the shale oil boom in the United States, downplaying concerns the group may lose its market share.
Boom in shale oil production in the United States has changed the global energy landscape, as Washington has ceded its ranking as top global oil importer to China by cutting its import needs. Next year, the United States is set to overtake Russia as the world’s top oil producer due to the growing non-conventional oil output, the International Energy Agency (IEA) said this month…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Iran’s oil minister said that the country has skirted U.S. sanctions by exporting at least one million barrels of crude oil a day, according to regional media reports.
Iranian oil minister Bijan Namdar Zanganeh dubbed U.S. economic sanctions on Iran ineffective during public remarks delivered on Monday and said that the country can be run solely from oil sales…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Brent oil futures fell on Tuesday, giving back some of the previous session’s sharp gains, on expectations that fresh disruptions over the weekend in exports from OPEC member Libya could be short-lived. Brent rose 2.5 percent on Monday as reports of Libya’s worst civil unrest since the civil war in 2011 fueled concerns over global oil supplies.
The oil market seesawed on varying reports out of Libya. “The Libyan deal is highly fluid,” said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. “Yesterday we were looking at production outages, today there’s a renewed upswing in output. It just adds to the volatility.”……………………………………Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

The investor gold rush that propelled the precious metal to a dozen years of annual price gains is on the verge of ending with a whimper. Russia’s central bank in September sold gold for the first time in a year, according to the latest data from the International Monetary Fund. Since the start of 2010, Russia has accounted for 30% of all gold purchases made by central banks that report to the IMF.
Like other emerging-market nations, Russia bought gold to diversify its foreign-exchange reserves. The retrenchment of Russia and others is the latest factor to weigh on gold prices, which are down 19% year to date. The last time gold prices posted an annual loss was 2000…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Despite climbing by more than 10% a year since 1968, bullion has struggled to post anything other than flat returns during 2013. With global growth on the up, it’s hardly surprising that the precious metal has had such a difficult run, but put in its historical context, gold hasn’t performed as badly in more than 30 years, leaving experts wondering whether gold is now looking incredibly cheap.
As pointed out by Adrian Ash, head of research at gold and silver exchange Bullionvault.com, the yellow metal has had an “upside down year”, offering investors little clarity about where gold’s price could be heading next. “Gold in 2013 has done almost exactly the opposite of what it typically does,” he said. “Crashing in spring, and rising sharply in summer, the gold price has reversed what veteran investors call seasonal patterns.”……………………………………Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Silver posted the strongest gain of any commodity last week after investors became more confident that the US would leave stimulatory monetary policy in place for the near future.
Data from ETF Securities show the price of silver rose 4.4 per cent in the week ending 25 October, making it the strongest performing commodity of the week. The grey metal is up 5.7 per cent over the past month but is down 24.3 per cent over 2013 so far…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

The daily scrap gold prices - both hallmarked and non- hallmarked advanced Friday, 25th October on the ScrapMonster Price Index. The prices of Platinum too went higher, but Silver scrap witnessed weakness.
In the Hallmarked category, the 14 carat gold scrap prices were up by $ 3.12 per Oz. The prices of 18 carat and 22 carat gold scrap went higher by $ 4.0 and $ 4.89 per Oz respectively.9 carat gold scrap also quoted higher by $ 2.0 per Oz. The price of Platinum scrap increased by $ 5.10 per Oz. Silver scrap prices were marginally lower by $ 0.26 per Oz…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

There is still a good investment case for commodity ETFs but in the current environment of declining prices careful selection of the right ETF is imperative, rather than opting for the simplest basket-only approach. Older generation ETFs have lost their shine of late; no wonder then that a new slew of sleeker, more sophisticated ETPs have been launched that claim to be an improvement on previous ETP structures. Are they right for the times?
Commodity ETFs became very popular with investors during the commodities price boom, attracting everybody from retail buyers to large scale asset allocators…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Oakley Capital Management Ltd. closed its commodities fund of hedge funds as a gauge of performance across the industry retreated for a third year, according to two people with direct knowledge.
The London-based fund shut in July and Portfolio Manager Fabio Cortes left the company at about the same time, said the people, who asked not to be identified because the information is private. The fund managed $10 million of assets, one of the people said. An e-mail seeking comment sent to a LinkedIn Corp. account in Cortes’ name on Oct. 25 wasn’t answered…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

The co-head of Goldman Sachs’ global commodities business, Magid Shenouda, is leaving the bank after 14 years, according to an internal memo seen by Reuters on Tuesday.
London-based Shenouda, who has run the commodities business for the past two years alongside New York-based Greg Agran, joined the firm as an executive director in oil trading in 1999, and had run European oil as well as power and gas…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Currencies traders do not know which way to turn. This was meant to be the year the dollar would come roaring back against other major currencies, as the US recovery picked up steam and the Federal Reserve began scaling back its vast stimulus programme.
After years of near-zero interest rates in most developed economies, hedge funds were hoping that divergent central bank policies would finally create clear-cut economic trends on which to trade…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

Recent pressure on emerging market currencies has rightfully made headlines. But the broader issue for emerging markets is that such episodes could easily reoccur, or even get worse, over the next few years. This is because, over the past decade, these economies have increasingly pinned their economic hopes to foreign capital flows.
The numbers speak for themselves; portfolio flows to the emerging markets have grown 400 per cent over the past 10 years, compared with nominal GDP growth of 200 per cent. And the same is true of the broader private capital measure, which also includes bank lending and direct investment. This has increased 5.5 times over the same period…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

If Labor is really committed to delivering on climate change, then they should be prepared to consider negotiating with the Coalition on repeal of the carbon tax.
Sounds crazy? Not really. Most of the factors that will drive emissions reductions for the rest of the decade are not dependent on a price on carbon. For Labor, staying in the game to get broader energy market reforms is the best way to deliver meaningful action to reduce greenhouse emissions…………………………………….Full Article: Source

Posted on 30 October 2013 by VRS |  Email |Print

The “carbon bubble” is a concept that has been gaining momentum over the past year. In brief, the theory claims that in order to avoid catastrophic climate change, the world must remain within its “carbon budget”—the volume of CO2 that can be emitted before the Earth’s temperature is pushed over the 2°C benchmark agreed upon by the international community.
However, according to the IEA, “no more than one-third of proven reserves of fossil fuels can be consumed prior to?2050 if the world is to achieve the 2°C goal, unless carbon capture and storage (CCS) technology is widely deployed.” Following this theory to its logical end, the remaining two-thirds of global fossil fuel reserves are “unburnable”—that is, worthless…………………………………….Full Article: Source

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