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Commodities Briefing 26.Mar 2014

Posted on 26 March 2014 by VRS |  Email |Print

Commodities have mostly outperformed other assets by a wide margin so far this year, analysts at Citi said on Tuesday. Of the roughly 27 active contract markets that Citi regularly tracks, nearly 20 commodities show increases in value in the first quarter to date, but not all are destined to continue their rise.
A bar graph provided by Citi shows that among the commodities, coffee and lean hogs have seen the biggest price increases so far this year, while West Texas Intermediate crude has seen the least. Among the decliners, Brent crude saw the least amount of percentage losses, while iron ore saw the most……………………………….Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

That 2013 was a year when equities ruled supreme is now well recorded history. Generally speaking, expectations at the end of the year were that 2014 would be more of the same. Among the popularly reported forecasts were the S&P 500 going to 2,000 while $Gold would plunge to $1,050.
While the calendar will ultimately decide the wisdom of those forecasts, reality is already casting doubt on them. Perhaps the numbers in those forecasts were inadvertently switched. Demand for Gold and Agri-Commodities seems to be the dominant factor for prices this year, even after taking into account unique supply situations in some cases. As the year continues to unfold, investor attitudes on commodities, and in particular Gold and Agri-Commodities, need to adapt to the reality of the situation. ………………………………Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

U.S. oil production from shale formations such as the Bakken in North Dakota and Eagle Ford in Texas would remain economically viable even if world crude prices drop by as much as 30 per cent from today’s levels, a U.S. analyst says.
The industry that has revolutionized North American energy supply faces numerous risks, including the potential for weak markets, transport constraints and the inability of technology to keep up with demand, though none currently looks like it could force a halt in drilling for the light, tight oil, said Skip York, analyst at Wood Mackenzie, the international energy consultancy……………………………….Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

Recent rises in the price of crude oil have also driven gasoline prices higher, to around $3.50 per gallon currently. Despite the recent rally, gas prices might actually be in for a decline in the coming months. Don’t blame OPEC this time…
OPEC’s policy to maintain its quota at 30 million barrels per day has driven oil prices higher in the past. But in recent months OPEC’s production has increased, mainly due to the slow recovery of Libya’s oil production and the sharp rise in Iraq’s production. Moreover, OPEC’s current oil production is higher than the agreed upon quota: As of February, output reached 31.4 million barrels per day. If OPEC continues to increase its production, this trend could push oil prices lower……………………………….Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

After slumping in 2013, gold has moved higher this year on worries over the Ukraine crisis and U.S. economic growth. While miners have welcomed the rally, the battle between the gold “bugs” and bears still appears far from decided.
“Gold excites people,” Nick Sheard, chairman of Australian minerals explorer Carpentaria Exploration, told The Diplomat. “If you’ve ever panned gold, when you see that speck of gold you get quite excited and it’s the same with investors.” He added, “Gold is still considered a reserve currency and whenever there’s a crisis you see strong buying.”………………………………Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

Despite a strong start to 2014, gold prices are likely to consolidate lower due to longer-term investors’ price sensitivity and shorter-term investors’ concerns about US Federal Reserve monetary policy, analysts from the New York-based research firm CPM Group said Tuesday.
“CPM Group does not expect gold prices to decline significantly from current levels, but neither does it expect a sharp increase in prices over 2014 and 2015,” analysts said in the group’s Gold Yearbook 2014, which was released Tuesday. In 2014, gold prices are expected to average $1,256.77/oz, down 10.8% from the $1,409.52/oz last year, CPM analysts said in the report……………………………….Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

After a disappointing 2013, gold has started off the year doing quite well, despite finishing at a one-month low during the Monday trading session. Nevertheless, some Wall Street traders and contrarian investors see gold hitting new highs in the near future.
One forecast that has been making headlines was made by James Rickards, portfolio manager at West Shore Funds, in which he suggested the yellow metal could rise anywhere from $7,000 to $9,000 within the next three to five years……………………………….Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

Governments around the world especially in the emerging economies are now beginning to worry about inflation and currency devaluation. Turkey and India have taken emergency measures to increase rates and the U.S. is tapering as there are growing concerns about significant declines in their respective fiat currencies.
Even the Russians and Chinese are concerned. The ruble and yuan are hitting new lows. Paper currencies may be on the verge of failing. Eventually, a new currency backed by gold or silver could be established to restore trust……………………………….Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

Copper continued to recover from a recent sharp sell-off, rising more than 2 per cent on Tuesday as traders closed bearish positions.
The red metal, which is used extensively in construction and electrical applications, hit a three-and-half year low earlier this month on concerns about China, which accounts for 40 per cent of global copper demand………………………………Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

The Internal Revenue Service made its first pronouncement on the issue Tuesday, saying it will treat bitcoin and other virtual currencies like property such as stocks, and not currency, giving a potential boost to investors but imposing extensive record-keeping rules. The rule generally would impose capital-gains taxes, rather than higher regular tax rates, on investors’ profits.
The announcement brought cautiously favorable reaction from the fledgling industry. But some experts predicted problems for bitcoin as well as for the IRS in enforcing the reporting and withholding requirements in the guidance……………………………….Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

Too much volatility for emerging-markets currencies — and not enough in the developed world — is stinging traders. Increasing swings in exchange rates from Turkey to Hungary are wiping out profits in the carry trade, where investors buy higher-yielding assets funded by currencies with lower borrowing costs.
Volatility in Group of Seven markets is receding as central banks hold interest rates at record lows and telegraph their next policy moves, confusing funds relying on trending movements for trading signals……………………………….Full Article: Source

Posted on 26 March 2014 by VRS |  Email |Print

Chinese enterprises should proactively participate in pilot carbon emission trading systems (ETS) and regard it as an opportunity to develop their businesses, a report by US accounting firm Ernst & Young (E&Y) said on Monday. With China planning to expand its pilot carbon ETS on a nationwide scale in its new five- year plan starting 2016, such involvements could prove to be beneficial, the report said.
Companies must learn about the details for monitoring and reporting mechanisms on their carbon emission and energy usage status, in order to sustain their competitiveness in the future, Chen Xiaoyan, director of Climate Change and Sustainability Services at E&Y, told a media briefing on Monday……………………………….Full Article: Source

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