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Commodities Briefing 28.Nov 2013

Posted on 28 November 2013 by VRS |  Email |Print

The unloved commodities sector is the next big contrarian play for stock market investors. For the first time in two years of persistent underperformance, natural resource equities are showing signs of life.
These bombed out stocks have dramatically lagged, showing characteristics seen in Japanese and European equities prior to their recent re-ratings. Since the trough on June 25, the JPM Natural Resources Fund is up 18pc. Cyclical sectors in general have started to do better than defensive parts of the equity market as the improving economy signals recovery………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Why is Brent crude rallying in the face of a new Iran nuclear deal? Two words might explain it: Saudi Arabia. No one was more upset, save for the Israelis, by the recent agreement between the Iranians and the U.S. than Saudi Arabia, the Iranians natural enemy in the Middle East.
By the number of visits that Secretary of State John Kerry made to the Kingdom and the appearance of Saudi sovereign investor Prince AlWaleed here in the U.S., it was clear that the message that the Saudis were sending to the U.S. government went unheeded: the U.S. inked a 6-month agreement relieving much of the financial pressures built up by sanctions over the last 3 years………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Opec will keep its crude production limit unchanged next week as it anticipates demand in line with its current target, and as members struggle to agree on their individual share of the total, according to a Bloomberg survey.
The Organisation of Petroleum Exporting Countries will reaffirm their collective limit of 30 million barrels a day, first set two years ago, when its 12 members gather in Vienna on December 4, 22 of 24 analysts and traders polled this week by Bloomberg News predicted. The group expects demand for its crude to average 29.6 million barrels a day in 2014………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Well, this would be good news for the global economy if it bears out. The potential for an expanding global crude oil supply is “greater than at any point in recent memory, leaving the outlook for oil prices skewed to the downside over the next few years.”
That’s according to Morgan Stanley commodity strategists Adam Longson and Alan Lee, who this morning forecast Brent crude oil’s price to average $103 a barrel during 2014 before falling to $98 during 2015. Over this period, non-OPEC crude growth should “far outpace demand,” they write:……………………………………….Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

China may raise the price of refined oil on Thursday, which would mark the seventh such increase within a year, industry analysts predicted. The upward adjustment of the refined oil price is predicted to be 100 yuan (16 U.S. dollars) per ton, analysts said.
“We expect the upward adjustment of the refined oil price to be 100 yuan per ton, which will raise the retail price of 93-octane gasoline by 0.1 yuan per liter, due to the high level of the moving average of a basket of crude oil prices,” said Li Hong, an analyst………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Rogers International Commodity Index (RICI), managed by veteran investor Jim Rogers, will cut its weighting toward crude oil next year and raise exposure to natural gas, gold and silver, due to what Rogers termed “consumption changes”.
The shift in weightings of the RICI comes amid projections for higher U.S. crude oil supplies in 2014, which some analysts say could further weigh on weakening prices. U.S. natural gas production is also expected to rise next year, although gas prices have been trending higher lately due to cold weather in key consuming regions of the country………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Given the recent further weakness in the price of gold bullion, should investors be running for the exit doors? Some well-known “gold bugs” have recently turned bearish on the precious metal. But I’m on the opposite side of the spectrum; I see the pullback in gold prices as an opportunity of a lifetime for contrarian investors.
The gold bullion price chart below shows the long-term trend in gold bullion is still intact. Since 2001, the precious metal’s price has marched higher. Note there have been many pullbacks along the way, but in all cases, gold bullion prices recovered and moved higher after their pullback. And I believe we will see gold prices recover again from their current price correction………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Something may have changed Monday in the gold market. For one I think gold probably formed a minor daily cycle bottom. But what I’m really talking about is the complete recovery from another middle of the night attack. For most of the last year these late night attacks have worked wonders for sending gold crashing through technical levels and triggering stops. Yesterday however it simply didn’t work for the first time.
It’s been my opinion for months now that the forces behind these take downs were trying to push gold back down to the 2008 C-wave top at $1030. At which point I expected they would flip sides and go long for the bubble phase of the bull market………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Gold prices fell the most in more than two months last week mainly due to renewed speculation over the timing of the US Federal Reserve’s (FED) tapering of its monetary stimulus programme. After breaking below certain key support levels, the price of spot gold ended the week with a 3.5% drop to end the week at $1243.70 per ounce.
After dropping below $1300 an ounce, the selling accelerated on Thursday taking gold through the support level at $1,250, which many analysts saw as important for the market to hold. While prices initially managed to hold above $1240 an ounce, traders are eying this level as a break below could signal more technical selling with some analysts even suggesting a dip to the $1,220s as possible as bearish technical charts and little positive news is available to offset the price-negative sentiment in gold………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Bullion consumption in the world’s second-largest economy will surge 29 percent to a record 1,000 metric tons in 2013, according to the median of 13 estimates from analysts, traders and gold producers in China surveyed by Bloomberg News.
Demand that may ease 2.4 percent in 2014 from this peak still points to purchases greater than any other nation and more than the U.S., Europe and the Middle East combined. China’s demand for jewelry, bars and coins rose 30 percent to 996.3 tons in the 12 months to September, while usage in India gained 24 percent to 977.6 tons, according to the London-based World Gold Council. India was No. 1 for calendar 2012………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Aluminium slid to its lowest level in more than four years on Wednesday as speculators piled pressure on a market already weighed down by a global surplus.
Three month aluminium touched a low of $1,748 a tonne, the weakest since July 2009, and closed down 0.9 percent at $1,757. It has been one of the worst performing base metals, with losses of about 15 percent so far this year………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

U.S. gold mine production increased 6% in August, the U.S. Geological Survey has reported. Meanwhile, year-to-date mined copper output was 10% higher in July of this year that during the same period of last year, according to the USGS.
August production of gold by U.S. mines was 20,700 kilograms (665,520 troy ounces), up 6% from 19,600 kg (630,154 oz) for August 2012. Nevada led August 2013 output with 14,200 kg (456,540 oz) of gold, followed by other states at 2,880 kg (92,594 oz) and Alaska at 2,490 kg (80,055 oz)………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

The Federal Government’s commodities forecaster says the mining investment boom has peaked and the number of major resources projects has fallen. In its latest report, the Bureau of Resources and Energy Economics says Australia is seeing the transition from record mining investment to the mining production phase.
The Bureau says lower commodity prices and rising costs have led to a fall in the number of resources projects compared to six months ago………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

On a relatively quiet week for stocks with the Thanksgiving holiday, it provides a great opportunity to look at an investment alternative–currency ETFs. Currency ETFs provide traders and investors with an easy way to gain exposure to the currency markets, providing independent opportunities (and risks) which can help diversify portfolios and trades.
Like other investments, currencies change price based on supply and demand, driven by fundamental and technical factors. These four popular currency ETFs currently have compelling technical opportunities………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Premiere stock exchange BSE will launch its platform for trading in currency derivatives from Friday, making it the fourth bourse in the country to offer such trades.
Other stock exchanges present in the currency futures segment are — National Stock Exchange (NSE), MCX-SX and United Stock Exchange (USE). “Exchange is pleased to inform trading members that it will be launching trading in Currency and Interest Rate Derivatives with effect from Friday, November 29, 2013,” BSE said in a notification………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Goldman Sachs is in the process of releasing its top trade recommendations for 2014, and two of its three released tips include shorting commodity currencies.
On Wednesday, analysts recommended a long bet on the U.S. dollar versus the Canadian dollar, or loonie. A long is a bet that the asset will appreciate, while a short is a bet that the asset will depreciate………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

The value of a single bitcoin has surpassed $1,000 (£613) for the first time, according to MTGox, one of the virtual currency’s major exchanges. Bitcoin’s value has been rising rapidly since a US Senate committee hearing earlier this month.
Confidence grew after the committee described virtual currencies as a “legitimate financial service”. Bitcoin has become popular in part due to it being difficult to trace transactions………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

China’s Guangdong Province, the second-largest by population, will begin a carbon-emissions-trading scheme next month as the world’s largest emitter of greenhouse gases attempts to combat air pollution, Reuters reports.
Once the carbon market is up and running, it will stand as the second largest of its kind, trailing o nly the European Union. The program is one of seven pilot programs currently in the works in China and will come on the heels of the launch of similar markets in the cities of Shanghai and Beijing……………………………………….Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Countries committed to the Kyoto Protocol mainly operate under three market-based mechanisms. Emission Trading or ET allows countries to sell their emission quota to other countries. The Clean Development Mechanism or CDM allows a country to implement an emission-reduction project in developing countries.
Such projects can earn saleable certified emission reduction credits, which can also be counted toward meeting its Kyoto targets. Joint Implementation or JI is similar to CDM, with one difference - JI projects can only be hosted by developed countries with binding emission targets………………………………………..Full Article: Source

Posted on 28 November 2013 by VRS |  Email |Print

Mexico City bourse BMV has launched a carbon credit market, the first of its kind in Latin America. MexiCO2, which was launched in collaboration with environment ministry Semarnat, the British Embassy and the UN Environment Program, will function like a standard carbon trading program.
Firms receiving carbon credits through international programs, like the UN’s Clean Development Mechanism (CDM), will be able to sell credits on the market. Firms owing carbon taxes, to be implemented under Mexico’s recently approved tax reform, can reduce what they owe by purchasing credits on the market………………………………………..Full Article: Source

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