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Commodities Briefing 02.Jan 2014

Posted on 02 January 2014 by VRS |  Email |Print

Many investors expect commodities markets to struggle for a fourth consecutive year in 2014, as steady-but-unspectacular economic growth extends a rough patch for what had been one of the hottest investment niches of the past decade.
In 2013, investors appeared to finally give up on hopes for the return of the “supercycle,” the confluence of tight supplies and surging demand that propelled prices for commodities ranging from oil to aluminum to wheat to records in the past decade………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Commodities posted the first annual drop in five years as supply exceeded demand for corn to sugar to nickel and investors lost faith in precious metals as a store of value amid signs that economies are improving.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 0.6 percent to settle at 632.29 at 4 p.m. New York time, capping a 2.2 percent decline this year. Corn led the retreat with a 40 percent plunge, followed by silver and gold. Commodity-fund investments fell by a record $88 billion to $332 billion in the 11 months ended Nov. 30, Barclays Plc estimates………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

What goes up must come down; and sometimes, unfortunately, come down with a crash. If 2014 is the year commodity prices fall, the progress in Canadian living standards during the past decade and a half could also come undone.
And progress there has been. The income of the typical Canadian family has been steadily rising since the mid 1990s, and while this reflects a number of factors, certainly high commodity prices have played a central role………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

The year 2013 has been a topsy-turvy one for Indian commodity markets and consumers. The price of onions, the most ubiquitous vegetable in Indian cooking, had skyrocketed briefly in the fall to four times its price a year ago.
Meanwhile gold, a favorite investment of individuals, is now in short supply thanks to an increase in the import duties earlier this year. India Real Time looks at the major events that roiled India’s commodity markets in 2013………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Commodity investments this year are on track to register their largest ever outflows. The decline in assets under management in the year till November is the largest on record, indicating withdrawal of funds from the sector by global investors. However, despite this bleak outturn, there are signs that some sectors like base metals are starting to generate investor interest again.
The Federal reserve’s QE stimulus had no major impact on commodity markets and there are unlikely to be very many negative effects as it is tapered. The exception is in precious metals, where investor holdings in these two markets have fallen sharply and a resulting price crash………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

If you are looking for a way to diversify your portfolio in 2014, commodities can be a good idea. But before you invest in this asset class, be sure to do a little homework first. Here are a few things to know about investing in commodities.
What Are Commodities? A commodity is a good or service without qualitative differentiation that supplies a basic consumer market demand. In different words, commodities can come in various forms or types but each commodity within a certain class or group is not fundamentally different than other commodities in that particular class or group………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Oil prices are forecast to range between $80 per barrel and $90 per barrel, largely due to fall of demand as compared to supplies. Oil expert Khaled Boudai told KUNA in an interview that the predicted decrease of the crude price would be as a result of fall of supplies of Iranian, Iraqi and Libyan oil, with the international economic blockade on Iran is forecast to ease off, Iraqi crude output would climb and Libyan crude exports would resume.
Forecast rise of the oil supplies, in 2014, will range between 1.5 to two million barrels per day (bpd), thus a market glut is foreseen, simultaneously with prices’ fall………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

For my last column of 2013, I’ll give a few predictions for the energy markets for 2014 and one in particular where I am almost alone among the energy analysts out there: Oil will see significantly higher prices in 2014 than in 2013.
Most analysts I read see the fundamental picture in oil from a US-centric point of view; that is, an increasingly strong production trend from the oil shale plays here in the US from the Bakken, Eagle Ford and newly developing Permian basin and couple that with an increasing efficiency and demand slackening here in the US which has led them to predict subsequently lower prices. I don’t think they could be more wrong………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

For a third year, international oil prices have gone nowhere. Brent, the global marker, has averaged more than $108 a barrel in 2013 – like it did in 2012 and 2011 – as feared oversupply from the US shale revolution failed to materialise because of production setbacks in other parts of the world.
For many investors who track commodities, and hedge funds who bet on volatility, this has meant poor returns. For investment banks, it has meant a lack of business as consumers see less need to hedge. Only Opec, the producers’ cartel, has been happy, with consistently high revenues………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Drivers fueled up for the lowest price in three years during 2013, according to AAA, and even lower prices are expected in 2014.
The motorist group reports that the national average price for a gallon of regular gas was $3.49 in 2013. That’s down about 12 cents from the record price set in 2012 and is a couple of cents cheaper than 2011………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Gold prices may start 2014 off on the defensive but losses could be limited as prices appear to be bottoming out, said one Danish bank commodity analyst.
Saxo Bank is currently working on its outlook for 2014 and is not expecting to release it until early January, but Ole Hansen, head of commodity strategy at Saxo Bank, spoke to Kitco News to offer some highlights and his expectations for the new year………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Gold fell to a six-month low in thin year-end trade on Tuesday, notching up its biggest annual decline in 32 years as prospects for global economic recovery prompted investors to switch to riskier assets.
After a 12-year bull run, gold has shed 28 percent in 2013, with the U.S. Federal Reserve’s plan to step away from ultra-loose monetary policy undermining the investor rationale for holding bullion………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Peter Hug is on Kitco News to explain gold’s price volatility on the last trading day of 2013. “It looked like the market was caving in,” he says. “[But] this market is nothing but noise.” Hug attributes Tuesday morning’s fluctuations to an extremely thin market as well as traders wanting to lock in their capital losses.
He says that when gold was unable to break through its double bottom of $1,180 this morning, bargain hunters came into the market and pushed it right back up. “I would imagine that the range for today has been seen and everybody that needed to square is probably done,” he adds. Tune in now to hear what Hug expects for the new year for gold and silver………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Since the beginning of gold’s bull market in the early 2000s, we have recommended an unambiguous course of action: Own the physical metal — fully paid for and stored nearby — then sit back and watch the show.
Part of watching the show is the forecast and prediction festivities that greet each New Year. This year’s entries will be of special interest to gold owners coming off the first down year for gold in the past thirteen. As our good friend, James Turk, says further on: “One losing year after 12 winning years is not that bad.”……………………………………….Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

As we draw to the close of another very disappointing year for the gold investor, one might ask how much further the yellow metal has to fall before making something of a sustained recovery. And while our track record on gold price prediction may have been pretty good prior to 2012, since the start of that year it has been decidedly out of sync with reality. Perhaps one can do better in the current year?
On a basic reading of the current situation vis-à-vis gold, one might suggest that, in 2014, gold will end the year at a higher price level than it will likely begin it, but that does not necessarily mean there won’t be a few difficult months ahead before things start to get better………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

The year 2013 put an end to a dozen years of annual gold gains, and the metal’s prospects for recovery in 2014 don’t look great. Gold futures prices lost 28% in 2013, the first yearly loss since 2000 and the largest annual loss for gold futures since at least 1984, according to FactSet data tracking the most active contracts.
It’s a tough reversal for investors who hung onto the precious metal in hopes the forces that increased gold prices by seven times by its peak in 2011 from late 2000 — the popularity of gold-backed exchange-traded funds, rising global wealth and worries about inflation — would stoke demand for the natural resource for decades to come………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

In 2013, silver tended to be more volatile than precious gold. Spot silver prices crashed almost 36% from $30 per ounce to sub-$20 levels. However, in stark contrast to gold ETFs, the holdings in silver ETF shares held on. After the disastrous 2013, what is in store for Silver next year? Analyst community looks to be divided on silver’s prospects.
While most of them expect further drops in prices, a few bet on recovery in silver’s industrial demand in the year ahead………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Nimble investors may find pockets of outperformance next year in platinum group metals (PGMs) and selected industrial metals while abundant supplies weigh down most other commodities.
Platinum and palladium are due to struggle with potential mine closures amid labour trouble in South Africa while zinc, tin and lead could face regional shortages………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Much confusion persists regarding the method, or mechanics, of how the big banks are able to push the price of precious metals around at will for so long. GATA and Ted Butler have long established and outlined the reasons why this occurs (legally). They have also established the foundation that forms the basis of how the manipulation unfolds.
Despite very clear and concise commentary, the message sometimes becomes diluted in its distribution. This situation makes for easy picking from the hard-core opposition who mainly reside, ironically, as part of the professional mining and trading community………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

2013 was a horrible year for commodities. The Dow Jones-UBS Commodity Index, which tracks 22 commodities traded in London and on US markets, fell 9.6% in 2013, the third consecutive annual loss.
The Standard & Poor’s GSCI Spot Index of 24 raw materials showed a more modest 2.2% decline this year, but it was the fifth year in a row of losses. Corn fell by the most last year with a 40% retreat on the back of a record US harvest, while gold’s 28% plunge was the worst performance in three decades and silver dropped 36%………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

As a decade-long commodity boom wanes, Latin America exchange traded funds are slumping. Broad Latin America ETFs have stumbled this year. The iShares S&P Latin America 40 Index Fund is down 13.0% year-to-date and the SPDR S&P Emerging Latin America ETF is down 14.3%.
“There’s a paradigm shift — rising rates and negative export growth at a time when the commodity cycle has ended,” Gustavo Arteta, a currency strategist at UBS AG, said a Bloomberg article. “The region’s countries have been exposed and have to adjust to confront the changes.”……………………………………….Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Investors sell their energy and precious metals funds as year-end approaches. Investors took out a whopping $1.3 billion from commodity-related exchange-traded commodity products this week. Each of the five sectors saw outflows, but energy fared the worst, as investors took out $821 million. Precious metals, broad market (multicommodity), agriculture and industrial metals ETPs saw smaller outflows - $372 million, $72 million, $70 million and $14 million, respectively.
Assets under management in commodity-related exchange-traded products now total $122.2 billion, down 1.1 percent from the prior week………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

The Forward Markets Commission (FMC) is planning several steps in the New Year to revive the commodity markets, which were hit badly by the National Spot Exchange Limited (NSEL) scandal in 2013. The regulator is planning to reduce the curbs on individual members and clients and encourage hedgers in the market.
Position limits of individual clients in the commodity exchanges are likely to be made dynamic soon. At present, these limits are fixed for each client irrespective of the overall open interest………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Latvia has begun the new year by joining the eurozone, becoming the 18th member of the group of EU states which uses the euro as its currency. The former Soviet republic on the Baltic Sea recently emerged from the financial crisis to become the EU’s fastest-growing economy.
Correspondents report much scepticism in the country after recent bailouts for existing eurozone members. But there is also hope that the euro will reduce dependency on Russia………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Previously, beyondbrics looked at stock exchange winners and losers of 2013. Now it’s the turn of the EM currencies. Which currencies felt the full force of the 2013 sell-off, and which survived unscathed?
The chart below shows the top and bottom 10 currencies in dollar spot terms, for the year. The pattern is pretty clear: central and eastern Europe did fine; the fragile five or Biits (Brazil, India, Indonesia, Turkey and South Africa) really were fragile………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

Increased acceptance of the carbon bubble was an exciting development of 2013. Action on carbon prices and fuel efficiency standards are key for 2014. The increasing acceptance of the carbon bubble and stranded assets thesis is the most exciting climate change development of the last year. Although the Carbon Tracker Initiative (CTI) has been propagating the concept for years, the rapid mainstreaming of the idea makes it transformative.
For the first time the Intergovernmental Panel on Climate Change (IPCC) was clear that we have only 15 to 25 years before we bust the 1tn tonne carbon budget. CTI’s carbon bubble research goes further and shows that two thirds of fossil fuel reserves will have to remain in the ground………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

The year just passed may be remembered as a watershed year in climate policy. While climate impacts seem to be occurring more quickly than scientists have ever predicted, we may have witnessed in 2013 the permanent failure of 22 years of United Nations-led climate talks and the “top down” solutions these championed.
Emerging instead, with strong momentum, are “bottom up” approaches anchored around citizens, consumer movements, the private sector, countries and local governments………………………………………..Full Article: Source

Posted on 02 January 2014 by VRS |  Email |Print

While Kazakhstan’s environment minister, Nurlan Kapparov, was promoting his country’s efforts to halt global warming at November’s U.N. climate talks in Warsaw, back home big business was piling pressure on the government to put a key green initiative on hold.
On Nov. 20, the Kazakh national business chamber called on the government to suspend its emissions trading system (ETS) - the first in Asia – for the duration of the country’s industrial development programme, which runs through 2014………………………………………..Full Article: Source

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