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Commodities Briefing 18.Mar 2014

Posted on 18 March 2014 by VRS |  Email |Print

Commodity investments grew for the first time since August as prices of coffee to cocoa to hogs surged, and the trend may continue, Barclays Plc said. Raw-materials assets under management expanded $13 billion last month to $327 billion, with exchange traded products gaining $6 billion, the bank said.
Investors added $2 billion to commodities from precious metals to agriculture and energy, while rising prices also boosted the assets. The Standard & Poor’s GSCI gauge of 24 raw materials rose 4.4 percent last month, the most since July………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

The resources team at Barclays think “the tide may at last be starting to turn for commodity investment flows”. Total commodity assets under management (AUM) rose by $13bn in February, they note, the first AUM growth since last August.
“This was mainly driven by price appreciation, but the $2bn net inflow of new investments, though modest, was notable because it included the first positive monthly net flow into physical gold assets for more than a year.”……………………………………….Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Analysts at Barclays think the tide may at last be starting to turn for commodity investment flows. The three key positives so far this year are: very strong benchmark returns in the year-to-date; the return to negative correlations with other assets, and the consequent re-establishment of commodities as a viable alternative asset; plus the end to a long period of gold liquidation.
In February, total commodity assets under management grew $13bn, the first expansion since August 2013. This was mainly driven by price appreciation, but the $2bn net inflow of new investments, though modest, was notable because it included the first positive monthly net flow into physical gold assets for more than a year, as well as small allocations to commodity beta, the first in many months………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Unprecedented natural gas reserves in Europe, record global grain output and the threat of mutual economic calamity from oil sanctions are cushioning commodity prices even as the Ukraine-Russia conflict spurs a gold rally.
While UK gas prices, a European benchmark, rose 5.1 per cent since the crisis began at the end of February, they are still the lowest for this time of year since 2010. Brent crude fell 1 percent. After wheat advanced 15 per cent and corn 4.6 per cent, both remain about a quarter below the peaks in 2010, the last time Russia and Ukraine curbed shipments. Gold reached a six-month high on March 14 as demand for a haven grew………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Last year the so-called commodities “supercycle” was widely declared dead, but with price drops – and investors more optimistic about the global economy on the whole – it may be worth rethinking shunning this sector.
From the late 1990s to the 2008 crisis, the price of oil rose 1,062%, while copper shot up 487%, according to investment house Pimco. Behind this meteoric rise were emerging markets where wealth was growing quickly, causing increased demand for food, energy and the inputs of industrialisation and urbanisation………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Crude Oil prices are expected to bounce back strongly in second half of 2014 as the US recovery gathers momentum, refineries come out of maintenance and global oil balances tighten once again, according to Barclays Research.
In the short run, oil prices may remain weak but for the Ukraine crisis which could keep the market supported on supply fears. However, there are three strong reasons why globally oil prices may remain elevated, according to Barclays………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

According to the International Energy Agency (IEA), global oil supplies rose by 600 00 bpd in February, reaching 92.81 million bpd. This growth was led by a 500 000 bpd rise in OPEC crude output.
In February, OPEC Crude supplies surmounted the 30 million bpd mark for the first time in five months, led by a surge in Iraqi output, rising 500 000 bpd to reach 30.49 bpd. Total non-OPEC supplies rose 1.3 million bpd in 2013, and the IES anticipates that this figure will rise a further 1.7 million bpd in 2014………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Iran sold crude oil at $104.96 per barrel in February, a 7 cent rise compared to January, ISNA reported, citing the Organization of Petroleum Exporting Countries (OPEC).
Iran maintained its crude oil shipments at the highest since the end of 2012 last month amid talks between the country and world powers over its nuclear program, according to the International Energy………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Canadian Natural Resources Minister Joe Oliver said his country is on the verge of becoming an energy superpower. While the United States mulls its options for energy hegemony, a recent free-trade deal with South Korea and pipeline developments suggest Canada may beat it to the punch.
The International Energy Agency said that, despite recent volatility, Asian economies are contributing to the bulk of macroeconomic growth. That, in turn, means global oil demand is expected to grow by 1.4 million barrels per day this year………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Gold is at the highs once again, testing 1380-1400 area where we see some important Fibonacci levels that could react as resistance in this week. An updated count now shows a five wave move in wave (c) of C that is in final stages after recent break out of a running triangle in subwave four.
Keep in mind that on a daily time frame we are still looking at a triangle count where price is now testing important 78.6% retracement level of 1435-1180 move. A reversal down from here back to wave four range could suggest a completed rally for metals………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Gold’s strong rebound upleg this year has been driven by big gold-futures buying. After abandoning gold last year, American futures speculators are returning to the yellow metal in droves. These capital inflows are a very bullish harbinger, as major futures buying is the primary fuel for young gold uplegs before investors return to take the baton. And this big gold-futures buying is likely less than half done!
From a pure fundamental supply-and-demand standpoint, gold’s crushing losses last year were solely attributable to record gold-ETF selling by stock traders………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Royal Bank of Canada Capital Markets analysts Dan Rollins in Toronto and Jonathan Guy in London have come up with a detailed analysis of the gold market over the next few years comparing it with the big ETF driven gold price rally of 2005-2008.
Over this period, gold doubled in price from $450 to $900, and while the analysts are not putting exact price predictions into their prognostications, nor coming up with a precise timescale, the implication is there in their research that this could lead to a big gold price increase in the medium to long term………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Silver, it seems, is everywhere. The precious metal’s dual role as both an investment and industrial metal means that while it can be bought physically or in paper form by investors, it also has myriad technological and medical applications.
It’s in part because of those many uses that some silver market watchers think at some point — perhaps in the near future — demand for the metal will exceed supply, creating a shortage………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Mitsubishi sees potential for palladium to test the $800-an-ounce level. Nymex palladium futures got above $788 Friday before falling back on profit-taking, the firm says. Support came last week from a 19% year-on-year rise in Japanese passenger car sales, although Mitsubishi adds that this may have been affected by a consumer rush to buy before a rise in the sales tax next month.
Stronger auto sales bode well for palladium since it used for emissions-control systems. “Supported by geopolitical tensions in Ukraine as well as the ongoing South African PGM (platinum-group-metals) mining strike, palladium could make further gains in the coming days, perhaps testing the $800 level,” Mitsubishi says………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Swiss banking giant UBS AG disclosed in its annual report on Friday that it is reviewing its precious metals business as global regulators step up their examination of currency and commodity benchmarks.
“Precious metals is a niche market though it’s part of what UBS considers value-added for its wealth management clients,” said Vontobel Holding AG analyst Andreas Venditti to Bloomberg………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

All the warning signals point to a continuing slide in prices as the full extent of China’s economic problems emerge and bearish sentiment grips commodity trading houses. Investors in vital industrial metals such as copper and iron ore will have their nerves tested again this week after China’s unfolding debt crisis caused volatility on commodity markets.
All the warning signals are now pointing to a continuing slide in prices as the full extent of China’s economic problems emerges and bearish sentiment grips the large commodity trading houses………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Commodity exchange traded products have seen a fifth consecutive week of inflows, according to ETF Securities. ETF Securities sees the $57.3m of commodity inflows as a result of investors looking to diversify their portfolios as China produces weak economic data and the Ukraine crisis remains unresolved.
Both gold and silver prices have gained over recent weeks, with investors favouring silver as it has traditionally outperformed the yellow metal when both are rising. The ETFS Physical Silver ETP saw $38m of inflows over the week to 13 March, the second highest week of inflows in five months………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Investors seeking a hedge against a waning U.S. economic recovery and escalating conflict in Ukraine made twice as much money buying gold-mining shares rather than the metal the companies produce.
The Market Vectors Gold Miners ETF climbed 27 percent this year, more than double the 13 percent advance for the SPDR Gold Trust, the biggest exchange-traded product backed by bullion. This is the first quarter the company fund is outperforming the metal ETF since 2012………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Hedge funds turned their most bullish on agricultural commodities for three years, as they flocked to bet on higher grain prices amid the mounting tensions over Ukraine, and raised the stakes on the sugar rally too.
Managed money, a proxy for speculators, raised its net long position in futures and options in the top 13 US-traded agricultural commodities, by more than 133,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

After commodities had a rough go in 2013, taking the backseat to surging equities, it seems that this year has more favorable conditions in store for a number of hard assets. Though a number of commodities have gotten off to a white-hot start this year, none have even come close to the gains that coffee futures have notched, as that commodity has spiked more than 80% through the first 10 weeks of the year.
Coffee on the Rise: Futures for coffee are currently hovering at a fresh two-year high, as production in the world’s most vital region has spooked investors. Brazil is, by far, the largest producer of coffee on an annual basis………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

The Crimean parliament has announced the Russian ruble will become the second official currency of Crimea and will be circulating alongside the hryvnia until it is withdrawn in 2016.
The decision marks the first step in the peninsula’s economic integration with Russia, after Crimea’s citizens overwhelmingly voted for joining Russia in Sunday’s referendum. “The official currency unit of the Republic of Crimea is the Russian ruble, and until January 1, 2016, the Ukrainian hryvnia would be also the official currency,” the parliament’s official website says………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

Back in January, the Argentinean peso was plunging after its latest devaluation by the government. I was assigned to write a story about it. The end result — besides 550 words on why Argentina was spooking foreign exchange investors — was the inspiration for my spring break vacation: a week-long trip with my girlfriend to Buenos Aires and Uruguay. After all, it’s been a brutal winter here in New York.
I suppose I was channeling the 18th century nobleman Baron Rothschild, who during the Battle of Waterloo famously said “the time to buy is when there’s blood in the streets.”……………………………………….Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

A controversial government measure aimed at increasing the price of fossil fuels looks likely to be frozen in this week’s budget, in a move the Telegraph says will ” reignite the row over green taxes”. But unusually for low carbon legislation, the carbon price floor (CPF) is unpopular with green campaigners, while attracting support from some in the energy industry. What is it, and why is it earmarked to be chopped?
Designed to reduce greenhouse gas emissions from electricity generation, the CPF first appeared in George Osborne’s budget speech in March 2011. The chancellor announced the government’s intention to increase certainty for investors in low-carbon generation by putting a minimum price on the greenhouse gases emitted by the power sector………………………………………..Full Article: Source

Posted on 18 March 2014 by VRS |  Email |Print

China pledged on Sunday that it will make sure that 60 percent of its cities meet national pollution standards by 2020, with pressure growing to make cities liveable as hundreds of millions of migrants are expected to relocate from the countryside.
China’s environmental problems such as pollution and water scarcity are expected to intensify as rapid migration pushes urban infrastructures to the limit. Almost all Chinese cities monitored for pollution last year failed to meet the standards………………………………………..Full Article: Source

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