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Commodities Briefing 12.May 2014

Posted on 12 May 2014 by VRS |  Email |Print

Commodities generally had a rotten 2013, but some experts now say prospects are more exciting, especially given that returns from developed stock and bond markets have been lacklustre so far this year.
Last year was an annus horribilis for the gold price in particular, which fell 28 per cent, its worst annual performance in more than 30 years. The Dow Jones-UBS commodities index, which tracks the prices of 20 commodities and has a bias to energy and agriculture, fell nearly 10 per cent in 2013………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

The term El Niño refers to a large-scale ocean-atmosphere climate interaction, linked to a periodic warming in sea surface temperatures across the central and east-central equatorial Pacific. The occurrence of one during India’s southwest monsoon (June-September) is associated with below-normal rain. And, hence, has a significant bearing on kharif crop production.
Between 2001 and 2010, there have been three years (2002, 2004 and 2009) when the rains were deficient, respectively by 19 per cent, 13 per cent and 23 per cent due to this. According to the latest update from India Meteorological Department (IMD), there is a 60 per cent probability of one this year. IMD feels El Niño could have an effect on August-September rains, while the Australian Bureau of Meteorology has stated an El Niño could develop as early as July. What needs to be seen is the intensity………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

The Organization of the Petroleum Exporting Countries won’t change its crude oil output level when it meets next month, Saudi Arabia’s Minister of Petroleum and Mineral Resources Ali Al-Naimi said Monday.
“Supply is highly sufficient. Demand is great. And the market is fairly stable. There’s no reason for a change. absolutely no reason,” Mr. Al-Naimi said. Asked if OPEC’s output cap of 30 million barrels a day is right, the oil minister said: “I think so. I know so.” He also said the current global oil price of $100 a barrel is the fair price “for everybody, consumer, producer and oil companies.”……………………………………….Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

The expansion in stockpiles of U.S. gasoline as refineries returned from maintenance and imports accelerated spurred speculators to cut wagers on rising prices by the most in more than three months.
Money managers reduced net-long positions by 14 percent from the highest level since February 2013 in the week ended May 6, U.S. Commodity Futures Trading Commission data show. Long positions fell 11 percent, the first drop in four weeks, and short positions rose 6.1 percent………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Oil prices heading for major correction after Russia’s attempt to use crude as a weapon to bully Western powers backfires. Oil prices are on the brink of possibly their biggest correction since the global financial crisis after Vladimir Putin’s gamble to use Russia’s crude as a political weapon backfired spectacularly on the Kremlin.
A potent energy superpower, Russia had thought that it could use its status as the world’s largest oil producer and biggest exporter of natural gas through cross-border pipelines to intimidate and quite literally bully Western powers into submission over Ukraine………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Defying the demands of the international community, the Iranian government insisted it will continue to boost oil exports according to the Wall Street Journal. As part of the interim international accord with P5+1 nations, Iran agreed last December to limit its oil exports to 1 million barrels per day for six months.
But in response to a WSJ question, Iranian Oil Minister Bijan Zanganeh said, “we are trying to increase exports. Our exports are above 1 million barrels a day.”……………………………………….Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

The International Energy Agency (IEA) has termed India’s plan to become energy independent by 2030 as a “very ambitious” and an “idealistic challenge”. This comes in the backdrop of oil minister M. Veerappa Moily’s plan of achieving the target by 2030, even as India, the world’s fourth largest energy-consuming nation, imports 80% of its crude oil and 25% of its natural gas requirements.
“Where 300 million Indians are lacking access to electricity and where per-capita electricity consumption is one-fourth of the world’s average, this is a very, very ambitious and huge challenge. It is not easy………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Oil markets seem to have been relatively untroubled by the fundamentals. The price of Brent crude futures for June delivery have even inched lower from $110 a barrel on April 24 to around $108.
Eric lee, an oil analyst with Citigroup, told Bloomberg Businessweek the past three years have been one of the most stable periods for oil in recent memory. Its range of daily price movements for the past year has been the smallest in more than 10 years, according to the US Department of Energy………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Gold speculators misjudged prices for a second consecutive week as the prospect of less stimulus from the Federal Reserve pushed futures lower.
Money managers raised their net-long position by the most since February in the week ended May 6. The next day, prices fell the most three weeks after Fed Chair Janet Yellen said the U.S. central bank’s four cuts in monthly bond purchases since November were “appropriate” because there is “sufficient underlying strength” in the domestic economy………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Gold has averaged less than $1300 an ounce and macro fundamentals continue to be weak for gold, according to Barclays Research. “Temporary bouts of strength have driven it above that level several times recently, but we continue to think the underlying fundamentals still point downwards.”
Demand in China, as indicated by volume traded on the Shanghai Gold Exchange, has firmed a bit as the monthly rolling average has seen a slight upturn over the past week. However, elsewhere in Asia, bar premiums have been unspectacular. They have remained flat in Singapore and Hong Kong at $1.10/oz and $1.00/oz, respectively, while they have fallen from $0.90/oz to zero in Tokyo………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Last year was a watershed for the gold market as the 12-year run in annual gains for the yellow metal came to an end following the dramatic price collapse in April 2013. The year ended with the most actively traded Comex gold futures contract slightly above the US$1,200/oz level - down 29 per cent from the start of 2013.
The result was an unprecedented structural change in global physical demand for gold characterised by the extensive retreat of Western institutional investors, and buyers in the key Asian markets stepping in to scoop up large quantities of gold………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

During the final phase of the last Gold rally between 2008 and 2011, we heard a lot about any number of bullish catalysts for gold: The long term decline of the US Dollar as the world’s reserve currency,Insatiable Asian demand for physical gold, The specter of hyperinflation resulting from the Federal Reserve’s quantitative easing policies, Negative real interest rates, Central bank accumulation of gold, And the list goes on……
As we sit here today in May 2014 none of these formerly bullish fundamental drivers appears to carry much weight in driving the day-to-day price of gold. When will this change? And what will be the next major fundamental driver in the next leg higher for gold?……………………………………….Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

The elites want war. Will they get war? In the past, it was a slam dunk. There was no nation strong enough to oppose the elite’s weapons of mass destruction, aka debt and the US military. How things have changed. The failed Western banking system is way past its expiration date. All the elites horses and all the elites men can never put back this broken derivative mess again.
War has always been the go-to tactic for the Rothschild-driven control-the-world-mentality. From the spawned chaos arising from their carefully chosen plan[s] for instigating war[s], not only would they ultimately prevail in their sick objective of manic control, they would make a ton of money and grow their operations even more………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Nickel extended gains to the highest price in two years on speculation that supplies of the metal used to make stainless steel will be tighter and prices will rise further in coming months.
The contract for delivery in three months on the London Metal Exchange added as much as 3.7 percent to $20,650 a metric ton, the highest since February 2012, and was at $20,641 by 11:00 a.m. in Tokyo. The price rose 9 percent last week, the most since February 2010………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Who remembers the commodity ‘super-cycle’? Just a few years ago, the term was on the tip of every investment commentator’s tongue. Many believed that prices of the major commodities would rise and rise in response to demand from the fast-growing emerging world, hungry for more food and more materials. Like many other certainties, the commodity boom has not been quite as expected.
For the last two years or so, the prices of most commodities have drifted lower. Recently, the price of copper, one of the bellwether commodities, fell to multi-year lows but there are now signs that industrial metals and other commodities may be starting to pick up. Agricultural commodity prices have bounced recently and inflows into commodity trackers are at the highest level for a couple of years………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Commodity funds provide good diversification with respect to the stock market. Over the past 5 years, the performances of commodity funds have significantly lagged the S&P 500. The funds UCI, RJI, and USCI have performed well in comparison to peers.
Commodities are “real assets” that run the gamut from oil and precious metals to agriculture. Whether or not this volatile asset class deserves a place in a conservative portfolio is a matter of debate but many financial planners recommend from 3% to 10%, depending on your investment objectives, time horizons, and risk profile……………………………………….Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

Low interest rates, a rebounding economy and speculative bubbles are putting pressure on the reserve bank to keep the currency from rising. The Reserve Bank of Australia has a problem on its hands. Interest rates are too low, the economy is getting pumped up and there are signs speculative bubbles forming. It is clearly time to be raising rates.
But that is the last thing the central bank needs for the Australian dollar now, which is already strong enough as far as it is concerned. The faintest whiff of higher rates could launch the currency into a new phase of unbridled strength………………………………………..Full Article: Source

Posted on 12 May 2014 by VRS |  Email |Print

The biggest problem in the world economy is that there isn’t enough demand out there, and there is more supply. The lack of demand has triggered a series of competitive currency devaluations, which the United States started. The devaluations, started all sorts of carry trades and capital flows from the United States to other countries, which is hurting exporters, reversing globalization, and will lead to deflation and the eventual end to fiat currencies.
The world under the Gold Standard with fixed exchange rates was different. A government could just declare overnight that their currency has devalued against the price of gold 20%. Today, however, a government can’t just declare its currency devalued. They have to print money to devalue their currency, which is what has been going on………………………………………..Full Article: Source

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