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Commodities Briefing 04.Jun 2014

Posted on 04 June 2014 by VRS |  Email |Print

According to the report the United States owes its top position to its resilient economy, better employment numbers, and dominance in technology and infrastructure. It is followed in the competitiveness ranking by three small economies - Switzerland, Singapore, and Hong Kong - all of which prosper from exports, business efficiency and innovation.
The report finds Europe is doing better than last year, thanks to its gradual economic recovery, but most of the big emerging markets are sliding in the rankings. It says the so-called BRIC countries - Brazil, Russia, India and China - are losing out in the competitiveness race as economic growth and foreign investment slow and infrastructure remains inadequate………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

New Zealand commodity prices fell for a third month in May, led by dairy products in the wake of a slide in world prices this year. The ANZ Commodity Price Index dropped 2.2 percent to 317.7 last month for an annual decline of 3.1 percent. In New Zealand dollar terms, prices fell 2.1 percent in the latest month and 6 percent in the year.
The commodity index comes after dairy product prices fell 4.2 percent in the latest GlobalDairyTrade auction overnight, the eighth straight decline, to a 16-month low. Economists say the drop in dairy prices mean the terms of trade, which reached a new 40-year high in the first quarter, is unlikely to push on to a record high any time soon………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Riding on increased investment interest in commodities, Societe Generale has launched a new commodity index that changes its mix of products monthly based on seasonal factors. The Societe Generale Seasonal Factor Commodity Index, which the bank started introducing to clients a month ago, has been very well received, the bank said.
“Seasonality is one of the most powerful drivers of commodity returns,” said Mark Keenan, head of commodities research in Asia at Societe Generale. These can range from weather seasons which can increase demand for energy, to the start of Indian festivals that boost demand for gold………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

A potential shortfall in investment in production in the Middle East could create a $15 increase in the oil price by 2025, the energy arm of the Organisation for Economic Co-operation and Development (OECD) said.
The world will need to invest $40 trillion in energy supply and $8trn on energy efficiency by 2035 to meet growing demand and falling output from mature sources of energy, the International Energy Agency (IEA) said in a report. A large proportion of the investment to increase output will need to come from the Middle East as a rise in non-Opec production such as US shale oil starts to lose steam in the mid-2020s………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

A potential shortfall in investment in production in the Middle East could create a US$15 spike in the oil price by 2035, the energy arm of the Organisation for Economic Co-operation and Development (OECD) said.
The world will need a total of US$40 trillion invested in energy supply and US$8 trillion on energy efficiency by 2035 to meet growing demand and falling output from mature sources of energy, the International Energy Agency (IEA) said in a report. A large proportion of this will need to come from the Middle East, as a rise in non-Opec production such as US shale oil starts to lose steam in the mid 2020s………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

The US has taken the economic offensive on the back of its recent shale oil and gas boom, but that bonanza will dwindle in the 2020s, leaving it again subject to Persian Gulf oil producers, a leading global energy agency said today. The question is whether the Gulf states will be ready to take back the mantle.
For the last few years, the US has undergone an identity makeover, with its experts crowing that, contrary to the national decline forecast by so many, it was beginning an industrial revival and achieving a measure of “energy independence.” Four decades after the Arab oil embargo shook the foundations of global power in 1973, the US might even withdraw its expensive security umbrella from the Persian Gulf petro-states, it has been suggested………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

International Energy Agency warns that the EU will lose a quarter of its electricity over the next decade as old power stations are shut down. Europe is at serious risk of power blackouts and may lose control of energy security without a radical overhaul of its shambolic policies, the world’s top energy watchdog has warned.
“In Europe we are facing the risk of the lights going off. This is not a joke,” said Fatih Birol, the International Energy Agency’s chief economist………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Energy supply investement at $1.6trn annually but needs to rise to $2trn to stop dangerous global warming, energy thinktank finds. The world is not moving fast enough on investment in low carbon energy to tackle climate change, new research from the International Energy Agency has found.
About $1.6 trillion is invested annually in the global energy supply, but while that represents a doubling of investment since the turn of the century, the amount needs to rise to $2 trillion if the world is to limit global warming to no more than 2C of temperature rises, the energy thinktank said………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

RBC Capital Markets is out with new research that looks to make sense of the factors that have created gold-price volatility this year. Gold prices are currently sitting at a four-month low, having fallen for five straight days — the longest losing streak for the precious metal in seven months. That follows a hot start to the year in which the precious metal racked up a more-than-10% gain in a mere two months.
“The gold price tends to be less predictable than that of other commodities; with large above ground stocks and only limited industrial use, the majority of demand is either for adornment or investment purposes and often, especially in Asian markets, both,” RBC analysts said in their research report released Tuesday………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Gold prices ended the U.S. day session near steady levels Tuesday but hit another four-month low early on. Mild short-covering rebound and perceived bargain hunting were offset by some light, chart-based selling pressure. Bears still have the firm overall technical advantage in both gold and silver markets.
A heavy slate of worldwide economic data this week is likely to impact the precious metals markets. August Comex gold was last up $0.90 at $1,245.00 an ounce. Spot gold was last quoted up $1.30 at $1,245.25. July Comex silver last traded up $0.031 at $18.77 an ounce………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

New York investment bank Goldman Sachs has picked up 466,000 ounces of gold from cash-strapped Ecuador. According to the South American nation’s central bank, Goldman acquired 1,165 gold bars, worth roughly $580 million at today’s ruling price.
Ecuador under socialist President Rafael Correa is seeking sources of cash “after borrowing more than $11 billion from China since defaulting on $3.2 billion of foreign debt five years ago,” reports Bloomberg………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

If gold investor sentiment reflects financial stress and anxiety, then it has clearly dropped since the price peaks of mid-2011, writes Adrian Ash at BullionVault. The stock market is setting new record highs, after all.
Right alongside, gold sentiment amongst private investors ebbed further in May, as our Gold Investor Index shows today. Wall Street’s S&P500 broke 1,900…a rise of 23% from 12 months ago and more than doubling from May 2009………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

The question every investor faces in a bull market is: Do I buy now, anticipating prices will continue higher — and chance getting clobbered if a correction arrives? Or do I wait for a pullback and possibly miss out on big gains? There’s risk either way.
Whilst we must remain patient and disciplined to avoid chasing silver, we must also be aware of when to accumulate the best silver prices to make profitable trades. Right now the silver price, which at US $18.76, is less than half of its high of $48 an ounce in 2011, could be set for a rebound………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Although the current proposal is not law and still has some work to be done before it is finalized, we are trying to put together a long-term plan for how to invest in this new world of lower carbon emissions. We are not of the school of thought that the E&P names will be impacted in the near future with emissions or carbon taxes but we do think that the utilities and certain commodity producers could see some significant upside in the years to come from this proposal.
Right now everyone will focus on solar, wind and other renewables but we think that the big growth in the pie will be in either natural gas or nuclear. We will have to wait until everything is finalized to see what the government is trying to incentivize utilities to trend towards, but the truth of the matter is that we have all been warned that change is on the way………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

A prominent backer of commodities hedge funds is shutting down after investors frustrated by market doldrums and high management fees took their money elsewhere.
Schroders’ Opus commodities fund, which contained $2.3bn at its peak, is closing after assets dwindled to hundreds of millions of dollars, according to people familiar with the matter. David Mooney and Cédric Bellanger, co-portfolio managers, will leave London-based Schroders………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Buying on margin is like shopping with a credit card, as it allows you to spend more than you have in your wallet. Buying on margin is an old technique practiced not only by seasoned investors and traders, but even rookies.
The prospect of being able to buy securities using more money than one has entices many investors to try out new products. But remember, the riskier the financial instrument, the higher the stakes when you opt for margin buying. Let’s look at how exchange-traded funds (ETFs) can be bought on margin and where to watch out!……………………………………….Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

For a number of reasons, I’ve been following the First Trust Global Tactical Commodity Strategy Fund since its launch in late October 2013. For starters, FTGC is a pioneer in the commodities ETF space in two ways: its actively managed investment strategy; and the open-ended structure it has as a security registered under the Investment Company Act of 1940 Act, which gives it unique tax implications.
Of course, FTGC crushing its peers in performance jumped out at me as well. FTGC has managed to return more than 12 percent since its launch on Oct. 23, 2013. During that same period, the S&P GSCI Total Return Index—our benchmark for the segment—returned 4.6 percent………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Jim Rogers, the legendary investor best known for his commodity prowess, books, and work with the Quantum Fund, is back in the news discussing his latest investment picks. Per usual, Rogers is looking at emerging markets, and also to nations that have been beaten down and could be compelling values for risk-tolerant investors.
This is an interesting strategy, particularly given that U.S. markets are still near all time highs, and many investors seem worried about the near term outlook for United States stocks. However, many emerging markets are nearly off-limits to U.S. investors as there are only a handful of ADRs from each nation which currently trade on American exchanges………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Chicago agricultural commodities dropped across the board Tuesday amid favorable weather and the potential for record harvests. Weather forecast for Central U.S. shows showers and storms will pull across the Plains and the Midwest every three to four days into late June, favorable to growth of grain crops.
Meanwhile, near to above normal temperatures look to persist into June 20, setting up ideal weather conditions for crops. Market analysts hold that long-term trends for grain crops remain bearish without any dire weather threat in U.S. and in other parts of the world………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Japan Exchange Group Inc., the country’s main bourse operator, is considering expanding into commodities and currencies.
“We have the ambition to expand our product base from securities into the other types of products including commodities,” Hiromi Yamaji, chief executive officer of Osaka Exchange Inc., a unit of Japan Exchange, said in an interview in London yesterday. Precious metals, rubber, oil, liquefied natural gas products and foreign-exchange futures and options are possible, he said………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Libya’s currency is under heavy pressure as a breakdown in security and a collapse of oil revenues due to port blockades have badly disrupted public finances and an economy already burdened by exploding state salary and subsidy bills.
Over the past two months, the dinar has fallen more than seven percent against the dollar on the black market, its first weakness since rebels demanding autonomy for eastern Libya seized oil export facilities 10 months ago………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Apple Inc will let software developers include virtual-currency transactions in their applications, paving the way for new forms of money to appear on iPhones and iPads.
“Apps may facilitate transmission of approved virtual currencies provided they do so in compliance with all state and federal laws for the territories in which the app functions,” Apple said in an update to its App Store review guidelines. Apple did not provide details on the approved virtual currencies………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Absolute cap to come into effect, climate adviser says on the day after US announces ambitious carbon plan. China, the world’s biggest greenhouse gas emitter, will limit its total emissions for the first time by the end of this decade, according to a top government advisor.
He Jiankun, chairman of China’s Advisory Committee on Climate Change, told a conference in Beijing on Tuesday that an absolute cap on carbon emissions will be introduced………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

America’s push to cut carbon-dioxide emissions is partly intended to spur other large emitters—especially China—to cut their own emissions more aggressively to tackle climate change. But will it work?
Other countries already have national policies aimed at cutting carbon-dioxide emissions, and they are much further along than the U.S. The world’s largest system for trading emission allowances is operated by the European Union, which covers more than 11,000 power stations and industrial plants in 31 countries, as well as airlines. And some countries have implemented carbon taxes………………………………………..Full Article: Source

Posted on 04 June 2014 by VRS |  Email |Print

Obama administration officials gave new life to cap-and-trade yesterday. Just don’t expect them to say so.
Republicans championed the approach decades ago then rejected it when President Barack Obama pushed it in 2009. States may now view the politically toxic concept as a way to comply with limits on carbon emissions from power plants Obama proposed……………………………………….Full Article: Source

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