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Commodities Briefing 18.Dec 2013

Posted on 18 December 2013 by VRS |  Email |Print

Commodity-linked investment funds are headed for record outflows in 2013, with an $88bn decline in assets under management in the year to November, according to a Barclays report.
Investors have withdrawn a net $36.3bn from commodity funds this year – also a record – as prices fell across the market, from coffee to nickel. The bulk of the sell-off came through gold exchange traded funds (ETFs), as the decade-long bull run for the yellow metal ended, with prices falling 26 per cent this year………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Commodity assets lost $88-billion (U.S.) in value through November, the largest decline for the first 11 months of the year on record, from a combination of investor exits and from price drops that took place mostly in gold, Barclays said on Tuesday.
In terms of withdrawals alone, investors took out a net $36.3-billion in the 11 months of the year so far, setting another record over that time period, the London-based investment bank said in a research note………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Commodity investments are heading for record outflows driven by withdrawals from gold exchange-traded funds as some investors lost faith in the traditional store of value, according to Barclays Plc.
Assets under management declined $88 billion since the start of the year through last month, Barclays said in a report e-mailed today. Net outflows reached $36.3 billion, also set for a record decline, it said. Investments in precious metals slid 40 percent since 2012 to $119 billion………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

After dipping sharply in early November, crude oil prices rallied through the rest of the month, regaining all of the previously lost ground. The price of Kuwait Export Crude (KEC) rose from a low of $101 per barrel (pb) in early November to $107 a month later, $3 above its November average.
Brent crude prices also rose from a low of $103 in early November to $114 – well above the trading range for most of the year. The price of West Texas Intermediate (WTI) – the main US crude benchmark – once again bucked the trend, failing to see any sort of bounce until the first few days of December. At a price of $92 WTI’s discount to Brent reached $20 in late November, its highest since March………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Shortly after the four-page, six-month long nuclear deal was reached between p5+1 (United States, Russia, France, China, Britain and Germany) and the Islamic Republic of Iran (and after some signs pointing towards the easing of sanctions on Tehran), Iranian authorities have become more assertive and authoritative in increasing their influence in regional and international arenas, not only geopolitically but also economically.
This week, ahead of the upcoming OPEC meeting, Iran threatened to trigger a price war in the global oil markets. Iranian authorities warned OPEC’s 12 members (including Iraq, Kuwait, Iran, Saudi Arabia and Venezuela) that Tehran would raise its oil output even if prices of crude oil tumble to $20 a barrel on the global market………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Since the 1960s, OPEC (Organisation of the Petroleum Exporting Countries) has dominated global oil markets, controlling production, exports and prices. The shale boom however, particularly in North America, could shift some power away from the cartel, to small, nimble companies.
The Shale Age is the age of the nimble junior, and exploration has revealed oil and gas resources that could forever alter the global production profile………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Data released by Barclays Capital showed that total global commodity asset values fell by a record $88 billion to $332 billion in the first 11 months of the year. The UK investment bank said $88 billion headline decline in commodity assets under management is the largest on record as is the net $36.3 billion withdrawal of funds from the sector by investors.
Barclays said the overall decline was mainly as a result of price falls and investors abandoning the precious metals sector, particularly gold………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

As England’s cricket supporters are discovering, every good run has to come to an end. For more than a decade, it seemed as if gold could only rise in price. But with a couple of weeks to go, bullion seems set to record its worst year since 1981, according to Adrian Ash of BullionVault - a 24% loss against 1981’s 32% decline.
It is an appropriate comparison in more ways than one; 1981’s plunge followed the long 1970s bull run that reflected high inflation after the break-up of the Bretton Woods monetary regime and the loss of the last currency link to bullion. It was also the year when it became clear that Paul Volcker broke the back of inflation in America………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Base-metals analysts are describing a Goldilocks scenario for copper in 2014 – not too hot and not too cold. Production is expected to increase, but leave the market in only a modest supply surplus with demand that most analysts forecast to hold up although not be spectacular. Against this backdrop, most said they look for copper to remain largely range-bound in 2014.
“I’m not super bearish. I’m not super bullish either,” said Leon Westgate, commodity strategist at Standard Bank, in an interview with Kitco News………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Despite the wintry Arctic chill, the economic recovery is in full bloom. Or is it? Wages are stagnant, unemployment remains stubbornly high at seven percent, and consumer confidence remains tepid at best. The average American investor clearly isn’t enjoying the Wall Street perpetual momentum machine.
Are stocks fairly valued (i.e. cheap), and is the current momentum sustainable? If you consider the charts, it looks like well-heeled investors think the market is inexpensive; how else can you explain the current bull market marathon? This is after an increasingly larger number of companies on the S&P 500 warned about revenues and earnings………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Commodity prices took a sharp downward turn in 2013, but the good news appears to be that it will not get any worse in 2014. According a recent report, analysts at Moody’s Investors Service say that average prices for aluminum, copper, nickel and zinc have bottomed, but that “prices in 2014 will on average be lower than 2013 levels.” That is due to the relatively high prices in force at the end of 2012.
Producers of these base metals will do what all miners are doing: focus on lowering costs and reducing capital spending. Increases to operating costs are expected to moderate, and the focus on cost savings will help offset the lower expected prices………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

The major banks have mixed forecasts for base metals for 2014, with some banks upbeat on the sector. Those who see higher base metals prices said the industrial metal’s outlook could improve in 2014 if the global economic recovery occurs as economists forecast, and China will also remain important for the base metals.
Those who see weaker prices said current high inventories and supply coming online will pressure the metals………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Bohai Commodity Exchange, the only mainland exchange allowed to do cross-border yuan trading, launched a platform in Hong Kong on Monday – its first step in expanding internationally.
Yan Dongsheng, board chairman of the exchange, told South China Morning Post that its online trading platform would allow Hong Kong and foreign investors who join the bourse to make yuan settlements………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

The London Metal Exchange may have a Hong Kong member soon. It also plans to launch a clearing house and new commodity products in the city next year.
The announcement of the world’s largest metal exchange’s expansion plans in the city came as Tianjin-based Bohai Commodity Exchange introduced its online trading platform to Hong Kong companies………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

Global cocoa supplies are headed for the longest production shortfall in more than five decades as chocolate demand surges in Asia. Cocoa use will top output by about 70,000 metric tons in the 12 months started Oct. 1 and deficits will persist through 2018, a six-year stretch that would be the longest since the data began in 1960, said Laurent Pipitone, head of statistics at the International Cocoa Organization in London.
Prices may rally 15 percent to $3,200 a ton by the end of 2014, according to the median of 14 trader estimates in a Bloomberg News survey………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

The U.S. government still doesn’t consider bitcoin a legitimate currency—and investors may want to keep it that way. Tax pros generally agree any income achieved by selling bitcoins must be taxed. “Bitcoin is subject to income and capital gains taxes like anything else,” says Stephen Pair, co-founder and chief technology officer of BitPay, a payment services provider that specializes in virtual currencies.
The exact way they are handled, however, could have very different tax implications. In Norway, for example, the tax authority there declared Monday that bitcoins aren’t a real currency but that they would be taxed as an asset and charged capital gains tax……………………………………….Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

The recent UN climate talks in Warsaw failed to give carbon markets the certainty it needed, but there are some signs of revival, say experts, and an international carbon reserve could be the answer.
On the surface, the recently-concluded United Nations climate talks in Warsaw have failed to revive the global carbon market with observers saying it could remain “in the coma” for years. But experts point to certain signs of life in the market, which could see a price recovery in the next two years………………………………………..Full Article: Source

Posted on 18 December 2013 by VRS |  Email |Print

An official report to the United Nations climate change body shows a widening gap between New Zealand’s targets post-Kyoto and projected emissions in the next two decades. The ‘Sixth National Communication under the UN Framework Convention for Climate Change and the Kyoto Protocol’ provides an overview of New Zealand’s current carbon emissions, projected emissions to 2030 and a summary of the country’s climate change initiatives and targets.
Projections included in the report show emissions will likely reach double that of 1990 levels by 2015, and continue to rise throughout the following decade………………………………………..Full Article: Source

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