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Commodities Briefing 12.Feb 2014

Posted on 12 February 2014 by VRS |  Email |Print

To many investors, 2008’s global financial crisis marked an end to the so-called commodity supercycle of double-digit annual growth since the late 1990s. More than five years later, investors still remain cautious about commodity funds, which have lagged behind the broader market.
But many financial advisers say they aren’t ready to give up on the asset class, noting some select segments offer growth opportunities as the global economy improves………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Emerging markets turmoil drove investors away from commodity exchange traded products (ETPs) in January due to concerns about demand growth, but gold outflows slowed as its safe haven status was revived.
Some $1.7 billion was withdrawn from commodity ETPs in January global data from BlackRock, the world’s biggest asset manager, showed. ETPs, whose value is linked to moves in their underlying assets, offer an easy route into commodities and allow asset managers to make quick, tactical shifts………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Federal Reserve Chairman Janet Yellen pledged that the regulator will make changes in its oversight of banks’ role in the commodities business, which has attracted regulatory and lawmaker scrutiny.
“The Federal Reserve’s main focus in our supervision of these areas is to make sure that banks operate in the commodities activities in a safe and sound manner,” Yellen said at a House Financial Services hearing………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

A group of commodity firms came out against a new U.S. rule to curb market speculation in a letter on Monday, after banks successfully shot down an earlier version of the position limits rule in court.
The new rule by the Commodity Futures Trading Commission attracted well over 100 comment letters by industry participants after the agency - which regulates swaps and futures - launched it in November………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) rose 150,000 barrels per day (b/d) to 29.87 million b/d in January from 29.72 million b/d in December as an increase of 280,000 b/d in still-beleaguered Libyan production more than offset drops in Angola, Iraq and Saudi Arabia, a just-released Platts survey of OPEC and oil industry officials and analysts showed Monday.
“The Libyan situation has a long way to go to play out but this is clearly good news,” said John Kingston, Platts global director of news. “Steady increases in Libyan output will help the country recover and will help bring stability to a market that is getting hit by various outages around the world.” Libyan production climbed to 530,000 b/d in January from 250,000 b/d in December after the restart of production at the 340,000 b/d-capacity Sharara field at the beginning of the month. (Press Release)

Posted on 12 February 2014 by VRS |  Email |Print

United States Oil, a major exchange traded fund for oil, is down for the last week, six months, and year of market action. It is also off by more than 1 percent for 2014.
With crude oil falling in price, more price declines should be ahead for United States Oil and other securities in the sector. There are three reasons why long term investors should be pleased by this price movement. It makes it easier for the world to recover from The Great Recession………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

The potential for a golden age of gas comes along with a big “if” regarding environmental and social impact. The International Energy Agency (IEA)–the “global energy authority”–believes that this age of gas can be golden, and that unconventional gas can be produced in an environmentally acceptable way.
We didn’t predict a golden age of gas in 2011, we merely asked a pertinent question: namely, are we entering a golden age of gas? And we found that the potential for such a golden age certainly exists, especially given the scale of unconventional gas resources and the advances in technology that allow their extraction………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

It is time to reconsider gold. Reports that buying in China rose 41% last year to a new record suggest Chinese investors are under the spell of gold, perhaps because of concerns about the stability of their own economy. If the China Gold Association’s data on buying prove significant, gold may finally advance after several years of declines.
With the SPDR Gold Trust at $123.75, investors can buy the GLD January $124 call that expires in 2015 for $8.40. The trade thesis is largely predicated on an eastern retelling of a tale well-known to American investors: an economy weakened by financial sector excesses that drives citizens to buy something they think is a safe asset………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

India’s trade deficit narrowed in January, thanks to the country’s strict import controls on gold imports. But analysts are warning that even though the figures are less alarming, now is not the time to let bullion back in.
The Reserve Bank of India (RBI) imposed tough rules on gold imports last year in an attempt to tackle the country’s crippling current account deficit. India was among many of the emerging markets that saw their currencies get battered when the U.S. Federal Reserve first floated the idea of tapering its quantitative easing program last summer………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Commerzbank forecast higher bullion prices even after 500-tonnes of gold ‘vanishes’ in China. Gold hit a three-month high on Tuesday morning, defying most expert views that 2014 would see further falls in the precious metal a day after a report revealed 500-tonnes of bullion is missing somewhere in China.
However, the recent rally still has many analysts questioning whether the recent turnaround is just a “dead cat bounce” or a sustained revision in market sentiment?……………………………………….Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Gold prices are poised to extend their 2014 rebound and reach $1,400 an ounce, the highest since September, according to technical analysis from Citi Futures and RBC Wealth Management.
Prices yesterday settled above the 100-day moving average for a second straight day for the first time since October. The metal has also closed above its 50-day measure in every session since Jan. 23. The pattern signals prices will rally 8.5 percent by the end of March, Chicago-based Sterling Smith of Citi Futures said………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Arguably, the decline in the gold price over the past two years has been exacerbated by sales out of the gold ETFs, and particularly out of the SPDR gold ETF, GLD, where 551 tonnes of gold were offloaded last year (with other ETF holdings shedding a further 200 tonnes or more), following on from a little under 100 tonnes in 2012.
There are signs this year that this may be turning around with no sales out of GLD over three of the past four weeks – indeed overall there have been limited gold purchases which have cumulatively exceeded the outflow seen in the one week which saw this………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Gold is enjoying a great start to 2014, hitting a three-month high on Tuesday as it notches its first five-day win streak since August. But Credit Suisse’s gold expert cautions against overstating the significance of the move.
In fact, he says that if the economy gets through its recent “soggy patch,” gold could fall all the way to $1,000 this year. “The fund flows that we’ve seen so far this year have been more short covering than new money coming in and adding to longs,” said Credit Suisse’s head of precious metals research, Tom Kendall……………………………………….Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

The world’s biggest platinum-backed exchange-traded fund, based in South Africa, reported its largest ever outflow last week after the rand platinum price hit 5-1/2 year highs, prompting domestic investors to cash in gains.
Johannesburg-based NewPlat ETF, which tracks the rand-denominated platinum price, climbed more than 12 percent from the start of the year to its late January high as the South African unit hit five-year lows against the dollar………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Over the last few years, gold has become one of the most polarizing assets in the investing world. After surging to new highs in mid 2011, the precious metal had investors and analysts alike clamoring for more gains.
The commodity suffered a correction in 2013, finally ending a 12-year bull-run while invoking the interest of many who hope to time the bottom. For those looking to invest in gold, we outline 25 ETFs that take varying approaches to the metal and help you add gold exposure to your portfolio……………………………………….Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Finding the best ETFs is an increasingly difficult task in a world with so many to choose from. You Cannot Trust ETF Labels: There are at least 49 different Large Cap Value ETFs and at least 237 ETFs across all styles. Do investors need that many choices? How different can the ETFs be?
Those 49 Large Cap Value ETFs are very different. With anywhere from 18 to 1,412 holdings, many of these Large Cap Value ETFs have drastically different portfolios, creating drastically different investment implications………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

The carbon prices have plunged over the past couple of years, but the carbon-related exchange traded note is making a swift rebound ahead of the European Commission’s plan to cut the supply of permits.
The iPath Global Carbon ETN jumped 46.5% year-to-date and gained 54.1% over the past year. GRN tracks the the Barclays Capital Global Carbon Index, which follows the performance of the most liquid carbon related credit plans, including both the European Union Emission Trading Scheme and the Kyoto Protocol’s Clean Development Mechanism………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

There’s something Wild West about currency devaluations. Not just because they’re the mainstay of frontier economies, but there can be a pretty big element of unpredictability about how they pan out.
News that Kazakhstan was devaluing its currency by nearly 20% against the dollar follows widespread currency slides across emerging markets during recent months. In some cases, the national governments welcomed their currency’s weakness. Like Russia, which is looking for a weaker ruble to help spur flagging economic growth………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

The investment community was anxiously awaiting Friday’s employment report. Would it show a pickup in hiring in January, making December’s abysmal numbers seem like an aberration? Or would it confirm a pattern of weakness? Unfortunately for the U.S. economy, it was the latter.
Almost immediately, equity prices shot up on the assumption that the data would cause the Federal Reserve to re-assess the strategy of tapering its monthly bond-buying program. It’s the old belief that bad news for the economy is good news for stocks, which represents a fundamental disconnect between Main Street and Wall Street………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Scotland’s hopes of keeping the pound will come under attack from George Osborne, Danny Alexander and Ed Balls. Britain’s main political parties are drawing up plans to deliver a powerful message to the Scottish people that the remainder of the UK will refuse to form a currency union with Scotland if voters endorse independence in the referendum in September.
Amid strong polling evidence that financial matters have become the decisive factor in voters’ minds, George Osborne, Danny Alexander and Ed Balls are each planning to deliver an unequivocal warning that an independent Scotland could not keep the pound………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

New state guidelines from China suggest the country will soon be producing less grain than it consumes, ending a long-standing pledge to be self-sufficient in its staple foods. It might not sound much. But a China without self-sufficiency will have major ramifications around the world.
Today’s Financial Times cites new guidelines from the State Council, the most significant decision-making body in China’s national government, which set out the country’s food policy for the years ahead. It notes that, for the first time, the country has set a grains output target well below domestic consumption rates………………………………………..Full Article: Source

Posted on 12 February 2014 by VRS |  Email |Print

Hubei province will auction up to two million carbon permits at a government-set minimum price next month to kick-start the nation’s sixth pilot emissions trading scheme (ETS). Hubei’s carbon market will be only the second to sell a share of the permits. In most of the other trial schemes, the permits have been handed out for free.
China, the world’s top emitter of greenhouse gases, is seeking to limit its impact on climate change, and successfully operating the schemes is seen as vital for the foundation of a national emissions market………………………………………..Full Article: Source

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