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Commodities Briefing 09.Dec 2013

Posted on 09 December 2013 by VRS |  Email |Print

Despite signs of recovery in demand and supply, global commodity markets covering energy products, metals (base, precious and industrial) and agriculture continued to remain vulnerable to a clutch of uncertainties including sustained global economic growth, monetary policy, exchange rate, geopolitics and not the least, weather.
Many of these factors played out in their own way the whole of 2013 – some favourably like the weather, and some otherwise, like geopolitics and monetary policy – but they all have refused to go away. Most of the driving forces will be around in 2014………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

When the banking industry’s top lobby group commissioned a report on commodity trading houses the idea was to show trading houses like Glencore Xstrata, Vitol or Cargill were “too big to fail” and therefore needed to be regulated in a similar manner to the banks.
But instead of highlighting the inherent issues surrounding the industry, the report found trading companies posed less systemic risk than the big banks. As a result, the Global Financial Markets Association, which commissioned the report, decided not to finalise or publish it………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

It seems that, to paraphrase that old Chinese saying, commodity investors will in 2014 be living in interesting times. Those who, at the height of the commodities boom in 2007, read “stronger for longer” as “stronger forever” are getting a harsh reality check.
And there may be more to come: Goldman Sachs says to get ready for falls of 15 per cent or more for gold, copper, iron ore and soybeans. Stocks are off to the races, so the hot money is being punted there. Wherever you look, it’s hard to make head or tail of what is going on for the mining and energy sectors………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

Commodities have faced a miserable run in the last two years. Despite this, certain market players remain hopeful and say there is strong evidence that sentiment is turning in the space.
Neil Gregson, fund manager for the £1 billion JPMorgan Natural Resources fund, explains investors have suffered severely over the last two years in the fund in absolute terms, but relative to its peers and the index benchmark, this negative performance has been exacerbated by the fund’s small-cap bias………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

The oil market is on the cusp of a new cycle, Goldman Sachs said on Friday, with demand in the US growing at a faster pace than in emerging economies such as China and India for the first time in a decade.
That’s likely to have profound implications for how oil markets operate, Jeffrey Currie, Goldman’s influential chief commodity analyst wrote in a note, which says there will be a “new oil order”………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

By opting to rollover its current output of 30 million barrels per day (bpd), hopefully until May next, Organisation of Petroleum Exporting Countries (Opec) took the anticipated route last Wednesday. “We have rolled it over,” veteran Saudi oil Minister Ali al-Naimi, told reporters at the end of three hours of closed-door talks in Vienna. “We are all satisfied.”
Although not much firework was visibly taking place inside the Vienna Opec headquarter conference room, that day last week, yet there are definite hints of skirmishes sooner rather than later………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

Hedge funds are the least bullish on gold since 2007 as signs of faster U.S. economic growth bolster the case for the Federal Reserve to trim stimulus and cut demand for haven assets.
The net-long position in gold fell 16 percent to 26,774 futures and options in the week ended Dec. 3, the lowest since June 2007, U.S. Commodity Futures Trading Commission data show. Short bets rose 6.2 percent to 79,631, within 0.6 percent of the record reached in July………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

Gold analysts are bearish for a third week, the longest stretch since February 2010, as prices approach $1,200 an ounce and a stronger U.S. economy improves the chance that the Federal Reserve will reduce fiscal stimulus.
Sixteen analysts surveyed by Bloomberg News expect gold to fall next week, 11 are bullish and two neutral. Prices tumbled 26 percent this year, heading for the first annual drop in 13 years and the biggest in more than three decades. Bullion last traded below $1,200 on June 28………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

October was China’s second highest month for gold imports, according to Hong Kong customs data. With the price of gold cratering this fall, China imported 148 tons in October, the second highest recorded level. In March 2013 China imported 224 tons.
The numbers are not the full window into Chinese demand. Gold may be imported from other countries. China is also the world’s largest gold producer………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

Beyond the typical underlying changes in money supply there are very important elements of demand that continue to push the price of physical silver higher and higher. This is despite the fact that silver has been money for much longer then gold.
One element is the elasticity of demand for silver, particularly in the manufacturing of electronics. Silver is the best conductor of electricity known to man and even at a current prices, it is very inexpensive for use in consumer electronics………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

Investors who purchase individual stocks run the risk of losing a significant proportion of their investment through just one poor decision by management.
Qantas investors had their holdings cut by 10% in just one day when management downgraded its earnings forecast last week, while Forge Group investors lost over 80% when cost overruns were reported at two important projects in late November……………………………………….Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

We are not a source for or fans of endless statistics, like the number of ounces purchased from one period over another, how many ounces are available at the Comex, how many ounces have been mined, the demand for v the production of silver, etc, etc, etc. Too boring.
It may satisfy many to know this information, but we are more interested in what translates into results, where can a market turn be determined, where price is likely to go, etc, etc, etc? This is where the challenge lies, for it comes down to timing in order to enter or exit a market, seeking profit opportunity in the process………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

Just over three decades ago, Goldman Sachs bought a niche coffee-and-gold trading firm called J. Aron & Company, becoming one of the first banks to enter the commodity markets.
A year from now, the Wall Street giant may be one of the last ones standing as the former J. Aron traders who now run Goldman mount a lonely defence of their right - and customers’ need - to buy and sell copper, crude or corn. Few others are sticking around as a rocky, on-and-off romance between financial firms and raw material markets turns sour again………………………………………..Full Article: Source

Posted on 09 December 2013 by VRS |  Email |Print

The value of Bitcoins continued plunging today, dropping below $700 - down from just over $1,000 the day before - after the Chinese government questioned the legal status of the virtual currency. A joint statement from several Chinese official bodies such as the People’s Bank of China said Bitcoins are not a currency and cannot be used as a form of payment by any businesses or financial institutions.
This announcement sent the increasingly popular method of payment plummeting from a high of $1,216 to $870 on the MT.Gox Bitcoin exchange. The value of a single Bitcoin has briefly rallied, creeping back to around $1,045, before shedding more than $300………………………………………..Full Article: Source

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