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Commodities Briefing 13.Feb 2014

Posted on 13 February 2014 by VRS |  Email |Print

Commodities climbed to the highest since December as extreme weather fueled supply concerns for crops and energy at a time of rising imports by China, the world’s largest consumer of everything from metals to pork.
The Standard & Poor’s GSCI Spot Index of 24 commodities gained 0.3 percent to 636.4641 at 1:45 p.m. New York time after touching 639.9293, the highest since Dec. 30. Sugar headed for the biggest increase since Jan. 31, while natural gas advanced for a second day. Coffee was also among the biggest gainers, and cocoa reached the highest since 2011………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Commodities climbed to the highest since December as extreme weather fueled supply concerns for crops and energy at a time of rising imports by China. Goldman Sachs Group Inc. says this year’s gains will be short-lived.
The Standard & Poor’s GSCI Spot Index of 24 commodities gained 0.2 percent to settle at 636.22 yesterday, after touching 639.93, the highest since Dec. 30. Coffee led gains, and cocoa reached the highest since 2011. Gold capped the longest rally since June 2012………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Many analysts have postulated that the so-called commodity super-cycle popped back in 2008 when the global economy collapsed. If it didn’t then, you can definitely make the case that it has over the last year or so.
As many emerging market economies have seen growth dwindle, so has overall commodity demand. Funds tracking various natural resources futures contracts- like the popular PowerShares DB Commodity Index Tracking –still haven’t recovered from their former glory-day highs………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Despite the current lack of enthusiasm for commodity investing, veteran oil trader Daniel Masters sees light at the end of the tunnel. Masters, co-founder and portfolio manager at Global Advisors, a Jersey-based hedge fund focusing on commodities, acknowledges that commodity funds have fallen on hard times recently, but argues that the market will soon hit bottom and savvy investors will return.
“In the very, very short term, we maintain an active participation in the commodity business, but we understand and we reflect the current apathy about commodities,” says Masters, a former head of JP Morgan’s global energy trading business………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

China’s imports of crude oil, iron ore and copper hit record highs in January, though some of the unexpected strength was put down to stockpiling ahead of the Lunar New Year holidays rather than underlying strength in consumption.
At the same time, data showed the value of China’s overall imports and exports climbed around 10 percent last month from a year ago and handily beat expectations, raising optimism over the health of the world’s second-largest economy after recent weak data………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Cyclical commodities, especially industrial metals were favoured by investors. Platinum, copper and silver were the top three individual picks with platinum coming out well on top with 31% choosing it as their favourite, followed by copper at 26%. Silver followed suit with an average of 15% choosing it as a top performer in 2014. Gold also saw strong interest (with 13%) concluding the metal is still seen as a hedge against potential growth and financial risks in 2014.
The results confirm earlier predictions that if global economic growth remains on track, commodity performance will follow. Platinum and silver exchange-traded products (ETPs) received the largest inflows in 2013 with $1.3 billion and $841 million respectively as investors shifted away from gold towards commodities more positively correlated with the global industrial cycle………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

As the U.S. Federal Reserve considers new ways of reining in banks’ trading in what it sees as risky physical commodity markets, Wall Street’s two oldest and biggest players may ultimately gain in stature.
Thanks to a longstanding legal exemption that Fed officials say limits their regulatory capacity, Morgan Stanley and Goldman Sachs may yet emerge from the regulatory upheaval that is upending banks’ commodities trading better-off than their peers, who face potentially tougher new rules………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

World oil demand will rise slightly more than expected in 2014, OPEC said on Wednesday, becoming the second major forecaster this week to predict higher fuel use as economic growth picks up in Europe and the United States.
The Organization of the Petroleum Exporting Countries, in a monthly report, said global demand will rise by 1.09 million barrels per day (bpd) this year, up about 40,000 bpd from its previous forecast. The group, which pumps a third of the world’s oil, also sees potential for further rises………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

OPEC crude production gained for a second month in January as the group boosted its forecast for global oil-demand growth this year. The Organization of Petroleum Exporting Countries, responsible for 40 percent of the world’s oil, said that supply from its 12 members increased by 28,000 barrels a day to 29.71 million barrels a day in January as Libya pumped more, according to its monthly report.
That compares with 29.68 million barrels a day in December, OPEC said, citing data from secondary sources. The group raised its estimate for global demand growth amid an improving outlook for the world economy………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

North Sea oil production forecast to fall this year, blowing hole in Alex Salmond’s economic plan for an independent Scotland. Britain’s oil production from the North Sea is expected to fall this year to new lows not seen since the early 1970s in a fresh blow to Alex Salmond’s economic plans for Scottish independence.
In its latest closely watched market report published Wednesday, the Organisation of Petroleum Exporting Countries (Opec) said that projected output from the North Sea in 2014 could fall to an average of 800,000 barrels a day (b/d) of crude, a fall of 70,000 b/d from 2013 when output hit its lowest average since 1977………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

The price of oil rose above $100 a barrel Wednesday as OPEC predicted faster growth in oil demand this year and China reported record imports of crude oil. The gains were tempered by an increase in U.S. supplies.
Benchmark U.S. crude for March delivery rose 43 cents to $100.37 a barrel on the New York Mercantile Exchange. Oil rose as high as $101.38 in morning trading………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Is last year’s slump in the gold price over and done? Here’s one interesting sign: The world’s biggest gold exchange-traded fund today has slightly more investors this morning than it did at the New Year.
Add it to the fact that gold just posted its first string of five consecutive gains since August 2012 and you’ve got some unmistakable short-term momentum. Not that every analyst is convinced it’s a new uptrend………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Gold and Silver imports in India is reported to have suffered a 77% fall in January, plunging to 1.72 billion. Reflections of stringent import regulations along with the RBI imposed 80:20 norms are noted as the main factors for the remarkable fall.
With the intention of curbing the current account deficit (CAD) of the country, the Government of India had implemented several regulations to control the inbound shipment of gold and silver over a year. The import customs duty on gold which stood at 2% was hiked thrice in 2013 to reach 10% now………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

China’s gold consumption topped 1000 tons on surging demand in 2013, according to China Gold Association. Of the 1176.40 tons which represents an increase of 41.36%–716.50 tons accounted for gold jewelry (an increase of 42.52%), 375.73 tons of gold bullion, an increase of 56.57%, 25.03 tons of gold coins (a decrease of 1.07%), industrial gold 48.74 tons (decline of 0.23%), gold for other uses accounted for 10.40 tons (decline of 32.03%).
China’s gold consumption figures do not include demand from the central bank, whose gold reserves stand at 33.89 million ounces (1,054 tonnes), unchanged since April 2009, according to the latest figures on the central bank’s website………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

As the US economic continues to gain traction, yields will begin to rise which should benefit the US dollar. Since gold prices are quoted in dollars, it is treated by the investor community as a currency pair that weakens as the dollar rallies.
As US yields climb the attractiveness of the dollar, which will erode the value of gold prices, pushing them lower relative to the greenback. The SPDR Gold trust ETF (GLD) holds gold futures and therefore is a robust proxy for the price of the yellow metal. Prices broke through long term support and are trading within a 6-month trend channel………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Copper led gains in industrial metals after China’s trade surplus widened more than estimated in January and as imports of the commodity used in wiring rose.
The metal for delivery in three months on the London Metal Exchange climbed as much as 0.7 percent to $7,125 a metric ton, the biggest intraday advance since Feb. 6. Copper traded at $7,118.25 at 10:55 a.m. Hong Kong time………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Global demand for rhodium, used mostly in catalysts to clean auto emissions, is poised to exceed output by the most in three decades as carmakers and chemical companies snap up supplies near the lowest prices in nine years.
Buying of the metal will top output this year by 78,000 ounces, the most since at least 1984, according to Deutsche Bank AG and Johnson Matthey Plc. Prices will halt a four-year drop, rising 4.8 percent to average $1,100 an ounce in the fourth quarter, a survey of 11 analysts shows. Goldman Sachs Group Inc. sees gains through 2017………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Commodities’ poor form last year has not scared off investors with many still intending to buy industrial metals in 2014, according to an ETF Securities survey. Many of the 450 investment professionals surveyed at the four ETF Securities Annual Commodity Investment conferences in Europe last week still saw commodities as a “favoured asset class”, ETF Securities says.
A fifth of conference delegates said commodities were one of their top three picks for the year. ETF Securities head of research Nicholas Brooks says most investors surveyed expected robust global growth, led by the recovering US………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Thanks to broad concerns about emerging markets and worries over the taper, natural resource investing has come back into the spotlight. Many commodities are up for the year, which is something that can’t be said for the broad stock market so far in 2014.
And while many commodities have risen, their equity counterparts—such as in the precious metal mining space—have really taken off in the past few sessions. This isn’t too much of a surprise as equity commodity picks generally act as a leveraged play on their underlying commodities, at least in the precious metal world………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Four new exchange-traded funds were launched Wednesday, giving investors a chance to gain exposure to gold prices in currencies other than the U.S. dollar.
The products were patterned after some of the trading methods of well-known investor and newsletter writer Dennis Gartman, who for a long time has taken positions in the gold market in currencies other than the greenback. The four new products include his name………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

President Obama’s fresh environmental plan has proved to be beneficial for renewable energy stocks. Alternative energy is the most happening thing in the energy sector now in the wake of widespread concerns over carbon emission, climate change and other pressing environmental issues.
A major growth area in the renewable space is solar energy. Following a listless 2011, the solar industry rallied in 2013. The U.S. Energy Information Administration (EIA) estimates that U.S solar demand increased more than 32% in 2013. For 2014, the EIA projects that U.S. solar energy consumption will boom by roughly 35%………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Two years after Russia, Kazakhstan and Belarus formed a trade pact, a currency war is breaking out between the former Soviet republics. Kazakhstan devalued the tenge by 19 percent yesterday, saying the Russian ruble’s plunge to a record low this month put additional pressure on its currency.
The tenge will trade at 185 per dollar, with a range of 3 tenge on either side after a previous target of about 150, the National Bank of Kazakhstan said yesterday. The ruble fell to a record 41.0472 against the Russian central bank’s dollar-euro basket this month, dropping 6.3 percent this year and 15 percent from the start of 2013………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

A massive cyber attack from unknown sources that has been spamming bitcoin exchanges is highlighting some of the dangers people can encounter when they exchange cash for digital currencies like the bitcoin, experts said on Wednesday.
The attack, which is technically known as a distributed denial of service attack, involved thousands of phantom transactions, forcing at least three of the online platforms that store bitcoins and trade them for traditional currencies to halt withdrawals of bitcoins until they can determine which transactions were real………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

South Korea’s refusal to revise estimates of future greenhouse gas emissions could earn it the world’s highest carbon price, and have a potentially damaging impact on its export-oriented industry, according to a report released by Thomson Reuters Point Carbon.
The country’s environment ministry last month decided to stick to previous projections on how much carbon dioxide (CO2) South Korea would emit in 2020 under a business-as-usual (BAU) scenario, despite critics saying that the estimates were too low………………………………………..Full Article: Source

Posted on 13 February 2014 by VRS |  Email |Print

Last Thursday, the New York Times detailed the European Union’s most recent efforts to strengthen its carbon-emissions trading system: EU officials voted last week to reduce the number of carbon allowances in the system, a welcomed step for the world’s most ambitious carbon market to drive even more significant reductions than it has already achieved.
Fewer allowances will increase the price of permits, which in turn will drive companies to take emissions into account in their energy investment decisions. Thursday’s vote brought a rise in prices of approximately 7% reaching about €6.60 ($9). However, the New York Times reported, that price is still far below where analysts say it needs to be to have an impact on the EU’s energy choices………………………………………..Full Article: Source

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