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Commodities Briefing 06.Jan 2014

Posted on 06 January 2014 by VRS |  Email |Print

The global economic narrative is changing rapidly, with the emphasis moving from Asia and the fast-growing markets in the East, back to the developed West. Commodities investors are shifting their strategic focus away from China for 2014 as they search out clues as to the direction of prices.
The global economic narrative is changing rapidly, with the emphasis moving from Asia and the fast-growing markets in the East, which have driven the commodities “super-cycle” over the past decade, back to the developed West………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

Commodity prices mainly fell this week in low-volume trade on the back of weak Chinese economic data, while many participants were away for an extended Christmas and New Year break.
Beijing released figures on Friday showing that growth in China’s services sector slowed sharply in December. The data followed news on Wednesday and Thursday that manufacturing in the country had also suffered a slowdown in growth last month. On the upside, precious metals eked out slender gains following heavy losses during 2013………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

Everything to be earned that year has to be created from nothing even if the necessary infrastructure is in place. So it is with any analysis of what lies ahead for commodities in 2014. Nothing happens on its own. Metal has to be mined to be satisfy fresh demand from consumers.
But just because they bought a car last year does not mean they will buy another this year. Fortunately it seems consumers are becoming more confident and are likely to increase spending in 2014………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

With global economic growth in 2014 projected to increase to 3.5 per cent from 2.9 per cent in 2013, world oil demand is forecast to rise by one million barrels per day, according to the latest monthly bulletin of the Organisation of Petroleum Exporting Countries (OPEC).
World oil demand is expected to grow by one million barrels a day (b/d) in 2014 compared with 900,000 b/d last year, supported by improved performances by the emerging economies and as the global economy continues to recover in general, it said………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

According to a recent article in Bloomberg, three of OPEC’s top producers have again rejected the idea that the organization needs to cut oil production in 2014. The oil ministers from Saudi Arabia, Iraq, and Kuwait last month all noted that increased U.S. oil production wouldn’t be enough to overcome production losses in Iran and Libya.
In fact, the Saudi oil minister went so far as to say that the reason U.S. benchmark West Texas Intermediate crude has been trading near $100 recently is “because the market is in fear of a shortage of oil and not in fear of oversupply.”……………………………………….Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

Gold analysts are the most bullish in a year on speculation that investors are reducing near-record bearish bets after the biggest plunge in prices since 1981.
Fifteen analysts surveyed by Bloomberg News expect gold to rise this week, two are bearish and four neutral, the highest proportion of bulls since December 2012. Short positions held by hedge funds and other large speculators jumped almost fourfold from October to Dec. 24 as the bear market deepened, the latest U.S. Commodity Futures Trading Commission data show……………………………………….Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

Gold is expected to see a “modest recovery’ in 2014 after last year’s dramatic decline in prices, according to market analysts. The precious metal lost nearly 30 percent of its value in 2013, its worst decline in decades. The end of the 12-year bull-run came ahead of the U.S. plan to reduce its monetary stimulus.
Jeff Rhodes, founder and managing consultant for Rhodes Precious Metals Consultancy DMCC in Dubai, said that 2014 would be “a year of consolidation and modest recovery” in the gold market. “My feeling about 2014 is that you’re likely to see the market consolidate and stabilize,” Rhodes told Al Arabiya News………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

If 2013 will go down as the year gold lost its glitter, 2014 may be remembered as the era it recovered some sparkle, yet it remained dull. This seems to be the main conclusion of some of the most followed gold forecasters, such as Goldman Sachs, J.P. Morgan and Morgan Stanley, among others.
Goldman Sachs is predicting a “significant decline” of at least 15% this year. And analysts at J.P. Morgan lowered their forecasts on gold prices by 10% to $1,263 an ounce for 2014 and by 12%to $1,275 for 2015, according to their research note………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

It is worth recalling that it did in 2013 as well – and then went downhill thereafter for most of the rest of the year. Gold has moved up quite sharply, in thin trade, in the opening days of 2014, but it is worth recalling that it did in 2013 as well – and then went downhill thereafter for most of the rest of the year.
The pro-gold element has already seen light at the end of the tunnel with a positive gold price start to 2014. But don’t get too carried away yet – it could just be a train coming in the other direction! While this observer does see a turnaround in the gold price coming, it may not be this soon!……………………………………….Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

The crash in gold prices was one of the biggest shockers of 2013. A correction had already begun at the fag end of 2012, but prices really crashed in 2013, triggered by fears that the US Federal Reserve would scale down and do away with the economic stimulus.
However, Indian investors in gold were cusioned against the crash due to the fall in the rupee. As the dollar became costlier, gold continued to fetch a higher price in India………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

In 2013 the metals industry suffered due to weak demand, with emerging markets failing to prop up demand. The start of 2014 is already promising some excitement for the metals industry. Two international events will be watched closely by investors.
One is the Indonesian government’s decision to insist on value-addition to locally mined ore before it can be exported. The new rules are set to come into effect from 12 January. According to a Bloomberg News report, the country accounts for 18-20% of global nickel supplies, about 10% of aluminium supply from bauxite and 3% of copper suppliers………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

The year began with the 20th anniversary of SPDR S&P 500, the first and still the largest ETF in the U.S., and throughout 2013 investors kept up their voracious appetite for exchange-traded funds.
Investors pumped a net $188.5 billion into U.S. ETFs and related exchange-traded products, according to IndexUniverse LLC. That topped 2012’s record of $188.4 billion, despite heavy withdrawals from SPDR Gold Shares as the price of gold tumbled………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

2013 wasn’t particularly good for commodity investing as the dollar gained more strength compared to several currencies, and stock markets kept hitting new highs day in, day out. Despite this, some agricultural-based products turned around as the year progressed, probably on supply crunch for some soft commodities and global recovery which led to enhanced consumption.
The performance of the broad agricultural commodity fund PowerShares DB Agriculture Fund (DBA) displays this gradual improvement. The product lost 14% so far this year while it shed just 3.5% in last three months………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

2013 was a phenomenal year for stock investing, as the S&P 500 added more than 30% in the time frame. This came after a flat 2012, and the great performance was had despite worries over the taper and still muted economic growth.
It was also a great year for the ETF world as well, as close to 100 (net) new products hit the market, and assets under management crossed the $1.5 trillion mark. Now there are more than 1,500 choices out there, giving investors a near paralyzing amount of ways to slice and dice exposure to hundreds of market niches………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

JP Morgan Asset Management is set to liquidate its Alternative Ucits commodities fund next month following a drop in assets under management.
The JPM Highbridge Diversified Commodities fund is set to be closed on February 7, according to a letter to shareholders seen by Citywire Global. It ceased to accept new money into the fund from December 12 2013 except in exceptional circumstances, JP Morgan said………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

The currency wars that Brazilian Finance Minister Guido Mantega first warned of in 2010 have never quite reached a boiling point. But currency skirmishes are certainly under way as unprecedented loose global monetary policy continues to reverberate through markets.
In Europe, both the euro and the Turkish lira, and the headaches they pose for their respective central banks, are testament to that. The first trading day of 2014 brought some relief for the European Central Bank, as the euro recorded its sharpest one-day decline against the dollar since November. The single currency hit a two-year high above $1.38 as 2013 closed, sparking worries about its impact on growth and inflation………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

Sunday marks 115 years since Egypt printed its first banknotes, the Egyptian pound (LE), known back then as “Abou Gamaleen.” Egypt’s Central Bank printed the first paper notes on 5 January, 1899 - 65 years after Khedive Abbas Helmy issued a decree to introduce a new Egyptian currency to replace the piaster, state news agency MENA reported.
The Egyptian pound was valued at 7.43 gm of gold between 1885 and 1914. The value of the LE remained tied to the pound sterling until 1962 where it began being valued based on the United States dollar (USD)………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

Bitcoin is a digital currency — a form of Internet cash — that was introduced in 2009. But it isn’t printed, like a dollar. It’s a form of money called cryptocurrency. Transactions are made by updating a log, but there’s no exchange of tokens.
Buyers and sellers are identified through ID numbers, and bitcoin can be used to buy goods and services. While bitcoin use is limited, an increasing number of merchants are accepting them as payment………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

Low carbon targets set by governments blamed by analysts for falling carbon price in EU and UN schemes. The value of global carbon markets dropped 38% to 38.4 billion euros ($52.9 billion) in 2013, as prices slid in the main EU and UN schemes and trade limited in new programmes, analysts at Thomson Reuters Point Carbon said this week.
The value of carbon permits and credits traded was down from 62 billion euros in 2012 and 96 billion euros in 2011, a two-year period in which benchmark EU carbon permit prices fell to 5 euros per tonne from 18 euros, the analysts said in a a report………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

In most of the carbon-trading world, it has been getting cheaper in recent years to buy the rights to pollute the atmosphere with climate-changing carbon dioxide.
That’s largely because recession-afflicted Europe is awash with too many carbon allowances for its trading scheme to have any real bite, and because demand for U.N.-issued allowances has crashed along with hopes of a meaningful international climate agreement to replace the Kyoto Protocol.But in a bleak year for carbon markets, North America was a rising star………………………………………..Full Article: Source

Posted on 06 January 2014 by VRS |  Email |Print

Heavy polluting Chinese companies could struggle to secure new loans and subsidies from the government, under new plans designed to help tackle the country’s ongoing smog crisis. According to Bloomberg reports, China’s Ministry for Environmental Protection last week issued a statement confirming that a new environmental credit rating system will come into effect on 1 March.
Under the new initiative, companies will be given a colour-coded score on a spectrum from red to green, based on how much air pollution they emit and the steps they are taking to enhance environmental protection………………………………………..Full Article: Source

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