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Commodities Briefing 08.Jan 2014

Posted on 08 January 2014 by VRS |  Email |Print

Global assets under management in commodity-related exchange-traded products fell sharply during 2013 mainly due to a steep fall in gold assets, said ETF Securities Tuesday. However, AUM for ETPs for platinum group metals rose. And whereas AUM for silver ETPs fell, this apparently was due to the lower price, as otherwise the metal had a net inflow, according to ETF Securities’ data.
AUM declined to $122.2 billion at the end of 2013 from $199.8 billion at the end of 2012 for commodity ETPs, said ETF Securities, which provides a number of metals exchange-traded funds. AUM for gold ETPs fell to $75.9 billion from $146.6 billion………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Investing is not just about buying and selling securities; it is also about buying and selling asset types. Given the aging bull market in stocks, downside pressure on bond prices, and near-zero yields for cash, asset allocation in 2014 will be a challenge, to say the least.
Tactical asset-allocation in 2014: With a tactical approach to your portfolio structure, you will have a target allocation, but you may sometimes find yourself “overweight” some assets and “underweight” others. For example, let’s say your target asset allocation is 70% stocks and 30% bonds………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

With a mere 30 million people living within its borders, Peru is only slightly larger than the state of Texas. But as the world’s third-largest producer of both copper and zinc and its sixth-largest source of gold, the country enjoyed an outsized benefit from a cresting wave in global commodities markets over the last decade.
Between 2002 and 2012, as the price of most commodities soared, Peru’s average annual GDP growth rate was 6.4 percent. As recently as 2010, the Latin American country’s GDP expanded by 8.8 percent, making it one of the fastest-growing economies in the world………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

It what sounds like a dream scenario for U.S. consumers, Ian Bremmer, president of Eurasia Group, says oil prices could “crater” in 2014 and OPEC could “fall apart.” But a serious decline in energy prices could lead to a nightmare for U.S. policymakers as “expanding unrest” in the Middle East is one of Bremmer’s ‘top risks’ of 2014.
First, the good news: If a comprehensive deal over Iran’s nuclear program is reached — and Bremmer sees a-better-than 50% chance it will — “then oil prices are cratering through $80″ (the presumptive floor currently set by the Saudis), he says. “OPEC falls apart in that environment.”……………………………………….Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

The pace of U.S. oil production growth will begin to slow in 2015, even as global demand continues to rise, allowing OPEC to pump more crude for the first time in three years, U.S. government forecasts showed on Tuesday.
In its first projections for 2015, the U.S. Energy Information Administration said U.S. output will rise by 9 percent or 750,000 barrels per day next year to reach 9.3 million bpd, the highest in 43 years………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

It has been a long time since Iran has been able to throw its weight around as an oil producer. American-led sanctions have cost Tehran as much as US$80 billion in lost oil revenues since 2012 and its rival Saudi Arabia has long controlled world prices with its dominance of Opec.
But the last meeting of oil producing nations in November was notable for its Iranian sabre rattling, with the country’s oil minister pledging to disregard Opec quotas of three million barrels per day (bpd) – regardless of the effect on global prices………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Oil Minister Bijan Namdar Zanganeh said members of the Organization of Petroleum Exporting Countries believe the organization will not face any major challenges in 2014. In an interview with OPEC’s monthly bulletin in December, Zanganeh said there will be production and investment opportunities for OPEC in 2014, IRNA reported.
Referring to the fact that some producers are extracting crude from heavy oil reserves, the oil minister said OPEC members are not against it. “This only constitutes a portion of the production of non-OPEC members,” he said………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Ministers from Germany, France, Italy and five other countries call for new renewable energy target in addition to carbon goal. Ministers from Germany, France and six other countries have called for the European Union to set a 2030 goal for renewable energy use, in opposition to their British counterpart who advocates a sole greenhouse gas emissions target.
A 2030 renewables goal, which would be part of a package of EU measures on energy and climate change, would cut dependency on fossil fuel imports and boost jobs and economic growth, the group of ministers said in a letter dated 23 December 2013 and seen by Reuters………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Investment bankers see gold-mining deals rebounding this year from a near-decade low as producers target assets at fire-sale prices after the metal plunged.
Gold-mining companies are close to their cheapest relative to book value in at least two decades, according to data compiled by Bloomberg. Meanwhile producers will be enticed to replace some of the output lost when they sold or curtailed less-profitable mines, said Barclays Plc’s Paul Knight………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Chinese gold buying has noticeably picked up at the start of 2014, helped by softer prices and the approach of Chinese New Year holidays, traders and analysts said. The premium in China has risen to $20 an ounce, perhaps $10 higher than a week ago, said Bernard Sin, global head of precious metals trading with MKS (Switzerland) SA.
“That is an indication that demand is relatively healthy,” he said. He also cited good demand in Hong Kong and Thailand………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Although gold remains one of the key commodity contributing significantly to the country’s foreign exchange earnings, the persistent price fluctuations in the world market are threatening and would have far reaching impact to the economy.
Economists say in the long run the declining gold prices will lead to output cut that could ultimately result into reduced size of taxable profit, slashing down of jobs as well as affecting mining firms corporate social responsibilities. Statistics from the Bank of Tanzania (BoT) show that the export value of gold in the year ending October, last year declined following a decrease in both volume and unit price………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

As every rare earth investor knows, China holds the key to the prices of the metals used in modern high-tech applications such as smart phones, lasers, green technology and military hardware.
The country produces over 90 percent of rare earths, from valuable heavy rare earths like dysprosium to relatively low-value and not-so rare elements like cerium, meaning that China controls the prices. As we have reported frequently in these pages, 2013 has not been a good year for REE prices, which as a group, have fallen around 60 percent since reaching record highs in 2011………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Copper fell for the third time in four sessions in New York on concern that new financing rules may curb demand in China, the world’s biggest user of the metal.
China’s Cabinet imposed new controls on shadow finance, the multi-trillion-dollar lending that operates outside of the country’s banking system, according to three people familiar with the matter. Some copper is used in the Asian nation as collateral to back loans………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

The commodity markets saw a choppy 2013, with soft commodities - coffee in particular - lacking luster. A supply glut resulted in a 20% decline in the price of the commodity last year. This is, in fact, the third consecutive year of negative performance from coffee.
However, toward the beginning of last month, the robusta variety of coffee saw some strength. The upside can be partially attributed to the seasonal demand pattern, wherein the cold December month usually gives coffee prices a boost………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

The return, close to a record high, in hedge funds’ bets on falling wheat values, coupled with cold fears could - ironically - fuel a revival in prices, which took aim at a third successive day of gains on US markets.
Managed money, a proxy for speculators, cut its net long position in futures and options in the major 13 US-traded agricultural commodities by nearly 40,000 contracts in the last week of 2013, data from the Commodity Futures Trading Commission regulator showed………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Zimbabwe’s hopes of establishing an Agriculture Commodity Exchange (ACE) by March 2014 have been dampened by persistent low grain and cereal output, analysts say. The southern African country must address production challenges as part of a broader strategy to revive agricultural production to peak levels and sustain the exchange, said Takunda Mugaga, senior reseacher at Research firm Econometer Capital Global (Econometer).
“A depressed supply does not make setting of a commodities exchange feasible so it has to be addressed,” said Mugaga, who also sits on the board of Zimbabwe’s largest industry body, the Zimbabwe National Chamber of Commerce………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Move over Dogecoin: the Herncoin is here. But what can making your own currency teach you about the world of bitcoin? Bitcoin may have become a thing of fascination for the media very recently, but the digital currency actually celebrated its fifth birthday this month as its value hovered at around $1,000 per coin.
Bitcoin was never intended to be the one cryptocurrency to rule them all, because anyone can make their own version of it. The code which underpins the currency is released under what’s known as an open-source licence. Anyone can use it themselves, and alter any aspect they want, in order to create a whole new currency………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Bitcoin, the recent center of the media attention has celebrated its fifth anniversary this month marking its value around $1,000 per coin.Bitcoin was never meant to monopolze the crypto-currency niche. What is more, the code was released under an open-source license, which allows anyone use it or alter its aspects to cretae better version or a new currency altogether.
As a result, an entire «family» of bitcoin-based crypto-currencies have emerged in the past years. The most promising of them, Litecoin, was created in 2011, as a response to bugs in the original Bitcoin protocol………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

With the ink barely dry on the redesigned $100 bills released in October, Dan Humphrey and colleagues at the Bureau of Engraving and Printing (BEP) are already exploring new U.S. currency security features for the future.
“The primary reason to redesign the currency is to deter and prevent counterfeiting,” said Humphrey, a program manager in product development. “We’re now working on what technology platform and design to use next time around. We are constantly looking for ideas.”……………………………………….Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

As the clock winds down on the first year of California’s carbon trading market for reducing greenhouse gas emissions, state officials say they have a lot to celebrate. The state’s cap-and-trade program, which could become a model for other US states, sets a limit on the amount of heat-trapping gases businesses can emit and allows them to trade excess permits.
Regulators this year held a series of permit auctions, with strong demand from buyers. The program poured $US533 million into state coffers and is expected to raise $US1.5 billion next year………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

Carbon prices are poised to rebound from a three-year slump as European Union member states vote today on a plan to reduce a record glut of pollution permits. The cost of emitting carbon dioxide will jump to 7.75 euros ($10.55) a metric ton by the end of the year, from 4.76 euros yesterday, according to the median of nine analyst and trader estimates compiled by Bloomberg News.
Representatives of the EU’s 28 member states will cast their final vote after 2.30 p.m. in Brussels on the plan that would temporarily cut the number of permits by half of the annual supply for the 12,000 power plants and factories in the trading system………………………………………..Full Article: Source

Posted on 08 January 2014 by VRS |  Email |Print

The European Union’s emergency plan to help boost carbon prices may get all necessary regulatory approvals as soon as next month and start around April, according to two people with knowledge of the matter.
The European Commission, the bloc’s regulatory arm, has signaled it may seek a shorter obligatory scrutiny period of the proposal to temporarily cut oversupply in the EU emissions- trading system after a vote by member states tomorrow………………………………………..Full Article: Source

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