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Commodities Briefing 31.Oct 2013

Posted on 31 October 2013 by VRS |  Email |Print

‘Blue gold’ investors claim to improve access to a vital resource, but critics argue commoditization may out-price the poor. From commodity guru Jim Rogers to the likes of Goldman Sachs, it has become almost cliché to refer to water as “blue gold” – a whole new commodity that can be bought and sold on par with gold, oil and corn.
After all, as demand grows and water infrastructure crumbles, the world is running out of drinkable water. And many believe the problem can only be solved if cash-strapped governments team up with “angel” investors and others in the private sector……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Inflation is tame and commodities are having a ragged year—so now is a great time to buy commodities. No sense buying hard assets when everyone else is.
There’s more than one way to bet on gold, oil and copper. Let’s look at a few, paying particular attention to the costs and tax rules. It gets tricky, since Congress (motto: We keep you entertained) has created no fewer than six tax regimes for commodity investments……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Bank ownership of commodity operations has generated lots of controversy recently. When the heat intensified, JPMorgan Chase wasted no time in announcing it would sell its physical commodity ownership business, to the surprise of no one. Goldman Sachs has not followed suit with regard to its Metro warehousing unit, but surely the issue has come up internally.
As for trading operations, the Federal Reserve has come under fire for a lack of bright lines in this area. However, it “may not unveil its plans for regulating Wall Street’s commodity trading business until early next year,” reports Reuters……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Scotiabank’s Commodity Price Index fell in September, declining 2.8% month over month (m/m) and 3.8% year over year (yr/yr). While the All Items Index will likely fall further over the balance of 2013, the correction in commodity prices, especially in metals and minerals, since April 2011 should be largely over by year-end.
“Traditionally, junior mining companies have been important contributors to mineral exploration across Canada, finding and delineating deposits, before selling them to senior producers for development,” said Patricia Mohr, Scotiabank’s Vice President of Economics and Commodity Market Specialist. “However, equity capital raised by junior mining companies on the TSX Venture plunged in 2012 and has moved even lower in 2013 year to date. (Press Release)

Posted on 31 October 2013 by VRS |  Email |Print

Several major banks involved in commodities business would find the going tough following the Federal Reserve move to regulate the bsuiness and impose new capital charges, according to news reports.
The Federal Reserve may review the permission granted to banking majors who engage in trading of physical commodities such as oil and metals and impose curbs on their operations. This has caused apprehensions among the banking community– Citigroup, Barclays, JPMorgan, Goldman Sachs being some of them……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

There is little doubt that politics as we knew it in the Middle East is changing right before our very eyes and with that shift in politics will unavoidably come a change in the policies of oil, as the two go hand in hand in the region where the Arab countries have learned since the October 1973 Arab-Israeli War that oil can be a very powerful weapon.
First among the major changes to occur in recent weeks has been the icing of relations between Saudi Arabia and the United States, two countries who for the longest time were the closest of friends in the Middle East, except perhaps for the relation that the US had with Israel……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Statoil’s chief executive played up the Norwegian oil company’s positions in what he called “the workable Arctic”, in Norway and eastern Canada, while casting doubt over imminent success in other parts of the polar region.
Arctic oil exploration has been hit by a series of bad headlines after Royal Dutch Shell and Cairn Energy spent billions of dollars with disappointing results in Alaska and Greenland respectively……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Libyan crude oil exports showed little improvement on Wednesday after falling to a trickle this week, except for one tanker that was expected to load condensate from the small western port of Mellitah, trading sources said.
Over the weekend, Libya’s two western ports of Zawiya and Mellitah suspended oil exports, on top of the closures of its eastern facilities……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Rising gold prices are fast forcing change in women’s jewellery buying habits also aided by the changing fashion trends from the yellow metal to diamonds and other metals like platinum, reveals an ASSOCHAM recent survey ahead of Dhanteras and Diwali festivals.
For the ASSOCHAM Survey on “Diamonds and platinum shines as gold loses sheen in Urban cities” the research team interacted with about 350 jewellery makers based in Delhi-NCR, Mumbai, Ahemdabad, Chennai, Kolkata, Hyderabad, Chennai, Bangalore, Chandigarh and Dehradun. The jewellers in major cities like Delhi-NCR, Mumbai, Chennai, Ahemdabad, Kolkata, Dehradun are looking at unique mix of strategy to sell jewellery in the current fluctuating market conditions……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

The reason behind this is both simple and apparent: gold bullion prices have declined and as a result, gold producers are facing pressures. Pessimism towards gold producers is very high; some are even calling them the worst investment to hold in your portfolio.
Just look at the chart below of the Market Vectors Gold Miners ETF, an exchange-traded fund (ETF) that tracks the performance of well-known gold producers. This ETF has lost more than half of its value since 2012, with a majority of the losses coming in 2013. So why would an investor want to buy this ETF? After all, no one wants to catch a falling knife……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

As more and more liquidity is pumped into the global financial system, so gold bugs have become increasingly vocal about the precious metals monetary properties and the importance of hard assets.
And, for good reason, they argue, the metal has been used as a monetary asset for centuries. But, while it remains a medium of exchange in some places, currently world’s reserve currency is the US dollar. And, any view of gold’s long-term prospects must take account of the outlook for the US dollar……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

The billionaire mining mogul has purchased a Hollywood film studio to make movies—but he’s not ditching his bread and butter any time soon. Friedland’s goal is to produce films that highlight the importance of mining and underscore the urgency of finding new ore bodies to satisfy the globe’s growing appetite for metals.
“It’s remarkable how many people who live in urban environments don’t understand the supply chain,” Friedland said during an Oct. 9 talk at Laurentian University in Sudbury. “They don’t understand that if you walk in the room to turn on a light switch, somewhere a generator has to kick in and provide that power; there’s no storage of electricity in the grid.”………………………………Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Nickel prices rose at the non-ferrous metal market here today on heavy stockists demand amid good offtake from alloy industries. Elsewhere, select copper and aluminium utensils gained due to better offtake from consumer industries.
Meanwhile, copper sheet cutting fell owing to lower demand from industrial users. The industrial metals was trading unchanged at the LME, well below last week’s one-month high on a weaker fundamental outlook as investors await clues on monetary policy from the US Federal Reserve……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Through the end of Q3 2013, the assets in Exchange traded funds (ETFs) and Exchange traded products (ETPs), listed in the United States have increased by 16.1% from $1.35 trillion to $1.56 trillion, representing a new record high.
In addition, through the end of Q3 2013, ETFs/ETPs have seen net inflows of $131.32 billion, which is slightly below the $134.89 billion at the end of Q3 2012. Equity ETFs/ETPs gathered the largest net inflows YTD with $127.28 billion, followed by fixed income ETFs/ETPs with $9.54 billion, while commodity ETFs/ETPs experienced the largest net outflows YTD with $19.49 billion……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Investors are increasingly turning to alternative investing to supplement the lackluster performance of fixed-income securities and find greater returns than equities. With little or no correlation to other assets, alternative investing also provides diversification in a portfolio since it doesn’t always move in tandem with the stock or bond markets.
However there’s a lack of transparency and risk in alternative investments like private equity and hedge funds. Because of these risks, alternative investments are generally limited to institutional investors, endowments or accredited investors who have earned $200,000 annually for the two most recent years or have at least $1 million in equity excluding the value of their home……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

China’s financial markets professionals have been facing an ongoing battle from policy makers as the government keeps a Chinese wall from much-needed reforms to compete with international markets. However, in a turn of events the financial watchdog, China Securities Regulatory Commission (CSRC), has hinted that it will be opening up commodity options trading.
In a notification on the regulator’s website, the firm stated that it will be allowing commodity options simulation trading to commence from November 8th. The move comes 12 months after the Dalian Commodity exchange has been exploring simulation trading in options, a common practice among venues prior to the launch of new products or solutions……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Barclays reported a decline in quarterly profits as it confirmed it was reviewing foreign exchange trading operations in response to an investigation into the $5.3tn market by global regulators.
European lenders UBS and Deutsche Bank on Tuesday admitted their involvement in an international probe into alleged manipulation of currency trading by regulators in the US, UK, Hong Kong and Switzerland……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Harindarpal “Harry” Banga, a billionaire businessman who carved out a 20-year career at commodities trader Noble, plans a return to the industry in a new trading firm with his two sons.
The 63-year-old former sea captain has amassed a $1 billion (623 million pounds) war chest to splurge on the newly formed Caravel Group while luring 10 to 20 former Noble Group Ltd (NOBG.SI) colleagues to join the venture, sources said. They include former Noble staff in Hong Kong and at its iron ore business in Beijing……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Bloomberg Indexes introduced a new index on Wednesday to gauge the U.S. dollar’s strength that includes emerging-market currencies like the Chinese offshore renminbi and Mexican peso.
The Bloomberg U.S. Dollar Index contains 10 currencies and is rebalanced every year based on trading and liquidity data. The index has a 34.3% weighting toward the euro , and also consists of the yen , Canadian dollar, pound, Mexican peso, Australian dollar, Swiss franc, South Korean won, Chinese offshore renminbi and Singapore dollar……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

Today we are going to discuss Al Gore and his latest “big idea” as we know we will get emails and comments over the next few days concerning what was said. We will address that story in our comments below, but want to stress to readers that it is important to read those with opposing views when conducting your research in order to complete due diligence.
Most everyone’s thesis for various investment calls is based off of assumptions and it is important to delve into the way those assumptions were arrived at. Simply put we disagree with the former Vice President, but we are thankful for his views as it did give U.S. some insight into the bear case……………………………….Full Article: Source

Posted on 31 October 2013 by VRS |  Email |Print

US and Canadian governors representing 53 million people are joining forces to align their climate and clean energy policies in a move that should further cement the Pacific Coast’s position as one of the world’s leading clean tech hubs.
Yesterday the states of California, Oregon and Washington and the Canadian province of British Columbia signed the Pacific Coast Action Plan on Climate and Energy, which commits the four jurisdictions to “lead national and international policy on climate change”……………………………….Full Article: Source

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