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Commodities Briefing 12.Nov 2013

Posted on 12 November 2013 by VRS |  Email |Print

Commodities have become an established asset class in the Indian markets in the past few years. While futures trading is relatively new to the Indian commodity markets, the global commodity futures exchanges have been functioning for several decades.
What has attracted investors to trading in commodity futures is the transparency in the price mechanism, low margins, risk management, benefits to farmers by way of price clarity and an organised marketplace………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

The Organization of the Petroleum Exporting Countries’ (Opec) current crude production is “adequate to the market” and there is no talk of the cartel changing its output target of 30 million barrels per day (bpd) when it meets in December, the United Arab Emirates’ (UAE) energy minister, Suhail bin Mohammed al-Mazroui, said.
Opec, which pumps more than a third of the world’s oil, meets on 4 December in Vienna to decide whether to adjust its output target………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

OPEC expects global demand for its crude to fall in the next five years because of increasing supplies outside the 12-member group. The oil market is stable and prices are steady, two oil ministers said on Sunday, weeks ahead of an OPEC meeting to decide whether the group needs to adjust its output target.
“I think no, now the market is stable,” Angola’s oil minister Jose Botelho de Vasconcelos told Reuters in Abu Dhabi, when asked if OPEC needs to change its oil policy when the group meets next on December 4 in Vienna………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

Iraqi Minister of Oil , Abdul Karim al-Laeebe said on Sunday that the oil market and prices are stable , just weeks before a scheduled meeting of the Organization of Petroleum Exporting Countries (OPEC) to decide on the issue of amending the targeted production levels .
Iraq is considered the second- largest exporter in (OPEC), which pumps more than a third of global production. Laeebe said in a brief statement to Reuters briefed by “Shafaq News” that ” the market is stable and prices as well.”……………………………………….Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

Oil is a vital commodity. And because it’s vital, every barrel is political. So, more than anything, politics will continue to dictate the price of oil. In North America, it comes down to the question “Is the pen mightier than the pipe?”
Here in Canada, we are all acutely aware of our federal and provincial oil geopolitics. The recently announced consensus on “five conditions” between Alberta Premier Alison Redford and B.C. Premier Christy Clark was a welcome package of politics in the seemingly un-navigable quest to build a western oil pipeline to B.C. port facilities that can serve Asian markets………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

What a difference a week makes. Dial back seven days and the oil market bears were out in force, pointing out that the world’s crude needs were amply catered for—and this would likely continue for the foreseeable future.
The reason? Away from the weekly increments that admittedly cut both ways—larger U.S. inventories vs. Libyan shenanigans—the story at the forefront of most oil watchers’ minds was Geneva………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

The self-declared government of Cyrenaica, a district in eastern Libya, said it established its own oil company that’s ready to put crude oil on the international market. Libya since Moammar Gadhafi’s dictatorship ended in 2011 has struggled to return to the level of stability he ensured with an iron fist.
Now, one of Africa’s leading oil states is tearing apart at the seams defined largely along the divisions suppressed during Gadhafi’s autocracy. With 48 billion barrels of proven oil reserves at stake, what’s next for Libya may have less to do with political reform than it does with who controls the oil spigots………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

Hedge funds cut bullish gold bets, adding the most short contracts in four weeks, as U.S. economic growth fuels speculation the Federal Reserve will trim stimulus. Holdings across commodities dropped the most since April.
The net position in gold slid 13% to 87,689 futures and options in the week ended Nov. 5, U.S. Commodity Futures Trading Commission data show. Short bets jumped 37%, the most since Oct. 15, and long wagers fell 4.9%. Combined holdings across 18 U.S.-traded commodities dropped 20% to 658,263 contracts as investors cut cotton positions to the lowest this year and crude-oil bets to the fewest since June………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

India is the largest gold importer in the world. From 2012 to 2013, the nation imported 845 tons of the metal, and in October, it increased its gold and silver imports by 62.5% to $1.3 billion.
China is the second largest gold importer, but it may end up surpassing India to become number one. It’s expected that China may consume 1,000 tons of gold this year, particularly considering it imported as much as 826 tons from Hong Kong in just the first nine months of the year – twice as much as the same period last year………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

We can see that gold is clearly at some important levels. Gold posted a low on June 28th at $1180, then on October 15th gold posted a higher low at $1251. That upward sloping line of support now comes in around the $1270 level – just below where gold is trading this morning.
This rising level of support will be a ‘must hold’ level for the bulls this week, otherwise it will be a quick trip back to test that low of $1251 posted on October 15th………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

The manipulation of gold prices, along with practically every other asset class, has perfectly transparent legal precedent. The precious metals political hot potato taboo has been strong enough to make it almost impossible for the mainstream to understand.
And while it is perfectly plausible and even celebrated by the practitioners, the greatest threats to economic stability (LIBOR, bonds and interest rates, equities, electricity) are openly discussed facts. Obviously, history has demonstrated that these great unnatural “tinkerings” always end badly………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

Silver prices and the iShares Silver Trust (SLV) — a popular silver ETF which tracks physical silver – continue their rollercoaster ride so far this year. As of now, silver and the SLV ETF are down almost 30% year-to-date.
silver etfBut expectations were high for the silver ETF heading into 2013. In fact, Business Insider ran the headline: “2013 Will Be A Huge Year For Silver – Analysts, Traders And Investors Agree.” As seen by the performance of both the metal and the silver ETF, it clearly didn’t quite work out that way………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

Precious metals are on sale. And one of them – palladium – looks like it’s poised to shine this holiday season. Here are three reasons why… and three great ways to play it.
1. Palladium Is Outperforming the Other Precious Metals. I think all the precious metals have found their bottoms for the year. And if I’m right, then you can buy them on sale without a lot of worry that they’ll tumble much further………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

Iron ore is extending a bull market on record sales to China that are spurring forecasters from Morgan Stanley to the World Bank to increase price predictions. Shipments from Australia’s Port Hedland, the biggest iron-ore export terminal, to China jumped 43 percent to a record last month, port data show.
The Asian nation already imported the most ore ever in September, according to customs data. Standard Bank Group Ltd. and the Bureau of Resources and Energy Economics, Australia’s state forecaster, also increased price estimates in the past several weeks………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

After enduring one of the most tumultuous periods of modern US stock market history, investors have gained a renewed interest in strategies aimed at reducing the volatility of their investment portfolios. Traditionally, this has meant increased exposure to bonds along with decreased exposure to stocks.
The problem with this strategy today, however, is twofold: first, in many cases bond yields are too low to meet investors’ return objectives; second, after an extended period of low interest rates, many investors have concluded that the risk that rates will rise in the future (sending bond prices lower) is much greater than the likelihood that rates will continue to decline (sending bond prices higher)………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

Volumes on the Dubai Gold and Commodities Exchange (DGCX) have surged 56 per cent year on year on the back of strong growth in precious metal contract trades. Gold futures trading surged 60 per cent during October, with 45,928 contracts being traded. Silver futures rose 88 per cent to hit a new monthly high of 2,882 contracts traded.
Precious metals and gold in particular are central to the exchange’s expansion plans, with a spot gold contract to be launched imminently, according to Gary Anderson, DGCX’s chief executive………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

Sudan’s central bank has devalued the Sudanese pound by almost a quarter against the US dollar, the second such move in little over a year as the African country struggles with hard currency shortages. Sudan’s economy has been in turmoil since South Sudan’s secession in 2011 took away of three-quarters of oil production.
Oil was the driver of the economy and source for dollars needed for food and other essential imports. Sudan produces too little to feed its around 32 million people………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

The U.S. dollar is indisputably the world’s reserve currency. It comprises the majority (62%) of foreign exchange reserves held by central banks, with the euro a distant second, accounting for 24% of reserves.
And despite concerns that the Federal Reserve’s quantitative easing programs are debasing the dollar, perhaps throwing its reserve status into question, BofA Merrill Lynch strategist John Shin argues that “there still has not been much diminishment in the U.S. dollar’s role,” which is “likely to remain unchanged for the time being, especially given the lack of external competitors that could supplant the dollar.”……………………………………….Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

European Union carbon permits advanced from a two-month low amid optimism that agreement will be reached on temporarily curbing an oversupply and Societe Generale SA recommended buying the contracts.
December carbon rose 2.7 percent, or 12 cents, to close at 4.61 euros ($6.18) a metric ton on the ICE Futures Europe exchange in London. The contract earlier dropped to 4.42 euros, matching its lowest since Sept. 4. It fell 51 percent this year………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

We should not be debating a choice between direct action and carbon pricing: we need both, but with credible, well-designed mechanisms. Why we need both? We need a carbon price based on certificate trading for several reasons.
It sends a signal to both emitters and investors that they need to cut emissions, starting today. The price rises if there is insufficient action, and declines if action is effective. And there is the potential to profit from trading. All of that makes emitters more likely to innovate and bring down the cost of reducing emissions………………………………………..Full Article: Source

Posted on 12 November 2013 by VRS |  Email |Print

This past weekend China released a bunch of economic indicators for October. But in China, interpreting economic data can be a futile task when the validity of the data is put into question.
And it often is, as Patrick Chovanec, chief strategist at New York-based family office Silvercrest Asset Management and a long-time China-based economist, explains………………………………………..Full Article: Source

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