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Commodities Briefing 11.Mar 2014

Posted on 11 March 2014 by VRS |  Email |Print

Commodities derivatives trading jumped 23 percent last year, led by the U.S. and China, even as the biggest banks pulled back amid slumping revenues.
The increase in commodities trading, which accounted for 18 percent of volumes across all products, outpaced gains in interest rate and currency derivatives, the World Federation of Exchanges said in an e-mailed report today. Equity volumes fell 5.3 percent, it said………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

On any investment metric, commodities suffered badly in 2013. The highlight for many being the slump in the gold price from a high of $1,693 (£1,012) an ounce in January 2013 to $1,266 by the end of the year.
On a broader view, the MSCI World Metals and Mining index also struggled woefully in 2013 with a loss of 16.41 per cent compared with the positive return of 24.32 per cent from the MSCI World index. But with the gold price refusing to stay below $1,200 an ounce, and even creeping up to a high of $1,320 on February 14 2014, could this be the start of a turnaround in the sector?……………………………………….Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Coffee is up 80 percent this year. Lean hogs are up 28 percent. Corn is up 13 percent. Gold is up 12 percent. Most of these same commodities were down last year, and any of them could fall at the drop of a hat. So how do rational investors participate in the upside for unpredictable commodities without losing their all-cotton shirts?
One approach is to invest in a diversified basket of commodities. That lowers the chance of a big loss and adds diversification to an investment portfolio, since commodities tend not to track the stock market. While there are 149 commodity ETFs, only a handful are broadly diversified. ……………………………………….Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Maverick investor Jim Rogers founded the Quantum Fund hedge fund in 1973 along with George Soros. Rogers made his fortune early and retired at 37. He later traveled on a motorbike around the world in 1990, and then visited six continents over three years in 2003, chronicling his adventures in books.
Around 2005 he relocated with his family to Singapore, partly so his daughters could learn Mandarin Chinese during childhood. In talks, Rogers emphasized China’s rise to economic dominance in the early 2000s and penned “Hot Commodities” (2004), which painted China as a massive consumer of natural resources in coming years………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Going into 2014, it looked like it would be a relatively benign year for commodity prices, aside from beef. However, prolonged droughts in California and Brazil, porcine epidemic diarrhea virus outbreaks, and instability in Ukraine have all conspired to make 2014 a food buyer’s nightmare.
California’s drought is driving up cattle, dairy and produce prices. Brazil’s drought has lit a fire under coffee, sugar and soybeans. Both corn and wheat have been affected by Russia’s meddling in Ukraine………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Chinese exports plunged tanked by a shocking 18.1% leading to a 23 billion dollar trade deficit. The markets are trying to adjust to a shaky new Lunar New Year. Oh, sure, some blame the holiday but after getting one China company default it is possible that China is headed towards a very hard landing.
The reason why this is so shocking is just one month ago China trade expanded by 10.6%. We saw copper imports were soaring. Still China Copper Imports were up January through February was up 41.2% but in February fell 29%………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

“Oil is our weapon”, declares a billboard campaign launched by Libya’s oil ministry. It is meant to foster national pride in a country that remains riddled with fault lines three years after the ouster of its idiosyncratic dictator, Muammar Gaddafi. But in Libya’s turbulent east, armed federalists are attempting to make that slogan a reality, on their own terms.
The group has blockaded Libya’s main oil ports since July, and has now raised an even bigger challenge. This week the rebels announced they had sold a crude-oil shipment directly to foreign buyers, entirely bypassing a central government that increasingly struggles to control much beyond the capital, Tripoli………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Libyan officials say they have taken “complete control” of a North Korean-flagged tanker that loaded crude oil at a port occupied by rebel forces. It was stopped as it tried to leave Sidra port but has not yet reached a government-controlled port, they add.
But the rebels, who planned to sell the oil independently of the Libyan state, denied losing control of the tanker. Libya’s parliament earlier ordered a special force to be deployed to “liberate” all rebel-held oil ports………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

With Russia’s invasion of Crimea, the threat is greater than Vladimir Putin’s ambitions, the real danger to the world is that oil and natural gas are once again being used as a weapon of war. This isn’t the first time. When Russia cut off natural gas supplies in 2009 to Ukraine and six other countries in the middle of winter, millions were left in the cold until they paid Russia’s ransom in the form of higher prices.
It was a stark example how vulnerable Europe had become to Russia’s control over energy resources. I said at the time it should be a wake-up call to an America confronting its own foreign oil dependence issue and the national security and economic threats that come with it………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

The hand-wringing over what to do to help Ukraine has had a very positive impact on the U.S. oil and gas industry. Politicians like Sen. Lisa Murkowski (R-AK) are seizing on the crisis to call for a lifting of the ban on U.S. oil exports — the better to counterbalance Russia’s petro-influence.
While the Wall Street Journal this morning wrote that western politicians are working on a variety of options to help “loosen Russia’s energy stranglehold on Ukraine” including “larger exports of U.S.-made natural gas.”……………………………………….Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Morgan Stanley lowered its gold price forecasts for 2014 on Monday, citing the impact of the US Federal Reserve’s reduction of stimulus along with mounting regulatory pressure on investment banks to scale back commodity operations.
Despite a falling US dollar gold price, legal Indian gold imports remain low, in contrast with strong Chinese physical gold demand, the note from Morgan Stanley said. The steep sell-off by ETFs in 2013 countered the cushion provided by strong consumer demand for gold, resulting in a decline in gold prices, the bank added………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Every week, our investment team reviews a variety of sources to formulate a summary of the top events in the gold, resources, and emerging markets. The results are categorized in terms of strengths, weaknesses, opportunities and threats. We believe this SWOT model helps investors make informed decisions about their gold and gold stock investments.
The analysts at CIBC World Markets published an interesting note comparing the current 2014 rally with the rally in 2009, both of which were preceded by a 29-percent drop from the highs during those times. Equities have outperformed bullion by roughly 14 percent during this 2014 rally, still shy of the 32 percent outperformance during the 2009 rally………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

In previous years, the Federal Open Market Committee’s expanding monetary policy (e.g. lowering interest rates) has lifted demand for gold, which is often used as protection against the potential devaluation of the U.S. dollar. But back in 2013, the FOMC’s policy of purchasing long-term treasuries didn’t seem to lift the price of gold.
Moreover, in the past couple of months, the price of has gold rallied, even though the FOMC decided to reduce its asset purchase program. This raises the question: Does the FOMC’s policy still affect gold prices as it once did? Looking forward, will the upcoming FOMC meeting influence precious metals investors as it did before 2013?……………………………………….Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Ron Struthers, publisher and editor of Struthers’ Resource Stock Report, believes the fractional reserve gold system has seen more stress and was probably in good part responsible for cementing the bottom in gold around $1,200 and ounce.
We see that the gold inventories at COMEX and the bullion banks have been steadily declining for the past year. There are not too many places to turn to, if any, for physical supply. It is no secret that record amounts of physical gold have been moving into China, and India continues as a major buyer despite higher import taxes………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

All manner of sins can be covered up by a bull market: exorbitant salaries, poor returns, bad projects, to name but a few. But, as has been clearly shown over the last few years, we are definitely no longer in a bull market and, some of the sins of the past have come back to haunt mining companies.
Speaking to Mineweb in Cape Town recently, just following the 2014 edition of the Investing in African Mining Indaba, Jeremy Wrathall, head of Investec’s Global Natural Resources team, explains that while there has, indeed, been some optimism creeping into the market of late, there is no reason to be wildly optimistic that things are going to return to the halcyon days before 2007………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

As Investment Adviser reported on February 10, ETF Securities is in talks with fund providers to build and launch white-labelled exchange-traded funds (ETFs) – including products tracking multi-asset indices, a new concept for the UK market.
It is easy to see how we have arrived at this point. The prevalence of ETFs has exploded in the past 10 years. According to Lipper, the amount of assets invested in Europe-based ETFs has risen from €16.3bn (£13.5bn) in 2003 to €289.5bn (£240.6bn) at the end of 2013………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Last week we posted a number of charts to note the 5-year anniversary of the current bull market for stocks. Below we take a further look at asset-class performance during the current bull market using our key ETF matrix, which regular readers have seen here a number of times. In the matrix, we highlight each ETF’s performance over the last week, year-to-date, and since the close on 3/9/09, which was the bear-market low for stocks during the Financial Crisis.
As you can see, US equity ETFs have posted the largest gains since March 9th, 2009. The Consumer Discretionary ETF (XLY) is up the most of any ETF in our matrix with a 5-year gain of 318%………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

The Singapore Exchange (SGX) will work with a commodity exchange in China to develop the commodities markets in both countries. The two exchanges signed a memorandum of understanding (MOU) for the partnership on March 7, SGX said in a statement on Monday.
The bourse said it and the Dalian Commodity Exchange would jointly explore areas such as the development of new commodity derivatives and investor education in each other’s markets………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Nations setting up carbon markets must standardize their emission-reduction benchmarks to ensure international efforts to limit global warming stay on track, according to Switzerland’s climate envoy.
At least 30 of 200 countries meeting at talks this week in Bonn are developing carbon trading systems to help meet emissions targets under a worldwide treaty to start in 2020. Nations should measure greenhouse-gas cuts as tons of carbon dioxide even if they pursue hard-to-quantify policies such as emissions taxes and energy efficiency rules, said Franz Perrez, who represents the alpine nation in United Nations talks………………………………………..Full Article: Source

Posted on 11 March 2014 by VRS |  Email |Print

Democrats in the US Senate will mount an overnight “talkathon” to draw attention to climate change, using tactics often deployed by Republicans to block laws regulating fossil fuels and curbing carbon emissions.
The marathon debate will hear from at least 28 Democrat senators in the latest front of an escalating battle ahead of and midterm elections in November and plans by President Obama to regulate coal-fired power stations………………………………………..Full Article: Source

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