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Commodities Briefing 10.Mar 2014

Posted on 10 March 2014 by VRS |  Email |Print

Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron’s: U.S. Global Investors.
Nomura analysts attribute their increased gold forecast to real interest rates that “don’t seem to be heading anywhere at the moment.” In addition, there appears to be “long-term demand support from Asian nominal income growth, an evolving post-QE macroeconomic environment and lower disinvestment potential.”……………………………………….Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

Oil, gold and wheat prices are in the limelight after Russia’s invasion of Ukraine’s Crimea region, but the conflict may have significant consequences for other commodities too — including natural gas, palladium and potash.
“Concerns over economic sanctions against Russia will put short-term pressure on [commodities] supplies,” said Jeffrey Sica, president and chief investment offer of Sica Wealth Management. “There is certain to be a significant element of the stockpiling of commodities in anticipation of escalation in the conflict.”……………………………………….Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

Steel, grain and other commodity export deals are yet to be significantly affected by the growing crises in Ukraine which escalated on 6 March with a US restriction on visas for Russians and Ukrainians threatening Ukrainian sovereignty and the imposition of sanctions by the EU on 18 Ukrainians including ousted president Viktor Yanukovich, the former Prosecutor General, the Head of Security Service, Minister of Justice and some of their relatives or associates.
The presence of Russian troops in Crimea and in particular of Russian ships in the port of Sevastopol are a concern, particularly as Russia is now claiming sovereignty over Crimea and by extension, of all its ports………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

The effects on the economies of Gulf Cooperation Council (GCC) countries would be negative to neutral under an adverse scenario in which oil prices decline to $90 per barrel by 2020, according to Moody’s Investors Service.
In a new report, the rating agency said Oman and Bahrain would be most at risk of such a scenario while the UAE and Saudi Arabia would also face reduced “financial flexibility”………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

Libya threatened on Saturday to bomb a North Korean-flagged tanker if it tried to ship oil from a rebel-controlled port, in a major escalation of a standoff over the country’s petroleum wealth.
The rebels, who have seized three major Libyan ports since August to press their demands for more autonomy, warned Tripoli against staging an attack to halt the oil sale after the tanker docked at Es Sider terminal, one of the country’s biggest. The vessel started loading crude late at night, oil officials said………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

An Omani economic expert stressed that Iran’s re-entry into the oil market and the lifting of sanctions imposed on it would have a significant impact on the world oil market.
Dr. Juma bin Saleh Al-Ghailani told Kuwait News Agency (KUNA) that Iran is a founding member in the Organization of Petroleum Exporting Countries (OPEC) and has a large oil reserve estimated at nearly 160 billion barrels, in addition to it Iran being one of the pillars of the (OPEC ) in the oil market………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

In less than a decade, Marco Dunand and Daniel Jaeggi have turned a 10-person company supplying oil to a pair of Polish refineries into the world’s fourth-largest commodity trader with revenue topping $100 billion last year.
Now Dunand, 52, and Jaeggi, 53, are executing a plan to propel Geneva-based Mercuria Energy Group Ltd. nearer to the top independent traders, Glencore Xstrata Plc, Trafigura Beheer BV and Vitol Group. After entering exclusive talks last month to buy JPMorgan Chase & Co.’s $3.3 billion commodities unit, Dunand and Jaeggi will probably announce a deal within the next week, according to two people with knowledge of the situation………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

Now just because — as did Lawrence before me and Moses before him — I have ventured into the desert, desert you I shan’t dear readers, for ’tis Saturday morning and thus time to compose The Gold Update, as abbreviated an edition as is this one.
Warm (understatement) greetings from Scottsdale, Arizona, where harmoniously man lives with the gila monster. As does one in France learn to walk about with one’s head bowed to avoid the sidewalk presents left by les chiens, so does one here keep the eyes peeled — as well as ears pricked — for the sudden presence of the rattler………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

Gold is getting more attractive to hedge-fund managers even as Goldman Sachs Group Inc. says the metal’s surprising rally this year will soon fizzle.
Hedge funds and other speculators expanded bets on higher prices for a fourth week in New York futures and are now the most bullish since December 2012, government data show. While gold is off to its best start in six years after topping $1,350 an ounce, Goldman’s Jeffrey Currie says chances are increasing that prices will slump to $1,000 for the first time since 2009………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

‘Why do you invest in gold, when it doesn’t pay interest?’ This is one of the most frequently asked questions when it comes to gold investment discussions. Goldmay not pay interest but neither, it seems, do the banks.
Today the Bank of England’s MPC met for their monthly bank-rate setting meeting. This was the 60thmeeting since they first set rates at the record low of 0.5%, five years ago. Savers’ campaign group Save Our Savers estimates that since the first rate cut to 0.5% on the March 5, 2009, savers have lost ‘a staggering £326 billion………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

From last Friday’s close at $1322, gold opened strongly on Monday trading, as high as $1355 before losing two thirds of the rise on Tuesday. On Thursday afternoon (GMT) gold rallied back to challenge the $1350 level. This morning (Friday) it is in the balance as to whether or not gold will need more consolidation before moving on towards $1400, with everyone watching out for US employment numbers.
The change in sentiment over the last eight weeks has encouraged small traders to go long on gold. Normally, market-makers would be able to mark prices down aggressively to shake out these short-term speculators, but it has not recently happened. This suggests that the underlying market is robust………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

The rally in zinc and nickel was driven by a combination of short covering and fresh positioning, according to Barclays. Short covering in particular was triggered following the breach of technical levels, especially at $15,000 per ton for nickel. LME open interest data have been rising,which also illustrates a rise in fresh positioning, with new longs being added by discretionary investors.
Barclays expects zinc prices to be vulnerable to increase in LME stocks if the large short position in the March contract is physically delivered against. For nickel, it expects modest uptick in prices, the risk/reward of fresh longs at current levels is unattractive………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

Finding the best ETF is daunting especially when one is spoiled for choice. Take any sector and you’ll find as many as 50 large-cap value ETFs - and hundreds of them across all parameters. Also, many large-cap value ETFs have significantly varied portfolios, raising radically-differing investment implications. So, what are ETFs exactly? And, how do you choose from so many?
ETFs are a basket of stocks that reflect the composition of an index such as the S&P CNX Nifty or the BSE Sensex. They are essentially mutual-fund schemes or “index” funds, listed and traded, as are stocks, on the exchanges. They are priced continually and can be bought and sold throughout the trading day unlike mutual funds, the prices of which are based on the NAV (net asset value) at the end of a trading day………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

Exchange-traded funds may trade like stocks, but their prospects need to be judged by a separate set of criteria. New tools from two research firms that have begun to track both, CapitalCube and Chaikin Analytics, remind us of just how different stock and fund analyses can be.
To start with the obvious, ETFs can contain hundreds of securities, and it just isn’t practical to submit each component to traditional valuation analysis. Anyway, most ETFs are designed to duplicate, not beat, the return of a benchmark index. As a result, you aren’t looking for the one critical advantage that can cause a stock to outperform………………………………………..Full Article: Source/a>

Posted on 10 March 2014 by VRS |  Email |Print

Hong Kong Exchanges and Clearing’s plan to introduce the Hong Kong version of the London Metal Exchange platform this year is a baby step to kick off the local commodities market, but brokers and observers warned there will be challenges in developing the new market.
“HKEx spent a lot of money buying the LME in 2012 but we have yet to see how the deal will help promote the local commodities market. It is good to see HKEx is finally doing something to promote commodities trading in Hong Kong,” said Christopher Cheung Wah-fung, a legislator for the financial services sector…………………………………………Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

The euro and Swiss franc rose to new highs since Q4 2011, while sterling moved to within half a cent of the best level since 2009 set in mid-February in recent days. The market was all rife with speculation of a breakout. However, our reading of the technical and fundamental condition suggests dollar bears tread carefully.
If the past week was about the lack of escalation in both Russia/Ukraine and China, coupled with the ECB holding pat, next week may see the pendulum swing back a bit. This could lend itself to more consolidative trading, which in the current context, may be somewhat supportive of the greenback………………………………………..Full Article: Source

Posted on 10 March 2014 by VRS |  Email |Print

Cryptocurrencies – in whatever form they take – could alter the way we do business by making online transactions easier. If I had a bitcoin for every person I’ve met in the past six months who told me that bitcoin is a scam then I’d be a rich man. Or a poor one, depending in which day of the week we’re talking about.
Watching the exchange rate for bitcoins over the past month is like seeing the outline of a rollercoaster on the horizon. On 7 January, for example, a bitcoin was trading at $934; by 27 February it was down to $528; and on 5 March it was $678. So I guess that if you were “investing” (ie speculating) in the things, you’d feel as sick as any Alton Towers customer on a bad day………………………………………..Full Article: Source

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