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Commodities Briefing 26.Feb 2014

Posted on 26 February 2014 by VRS |  Email |Print

Globally, commodity assets under management plummeted from $418 billion at the end of 2012 to just $319 billion by the end of 2013, according to a February 14 report by analysts at Barclays. During the past few years, numerous commodity hedge funds have been forced to close amid disappointing returns, while December 2013 saw the largest monthly outflow from commodity index products since late 2011.
Nonetheless, commodities enjoyed a “surprisingly strong” start to 2014, helped by the impact of sub-zero temperatures on US natural gas and reduced supplies of precious metals due to a miners’ strike in South Africa………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

You’ve got stocks, bonds, ETFs and cash in your portfolio - but what about commodities? Do they belong alongside your other investments, and if so, how much money should you allocate to them?
This can be a very confusing question, especially for inexperienced or young investors. Some might also believe that you have to trade risky futures contracts just to invest in commodities. However, there are actually a wide range of available investment options available, making it much easier………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

The distribution of growth of combined iron ore, steam coal and coking coal imports in recent years has been heavily uneven. Between 2008 and 2013, global trade of these commodities grew on average by 7% p.a. Around 98% of this growth was accounted for by China (81%) and India (17%), while imports by most developed economies fell in this period.
Reaching Great Heights: China has clearly driven the vast majority of this growth. The Graph of the Month shows that China’s combined iron ore and coal imports rose from 453mt in 2008 to 1,004mt in 2013, and China’s share of global imports increased from 28% to 44% during this period………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Hedge funds continue to rush into commodities according to the Commitment of Traders report covering the week of February 18. The bullish bets on 24 US traded commodities jumped by 15 percent to 1,659,000 contracts of futures and options.
This the seventh weekly increase in a row has driven the exposure to the highest since April 2011 and an unprecedented 23 out of 24 commodities tracked in this were bought………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Daniel Masters, the former head of energy trading at JP Morgan and co-founder of hedge fund Global Advisors, has seen his share of ups and downs.
In 1999, Daniel Masters left his job as global head of energy trading at JP Morgan. Oil markets were in a slump, and commodities had lost favour at the bank, which was trying to ride the internet boom and refashion itself as a technology powerhouse. Masters took an unusual step: he launched a commodity-focused hedge fund, Jersey-based Global Advisors………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Ohio Sen. Sherrod Brown on Tuesday said he pushed a pair of nominees for key regulatory posts to take steps to deter big banks from owning and storing oil, aluminum and other key commodities. Brown, chairman of a Senate panel that monitors financial institutions, has been urging regulators to crack down on behavior that could lead to higher prices for consumers.
Some large banks buy and hold commodities in a strategy that can lead to higher prices for things such as beer, canned food or fuel. Brown met with Chris Giancarlo and Sharon Bowen as they made the rounds among senators after their nomination to the Commodities Future Trading Commission. ……………………………………….Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Oil prices slipped Tuesday as analysts predicted a sixth-straight weekly increase in U.S. crude stockpiles and as traders anticipated lower demand for heating-related fuel as the end of winter approaches.
Light, sweet crude for April delivery fell 99 cents, or 1%, to $101.83 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, also fell 1%, declining $1.13 to $109.51 on the ICE Futures Europe exchange………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

New data from the Energy Information Administration illustrates the improving trade picture for the United States due to a rapid increase in oil production. Rising production, flat demand, and increasing exports of refined petroleum products reduced the U.S. trade deficit to its lowest level in November 2013 since the aftermath of the financial crisis in 2009.
However, the quantity of oil imported dropped a lot more than its price tag. In other words, U.S. oil imports peaked in 2005 at around 10 million barrels per day………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

The past 16 months haven’t been good times for gold bugs with the yellow metal travelling in a tight downward trend channel since October 2012. This protracted price fall seems to relate to confidence building in the international financial system as the trauma of the global financial crisis (GFC) began to slip from investors’ minds.
That fall followed a three-year run-up in the gold price from $US733 an ounce to about $US1880, experienced during the panic of the GFC when investors ran to gold as a safe port in the storm………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Is it premature to declare that gold’s bear market is finally over? It certainly looks that way to some chartists, who are making a big deal of gold’s double-bottom at the end of last year just below $1,200. Since then, bullion has risen by $140 an ounce, or more than 10%.
Even if gold’s bear market has ended, it was no slouch: From a September 2011 high of $1,925 an ounce the decline lasted for 27 months and took 38% off of bullion’s price. Gold-mining stocks had a particularly rough time: The NYSE Arca Gold Miners Index fell 70% from September 2011 to its December 2013 low………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Gold price ticked lower on Tuesday but held near its strongest level in four months, underpinned by concerns about economic growth in China and nervousness over Ukraine after acting President Oleksander Turchinov warned that his country was close to default.
An increase in holdings on bullion-backed exchange-traded funds also could also reflect renewed interest from investors, although bullion will have to crack key technical resistance levels before it can move higher……………………………………….Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

US gold futures rallied to a high of$1339 an ounce before falling bak to $1334 an ounce on profit booking and investor expectations that Federal Reserve will go ahead with its plans to reduce stimulus measures.
At India’s Multi Commodity Exchange, gold futures for April delivery has been trading range bound in 30,000 levels ocassionally falling to 29800 levels last week. China has overtaken India as the largest gold consumer in 2013, however, gold demand may weaken as higher prices have impacted market senitments this week analysts said………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

The prices of Platinum witnessed steady fall during the past six months, falling all the way from levels as high as $1,550 per oz down to $1,420 per oz. The falling gold prices injected weakness in other precious metal class including Platinum. According to HSBC, the future does not look as gloomy, primarily due to the tightening supply from mines.
As per the HSBC report, automotive market will turn out to be the main driver for platinum demand. The recovery in European automotive production will boost the demand for Platinum. HSBC pegs the year-on-year demand growth for Platinum in 2014 at 7.4% in Europe, China and India………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Auto sales will be the key to demand for platinum group metals in 2014, more-so than legislation on auto emissions, says Societe Generale. Europe is especially important for platinum demand due to the continent’s use of diesel-powered vehicles that require platinum.
Weakness in the European economy dented this demand in recent years. “That said, with the European economy having exited recession and the economic prospects improving, albeit modestly, coupled with an aging car fleet then there is the potential for a continued steady upturn in European car sales,” Societe Generale says………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

The long anticpated supply tightening in zinc is emerging as recent zinc mine corporate data suggests, according to Barclays Plc. Barclays which tracks close to 20% of global supplies reported that major zinc producers have reported 4% lower production on a year on year basis with ouput contracting at half the mines.
“During 2013, zinc performed fairly better than its peers from the base metals complex, fetching a marginal negative return of 0.57%. In the year 2011, zinc prices plummeted by 24%, the most among other base metals on the back of supply surplus and high legacy inventory,” according to Nirmal Bang Commodity Year Book 2014………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Nickel will climb significantly in 2015 and may advance to more than $20,000 a metric ton in the next few years because of Indonesia’s ban on ore exports, said Vale SA (VALE5), the world’s second-biggest producer.
The restrictions that Indonesia put in place last month probably won’t be eased, Peter Poppinga, executive director for base metals at the Rio de Janeiro-based company, said in a Feb. 21 interview. Big price movements are unlikely this year because of the high level of stockpiles in China, he said………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

The financial news media, seeing gold rally to its highest level in months, explains the surge as safe-haven demand in a slowing global economic recovery. As my British friends say, “Bolllocks.” I’m always amazed how uninformed financial reporters can be about the markets they cover. Many even seem to miss the news in their own publications!
The reason gold moved above the key $1,300 resistance level is the quickly fading U.S. dollar rally. Emerging-market fears drove the greenback higher for a few weeks, and now that fear is subsiding………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

The commodity ETF space had seen some all-stars to start the year thanks mainly to soft stock markets and the excessive under valuation in the natural resource world. Some metals like gold and silver surged on their safe haven investment status, while some soft commodity ETFs (like cocoa) have added double digits on a supply crunch.
However, significant weakness has been seen in the industrial metals space (such as with copper) in the year-to-date frame. All three exchange traded pure plays on copper haven’t seen gains so far this year. Notably, copper exchange traded products lost around 16% last year………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Oil investments can be found in most diversified portfolios. Oil exchange-traded funds offer affordable alternatives to the actual ownership of oil fields. There are many avenues for adding oil to your investment portfolio. One route is binary options trading on oil exchange traded funds, commonly termed an Oil ETF.
For the everyday trader looking to diversify a portfolio with the inclusion of oil, an ETF presents a real time interest in the oil commodity without the costly purchase of the product. Oil is a prime trading commodity. Supply and demand substantially determine the price of oil at any given moment………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Two Deutsche Boerse -backed companies have signed agreements with Indonesia’s top commodity exchange seeking to develop trading platforms, market surveillance and clearing, the companies said on Tuesday.
The agreements are the latest step by Germany’s biggest exchange operator to grow its footprint in Asia. Exchange operators from outside the region have tended either to acquire a local player or set up their own Asia bourse to compete with Chinese and Indonesian exchanges. ……………………………………….Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Britain’s Barclays Plc said on Tuesday it has closed its power trading desks in London and New York, joining a string of global investment banks that are paring down their commodity market activities as increased regulations bite.
Barclays, a top-five banking player in commodities trading which is in the process of shrinking its investment banking activities, said its “core commodities franchise continues to operate business as usual”………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

The image that comes to mind is of schoolboys squabbling in the playground. Alex Salmond, the Scottish first minister, proclaims that the pound sterling is the common property of both Scotland and England. George Osborne asserts that the pound belongs to him and the UK chancellor will not let it go.
Both claims have some merit and both are irrelevant. If Scotland did vote Yes to independence, that would be the time at which sensible negotiations would start, preferably between grown-ups………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

At the start of the millennium, the idea of a digital currency independent of governments or central banks and unbacked by physical reserves was viewed in much the same light as the flying car or the flux capacitor. However, a paradigm shift in digital technology since the internet boom has seen cryptocurrencies move from futuristic fantasies to real-world items in the space of two decades.
But as Bitcoin – the frontrunner in the race to monopolise the digital currency sphere – gains ever more traction, it has acquired a reputation as the currency of choice for some of society’s murkier elements. This reputation has not been enhanced by Bitcoin’s widespread use on underground online marketplace Silk Road before its closure by the US FBI last October………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Long drawn out plans to revive Europe’s ailing carbon market could finally become law tomorrow, after EU ministers backed plans to withold millions of emissions allowances. All three of the EU’s law making bodies have now backed a temporary fix to the Emissions Trading System, meaning the Commision can now register the plans as law.
After months of fraught negotiations and failed votes, MEPs finally approved the so-called backloading plan in December last year, allowing the temporary delay in the auctioning of 900 million allowances for the EU emissions trading scheme (ETS) over the next two years………………………………………..Full Article: Source

Posted on 26 February 2014 by VRS |  Email |Print

Labor has denied claims by the Abbott government it is ”crab-walking away” from the carbon price by accepting Environment Minister Greg Hunt’s plan to cancel three auctions of carbon credits. The Labor caucus voted unanimously on Tuesday not to join the Greens to block the auction cancellations in the Senate, a move Mr Hunt said showed ”the ALP has started to crumble in their support for the carbon tax”.
”This is simply not true,” said Mark Butler, Labor’s climate change spokesman. ”Labor remains entirely committed to repealing the carbon tax if an [an emissions trading scheme] is put in its place.”……………………………………….Full Article: Source

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