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Commodities Briefing - Archive | June, 2015

Commodities Drop as Greek Turmoil Spurs Concern Demand Will Wane

Posted on 30 June 2015 by VRS  |  Email |Print

Commodities fell the most in a week on concern that Greece’s deepening financial crisis will threaten global economic growth and demand for energy and metals. The Bloomberg Commodity Index of 22 raw materials lost as much as 0.9 percent, the most since June 19. Energy products and industrial metals led declines, with crude oil dropping to a three-week low and nickel slumping to the lowest since 2009.
Greece shut its banks and imposed capital controls in a bid to avert the collapse of its financial system, increasing the risk that it will be forced out of the euro. After failing to reach a deal with creditors, the country will vote in a July 5 referendum on proposals needed to restore bailout aid………………………………………..Full Article: Source

Greece and China weigh on commodities

Posted on 30 June 2015 by VRS  |  Email |Print

Commodities did not escape the market turmoil caused by Greece’s capital controls and a hefty drop in Chinese equities, with the stronger dollar and risk aversion hitting raw materials led by oil and metals. ICE August Brent, the international benchmark that has traded within a tight range of $61-$66 a barrel for several weeks, fell $1.41 a barrel to $61.86. In the US, Nymex August West Texas Intermediate fell $1.23 a barrel to $58.40.
On the London Metal Exchange, amid a sea of red for industrial metals prices, nickel plumbed a six-year low. The metal, an ingredient for stainless steel, fell 4.6 per cent to $11,855 a tonne, while aluminium was off 1.5 per cent, copper fell 0.5 per cent, and tin dropped 2.5 per cent………………………………………..Full Article: Source

El Niño set to disrupt key commodities in 2015

Posted on 30 June 2015 by VRS  |  Email |Print

El Niño 2015 is underway and set to hit wheat, coffee and sugar cane production leading to volatile prices, warns a Rabobank report. With buffer stocks for these commodities at ‘comfortable levels’, some of the impact of a particularly strong El Niño would be buffered - but not completely shielded from fundamental and speculative influences. This also held for soy oil and palm oil, the report said.
While ‘meaningful’ climate disruptions had yet to be observed, Rabobank warned that key drivers of the phenomenon – such as a rise in sea surface temperatures – would intensify from September to November. The National Oceanic and Atmospheric Administration(NOAA) has predicted a strong event for 2015………………………………………..Full Article: Source

How Will An Iran Deal Impact The Global Oil Market?

Posted on 30 June 2015 by VRS  |  Email |Print

Analysts at Morgan Stanley Research recently polled 299 investors about the impact that a potential Iranian nuclear deal would have on the global oil market. Analyst Haythem Rashed summarized the survey results and noted important upcoming deadlines for oil investors to watch when it comes to the Iran negotiations.
Morgan Stanley asked poll participants how much Iranian oil exports will increase by the end of 2015 and into 2016. The most popular choice for 2015 was an incremental Iranian export increase of 200kb/d. Nearly 40 percent of respondents anticipate Iranian exports to increase by 200-300kb/d, while 15 percent of those polled see no change to Iran’s oil exports this year………………………………………..Full Article: Source

Will Opec gain with higher production?

Posted on 30 June 2015 by VRS  |  Email |Print

What is common between the production and marketing approaches of the 12-member Organization of the Petroleum Exporting Countries (Opec) and the world’s three largest producers of iron ore - Vale, BHP Billiton and Rio Tinto? The fall in prices of crude oil from $115 a barrel in June 2014 to $64 now and of iron ore from $205 a tonne to $62.5 have not proved enough disincentive for leading producers of the two most globally traded commodities to apply a production brake.
Opec and the ore triumvirate do not see merit in restricting production at lowest cost enterprises, which will allow high-cost producers to stay in business. As big miners remain engaged in commissioning large new capacity and others that cannot abandon projects nearing completion, the seaborne ore glut could rise to 260 million tonnes (mt) by the end of next year………………………………………..Full Article: Source

Oil Speculators Least Bullish in 10 Weeks on Iran Talks

Posted on 30 June 2015 by VRS  |  Email |Print

Hedge funds are the least bullish on crude in 10 weeks as talks resumed on a nuclear accord with Iran that could lift sanctions and swell supply. Money managers trimmed their net-long wagers on West Texas Intermediate by 1.3 percent in the week ended June 23, U.S. Commodity Futures Trading Commission data show.
Shorts rose 8.9 percent while long positions increased 0.7 percent. Speculators curbed bullish bets on Brent crude, the European benchmark, to the lowest in three months. U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif met June 27 in Vienna. Iran says it could double oil exports from 1 million barrels a day within six months if sanctions are lifted………………………………………..Full Article: Source

Dollar gold price could go below $1,000/oz for short period: Natixis

Posted on 30 June 2015 by VRS  |  Email |Print

The dollar gold price still has room to move lower, below $1,000/oz for a short period of time, Natixis analyst Bernard Dahdah told Platts Monday. In an email Dahdah said that, “even under the stress of the situation in Greece, the price of gold hasn’t benefited much. The market is fixated on the potential interest rate hike by the Federal Reserve. As we get closer to this hike so we expect gold prices to drop gradually.”
Gold benefits from a low interest rate environment as a non-yielding asset class. The turmoil in Greece, where a potential default on national debt and in turn possible exit from the eurozone has had a near-zero knock-on effect to the gold price in dollar terms………………………………………..Full Article: Source

Gold price suggests investors not betting on Grexit

Posted on 30 June 2015 by VRS  |  Email |Print

Ultimate safe-haven asset fades after brief rally, as investors dismiss possibility of Greek exit from eurozone. A gold rush has failed to materialise as Greece edges closer to total financial collapse, suggesting investors aren’t betting on an imminent ‘Grexit’.
A brief rally in the precious metal in early trading faded towards the close in London, as investors discounted the possibility of Greece exiting the currency bloc, despite the government’s shut-down of the country’s banks and stock market. Gold – which is traditionally seen by markets as the ultimate safe-haven asset – initially gained 2.5pc, but by the afternoon in London it had fallen back to a level of $1,176 per ounce………………………………………..Full Article: Source

Gold price standoff despite confluence of positives

Posted on 30 June 2015 by VRS  |  Email |Print

Price has been remarkably steady over the past week despite a number of factors, which might have been expected to cause it to rise. The gold price has been trading in an extremely narrow range for the past few days, despite a number of seemingly positive pieces of news. It certainly seems that those who do not wish the price to rise back even to the $1,200 level or above have the markets firmly under control.
But it also appears that those who do not wish to see further falls are maybe helping prices stabilise too. In other words there is something of a standoff. So what are the positive pieces of news? First and foremost perhaps is the continuing lack of a real solution to the Greek debt crisis. Contrary to numerous reports that a settlement was about to be reached between Greece and its creditors it appears that no such thing has occurred………………………………………..Full Article: Source

Upside Momentum for Gold Looks Strong in Second Half of the Year

Posted on 30 June 2015 by VRS  |  Email |Print

The Shanghai Gold Exchange is expected to receive approval from its central bank for a yuan-denominated gold fix soon, according to Reuters. If the yuan fix takes off, China could draw buyers in the mainland and foreign suppliers to pay the local price, making the London fix less relevant in the world’s biggest bullion market.
Additionally, the Shanghai Gold Exchange is in discussions with the CME Group about listing each other’s contracts on their respective exchanges, according to the exchange’s vice-president. Trading volume on the Shanghai Gold Exchange for the benchmark contract soared this week to the highest on record, according to data on Bloomberg, going back to 2002. The Shanghai Composite Index dropped more than 10 percent in the last two trading days of this week and is down nearly 20 percent from its highs………………………………………..Full Article: Source

Jim Rogers Gold Correction Forecast

Posted on 30 June 2015 by VRS  |  Email |Print

A Jim Rogers gold prediction is taken seriously by investors. And today (Friday) we got a fresh Jim Rogers gold prediction courtesy of a MarketWatch interview. “Gold is in a correction, and the correction has gone on for four years,” Rogers said.
“Although I am not buying gold, I am expecting an opportunity to buy gold sometime in the next year or two. For instance, if gold goes under $1,000, I hope I’m smart enough to buy a lot more gold.” When Jim Rogers speaks, he is taken seriously by investors – and for good reason………………………………………..Full Article: Source

Copper benefits from equity margin calls

Posted on 30 June 2015 by VRS  |  Email |Print

The abrupt reversal in China’s stock market has produced one unlikely beneficiary: copper. Though heavily tied to the fortunes of the Chinese economy, copper was the only major industrial commodity that rose on Monday. That may reflect Chinese hedge funds scrambling to buy back bearish bets against the metal, as they faced rising margin calls from the equity market.
Many Chinese funds had bet that a slowing economy would weigh on copper while a subsequent loosening of monetary policy would boost equities, leading them to take opposing positions in the two markets………………………………………..Full Article: Source

Highland ETFs Offer Hedge Fund-Mimicking Alternative

Posted on 30 June 2015 by VRS  |  Email |Print

Nervous about a tired bull market, rising bond yields and a potential Greek exit? Investors no longer have to search far or pay a steep hedge fund fee for peace of mind, according to Ethan Powell, chief product strategist for Highland Capital Management Fund Advisors.
He said his company’s three new alternative exchange-traded funds “run anywhere between 50% net long to 75% net long so right off the bat you have muted exposure to the marketplace which is where you want to be in this type of uncertain market,” said Powell. The three ETFs that replicate hedge fund strategies are: Highland HFR Global ETF (HHFR), Highland HFR Event Driven ETF (DRVN) and the Highland HFR Equity Hedge ETF (HHDG). All three new Highland ETFs carry fees of 0.85% per year………………………………………..Full Article: Source

Is now a good time to buy U.S. ETFs?

Posted on 30 June 2015 by VRS  |  Email |Print

If you’re investing for the long haul and it isn’t a big lump sum amount, now is as good a time as any to buy U.S. ETFs. Why do I say that with such confidence? Because I’m not a market timer. I think it is almost impossible to predict where the market will move in the short term.
There are those who cite the Shiller P/E to support the view that the market is inflated. And others, like Terry Shaunessy of Shaunessy Investment Counsel, who disagree. “Both the S&P 500 and large-cap international markets continue to look attractive as the companies that dominate these indexes are global companies that sell their products worldwide, such as Apple in the U.S. or Nestlé in Europe,” he says………………………………………..Full Article: Source

Hedge funds wrong-footed by wheat price surge

Posted on 30 June 2015 by VRS  |  Email |Print

Hedge funds look to have been wrong-footed by the surge in wheat futures late last week, and saw profits dry up in soybeans as a rising market encouraged them to cover short positions at the fastest rate on record.
Managed money, a proxy for speculators, cut by more than 58,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Baltic Exchange ship futures platform examines move into commodities

Posted on 30 June 2015 by VRS  |  Email |Print

London’s Baltic Exchange is studying a potential foray into commodities and is open to proposals on tie-ups as other exchanges attempt to boost volumes, its chief executive said. Baltex, the Baltic’s digital shipping platform, was launched in 2011 as the first central electronic marketplace for freight forward agreements (FFAs), which allow investors to take positions on freight rates at a point in the future.
Since the beginning of this year, the previously loss making platform, has reached break even levels after Baltex became a venue for presenting block futures at the start of December………………………………………..Full Article: Source

India: Commodity Exchanges’ Turnover Up 20% Till June 15 of This Fiscal

Posted on 30 June 2015 by VRS  |  Email |Print

Turnover of the commodity exchanges rose by 20 per cent to Rs 13.97 lakh crore between April 1 and June 15 period of this fiscal on increased trade in farm and energy items. The turnover stood at Rs 11.66 lakh crore in the year-ago period, commodity market regulator Forward Markets Commission (FMC) said in a statement.
As per the FMC data, the turnover from energy rose by 57 per cent to Rs 4.02 lakh crore till June 15 of this fiscal, as against Rs 2.55 lakh crore in the year-ago period. Agri-commodities’ turnover increased by 24 per cent to Rs 2.95 lakh crore from Rs 2.38 lakh crore, while turnover of metals rose by 16 per cent to Rs 2.94 lakh crore from Rs 2.54 lakh crore during the period under review………………………………………..Full Article: Source

Euro currency calm counters Greece fears

Posted on 30 June 2015 by VRS  |  Email |Print

Queues at cash machines, emergency bank holidays, introduction of capital controls and a hastily convened referendum — a cocktail of events that would normally be guaranteed to induce market heatstroke. And yet the way the euro reacted to these seemingly seismic events in Greece on Monday suggested the market was displaying a rare outbreak of cool maturity.
True, the start of the Asian trading session saw the euro drop 1.5 per cent against the dollar and much more against the yen. But when the European markets awoke, the euro was repairing much of those losses and that trend extended into the New York trading day, surprising plenty who had expected a lot more volatility from a market renowned for explosive reactions………………………………………..Full Article: Source

Swiss Sell Francs to Stabilize Currency After Greek Flare-Up

Posted on 30 June 2015 by VRS  |  Email |Print

Swiss National Bank President Thomas Jordan said the central bank intervened to stabilize the franc, which surged after Greek Prime Minister Alexis Tsipras called a referendum on bailout terms. “Yesterday and overnight there was an increased demand for francs,” Jordan told a conference of Swiss executives in Bern on Monday. “The euro was under selling pressure and the SNB intervened in the market.”
Tsipras’s decision to call what is effectively a public vote on Greece’s euro-area membership is also a blow for Switzerland, where the currency’s appreciation is pushing the economy toward a recession………………………………………..Full Article: Source

The pope’s ecological vow

Posted on 30 June 2015 by VRS  |  Email |Print

In the days just before its publication, those involved in drafting the pope’s controversial eco-encyclical Laudato Si’ were much exercised about how it would be received by conservative critics. But Pope Francis, Vatican insiders tell me, was unfazed. He remains so in the face of the onslaught of criticism that has, indeed, ensued.
The pope’s acceptance that global warming is almost certainly man-made has irked the vocal minority with more skeptical views. They say Francis has overlooked the ability of technology to provide solutions to climate change. They’ve upbraided him for ignoring the role of free markets in lifting millions out of poverty. They’ve criticized his dismissal of birth control as the answer to an overcrowded planet………………………………………..Full Article: Source

China ready to go further on climate change: sources

Posted on 30 June 2015 by VRS  |  Email |Print

China appears ready to set a more ambitious climate change pledge by moving up the timeline for peaking its carbon emissions and opening the possibility of sending money to other countries to take action, according to EU sources close to the negotiations. The declaration is expected no later than Tuesday, following parallel summits with China and the EU in Brussels, and in New York with United Nations members.
This follows a round of negotiations in New York over the weekend between China, the EU, the United States, South Africa, Brazil and the UN. The European Commission’s climate action and energy chief, Miguel Arias Cañete, flew to New York on Friday to negotiate directly with Xie Zhenhua, China’s special representative for climate change, where he urged Beijing to submit its planned pledge for the COP21 summit in December, known as the Intended Nationally Determined Contribution (INDC), on Monday………………………………………..Full Article: Source

Water: The Next Tradable Commodity?

Posted on 30 June 2015 by VRS  |  Email |Print

Water will one day be soon traded as a commodity. Setup in 2003 as an unmanaged benchmark, the Palisades Water Index is tracked by many water indexes and ETFs. As the popular rhyme goes: “Water, water everywhere, but not a drop to drink” tweet.
Public perception has begun to change regarding water no longer being an infinite resource as we previously thought. Despite it covering 68% of the surface of the planet, the amount that actually serves a purpose for humans is only a mere 0.3%. With what some perceive as an “epidemic” expanding globally, experts predict that the only sustainable way in managing water is to trade it on a futures exchange, similar to other natural commodities such as oil and gold………………………………………..Full Article: Source

Bank for International Settlements warns of emerging market risks

Posted on 29 June 2015 by VRS  |  Email |Print

Economists and foreign investors may have overestimated the potential economic output of a quintet of Latin American countries by 2 percentage points, leading to the possibility of sharp financial outflows when reality sinks in. Separately, “massive borrowing” by emerging market companies has also left them vulnerable to funding reversals if and when investor sentiment towards EMs reverses.
These are among the warnings from the Bank for International Settlements, commonly known as the central bankers’ central bank, in its annual report, released on Sunday. Amid slowing economic growth across much of the emerging world, the BIS says that a “moderation” of growth from the very high rates seen in recent years is “probably unavoidable”………………………………………..Full Article: Source

Latin America: The loss of El Dorado

Posted on 29 June 2015 by VRS  |  Email |Print

After the commodity boom, the region needs a new formula for growth. It was wonderful while it lasted. For much of this century Latin America saw robust economic growth, a big fall in poverty and a swelling of the middle classes. Now the good times are over. Emerging markets everywhere are subsiding like a cooling soufflé. But Latin America has gone stone cold. The IMF expects growth of just 0.9% in 2015, which would be the fifth successive year of deceleration.
Many economists are talking of a new normal of growth of only 2% or so a year—less than half the region’s pace during the boom. What has gone wrong? The short answer is that the great commodity supercycle triggered by the industrialisation of China is over. Rising exports of minerals, soya beans and fuels lifted many South American economies. Without that fillip the region has converged downwards to the 2.4% long-term growth rate of Mexico, which is not a big commodity exporter………………………………………..Full Article: Source

How Asia avoided a commodity crisis

Posted on 29 June 2015 by VRS  |  Email |Print

Edmund Harriss, manager of the Guinness Asian Equity Income fund, says Asian countries have proved resilient to recent financial and commodity crises by becoming integrated manufacturing hubs that are not dependent on commodities
The BRIC economies have been a popular investment concept, but the economies of Brazil and Russia have proved too dependent on commodities. This was to their advantage as prices rose, especially during the China investment boom, but as this slowed, falling commodity prices left their economies cruelly exposed. Both notably failed to broaden their industrial bases in the good times. Their currencies have now weakened and both are struggling with recession and inflation………………………………………..Full Article: Source

India: Disappointing rains may increase prices of key commodities by 6-20% in July

Posted on 29 June 2015 by VRS  |  Email |Print

The monsoon’s flying start has depressed the prices of key commodities to such an extent that analysts and market watchers believe that if the rains, as the government’s weather bureau forecasts, turn out to be a damp squib in July these products could bounce back by as much as 6-20 per cent.
IMD has forecast rainfall in June-September period to be 12 per cent below normal because of the El Nino phenomenon, while private forecaster Skymet is sticking to its prediction of a normal monsoon, or 102 per cent of long period average. However, rainfall in June through Thursday has been 28 per cent above normal, pushing down the prices of many foods………………………………………..Full Article: Source

India: Agri commodities decline on higher acreage, favourable monsoon

Posted on 29 June 2015 by VRS  |  Email |Print

Prices of agri commodities declined by upto 14% so far this month on prospects of bumper output this kharif season following better than forecast monsoon rainfalls and higher acreage. While soybean price fell by 14% to trade at Rs 3444 a quintal in Indore mandi, chana slumped by 13% to Rs 4162 a quintal in New Delhi market. Jeera prices in Unjha (Gujarat) slipped by 11% to Rs 16035 a quintal. Others commodities also followed suit.
As per latest sowing data released by the Ministry of Agriculture, total area sown till June 26 stood at 16.56 million hectares, up by a staggering 23% from the same time last year. Kharif crop sowing picked up during last week following spread of rainfalls. While pulses sowing moved up by 80%, cereals and oilseeds sowing rose by 15% and 427% respectively………………………………………..Full Article: Source

One of Indonesia’s Richest Men Is Bullish on Commodity Processing

Posted on 29 June 2015 by VRS  |  Email |Print

As the head of one of Indonesia’s largest investment companies, Peter Sondakh knows to follow market trends. It’s the reason he took up smoking cigars last year, he says, beneath the whir of air purifiers in his office. It’s also, he says, partly why he’s selling off stakes in his palm oil plantation – Indonesia’s third largest – in the hope of moving toward processing, refining and trading at a time when slumping commodity prices and weakened demand for raw materials from China have dented the economy.
“I pride myself in adding value,” said Mr. Sondakh, whose PT Rajawali Corp. is one of Indonesia’s biggest conglomerates with investments in mining, property, plantations and media. “Added value products will have more profit.”……………………………………….Full Article: Source

Saudi Kingdom, Russia vie for global oil market foothold

Posted on 29 June 2015 by VRS  |  Email |Print

In the rapidly changing geopolitical environment, Saudi Arabia and Russia are forging ahead - fostering a closer relationship - in major sectors including the all important energy sector. When the Saudi Deputy Crown prince Mohammad bin Salman, accompanied not only by the Foreign Minister Adel bin Jubeir but also the Petroleum Minister Ali Al-Naimi called on Russian President Vladimir Putin in St. Petersburg on June 18, six major deals were signed between the world’s two top crude producers.
The deals ranged from agreement in defense sector to enhanced cooperation in energy development. It also covered greater cooperation on nuclear energy development. Citing unnamed sources, Al-Arabiya reported the kingdom planned to build 16 nuclear reactors and Russia has agreed to play a significant role in operating them………………………………………..Full Article: Source

US becomes biggest oil producer in 2014, surpasses Saudi Arabia

Posted on 29 June 2015 by VRS  |  Email |Print

The United States has overtaken Saudi Arabia as the world’s biggest oil producer in 2014 while India has recorded the highest growth in energy consumption among major economies. The US produced 15.9 per cent more oil in 2014 at 11.6 million barrels of oil per day to topple Saudi Arabia’s 11.5 million bpd production, according to BP Plc’s Statistical Review of World Energy released on Wednesday.
Russia with 10.8 million bpd oil production was placed third. The US surpassed Russia as the world’s largest producer of oil and gas, producing 1,250.4 million tons of oil and oil equivalent natural gas in 2014. This compared with Russia’s 1,062 million tons of oil equivalent. BP said the US shale revolution helped it overtake “Saudi Arabia as the world’s biggest oil producer and surpass Russia as the world’s largest producer of oil and gas.”……………………………………….Full Article: Source

Experts say Iran oil output to rise 500 bpd before 2016

Posted on 29 June 2015 by VRS  |  Email |Print

Many may have already started to speculate when economic sanctions against Iran will be lifted in case the country manages to seal a deal with the P5+1 group of countries. Nevertheless, some have even gone further to speculate when Iran will see the economic objectives it has set for a post-sanctions era become materialized.
Many may agree that the most important objective that Iran has set for itself is to increase its oil production capacity. Iranian officials had already voiced optimism that the country will be able to increase its crude oil production by 500,000 barrels per day before the end of 2015 if anti-Iran sanctions are lifted. However, what many may want to know is what the impacts of an increased Iran oil production will be on the market already under the pressure of excessive supplies………………………………………..Full Article: Source

This could be the tipping point for oil prices

Posted on 29 June 2015 by VRS  |  Email |Print

Record oil production meeting a wave of surprisingly strong demand has reined in world oil prices, creating a delicate balance that could be tipped either way—and the most immediate catalyst may be Iran’s nuclear talks.
The market has been awaiting the outcome of the negotiations ahead of a June 30 deadline, as an agreement could put 1 million barrels of Iranian crude back on the market eventually. U.S. crude futures have been locked between $57 and $62 per barrel—since late April………………………………………..Full Article: Source

OPEC crude market share shrinks to 12-year low

Posted on 29 June 2015 by VRS  |  Email |Print

Booming U.S. shale production helped cut OPEC’s global crude market share to a 12 year low last year. According to OPEC’s Annual Statistical Bulletin, the group’s share of the global crude market sank to 41.8 percent in 2014, down from 43.3 percent the year before.
The 1.5 percent slide marks OPEC’s lowest crude market share level since 2003, Bloomberg News said. According to the bulletin, Libya accounted for over half of OPEC’s output decline as two rival governments continue to fight for control of the oil rich country………………………………………..Full Article: Source

Gold will fall to $800 by end-2016

Posted on 29 June 2015 by VRS  |  Email |Print

The sad truth is that gold is trapped in a vicious bear market. Gold prices have fallen from $1,930 in September 2011 to barely $1,175 now, a time during which the US stock market has almost doubled. Gold was unable to even hold $1,200 an ounce when rumors of a Troika-Greece debt bust mesmerised the European stock markets. It is tough to be a goldbug, even in the cloistered banking counting rooms of Credit Suisse and UBS. True believers (and their poor clients!) in Dubai have been gutted by gold linked “structured notes”.
There are myriad factors that could cause gold prices to fall to $800 an ounce in the next two years. US economic momentum and the robust payrolls data makes a hawkish Federal Reserve interest rate cycle inevitable. This means the dollar will continue its rampage against the euro, yen, emerging markets currencies and crude oil. A surge in the US Dollar Index, up almost 20 per cent since last June, is the kiss of death for gold. ……………………………………….Full Article: Source

Gold Miners’ Strike No Cure for Price Woes

Posted on 29 June 2015 by VRS  |  Email |Print

Languishing gold prices could get some help as miners in South Africa enter wage negotiations with the industry’s labor unions. But it’s unclear how much difference even a significant strike will mean to prices.
South Africa, at one time the world’s top gold producer, is no longer the heavyweight it once was, but it remains a major player. Unions representing more than 80% of the country’s gold workers are demanding as much as double their current wages in negotiations that began June 22. Industry watchers predict the two unions will settle for much less but not before striking and reducing the country’s gold output. The potential for such an event could edge gold prices higher in weeks ahead………………………………………..Full Article: Source

Discount on gold prices widens in India

Posted on 29 June 2015 by VRS  |  Email |Print

Gold prices in India are now ruling at a discount to international prices. Thanks to weak demand, bullion dealers are quoting discounted prices for their inventory. Prices in the spot market quoted at a discount of $8/ounce to the London price last week. This is lower than a $0.5/ounce discount in the beginning of June.
Gold BeES, Goldman Sachs’ gold exchange-traded fund, closed at Rs2,422 on Friday on the bourses, a discount of 2 per cent to its NAV of Rs2,467.68. Spot gold prices declined 2 per cent to close at Rs2,634.9/gram. Bullion dealers, however, expect demand to catch up in the coming weeks as they expect good monsoon rains will cheer rural consumers………………………………………..Full Article: Source

Silver Prices About to Hit $50.00?

Posted on 29 June 2015 by VRS  |  Email |Print

Silver is one of the most underappreciated commodities around. Back in 2011, an ounce of gold was worth 32 ounces of silver. Today, that same ounce of gold translates to 74 ounces of the grey metal. Does that mean gold has gotten more valuable or that silver has gotten cheaper?
Since its peak a few years ago, silver prices have dropped nearly 70%. Gold prices have also fallen by an astonishing 35% during the same period, which convinces me that investors got overly pessimistic about silver during the pullback. So, what should the true price of silver be?……………………………………….Full Article: Source

$8 Trillion Alternative Energy Boom Is A Win For Copper

Posted on 29 June 2015 by VRS  |  Email |Print

Here’s a bit of energizing news: In 2014, for the first time in four decades, the global economy grew along with energy demand without an increase in global carbon emissions. That’s according to energy policy group REN21’s just-released Renewables 2015 Global Status Report, which attributes this stabilization to “increased penetration of renewable energy and to improvements in energy efficiency.”
What this means is that as the world’s population continues to grow, and as more people in developing and emerging countries gain access to electricity, the role alternative energy sources such as wind, solar and geothermal play should skyrocket. Between now and 2040, a massive $8 trillion will be spent globally on renewables, about two thirds of all energy spending, according to Bloomberg New Energy Finance. Solar power alone is expected to draw $3.7 trillion………………………………………..Full Article: Source

Metals complex the killing fields, but bravehearts press on

Posted on 29 June 2015 by VRS  |  Email |Print

Short iron ore, avoid rare earths, steer clear of alumina and time to worry about zinc going off the boil — quite a week on the commodities front. A quick check on the mood as gauged a year ago by Pure Speculation shows that not all that much has changed in the past 12 months.
In mid-2014 we dismissed the “happy days are here again” mantra from many of the more bullish forecasts, adding that “yes, things have improved, but not nearly enough to guarantee we shall see sustained and balanced growth”. And there’s still a way to go before we see such improvement………………………………………..Full Article: Source

2 Commodity ETFs Surging Double Digits in 1H

Posted on 29 June 2015 by VRS  |  Email |Print

After a dreadful 2014, broad commodities have continued to underperform this year too. This is especially true in the backdrop of a strong dollar, lower oil price and weak global fundamentals that have dampened the appeal for these commodities.
While the U.S. economy is improving, slowdown in the world’s largest consumer of raw materials - China - as well as sluggish growth in Europe, Japan and other emerging markets has added to the woes. Additionally, both the World Bank and the International Monetary Fund have lowered their global growth forecast for the next two years, putting further pressure on commodity prices………………………………………..Full Article: Source

The BIS on ETFs and bond market liquidity

Posted on 29 June 2015 by VRS  |  Email |Print

The latest BIS Annual Report, released on Sunday, cites numerous concerns about the unseen damage being caused to financial stability on account of ultra-low interest rates. Key among those concerns: how liquidity-guaranteeing ETFs in the bond sector may be contributing to a global liquidity illusion, disguising the true state of the ability to trade positions on the bond market — a topic very close to FT Alphaville’s heart.
As the report notes (our emphasis): Another key change in bond markets is that investors have increasingly relied on fixed income mutual funds and exchange-traded funds (ETFs) as sources of market liquidity. Bond funds have received $3 trillion of investor inflows globally since 2009, while the size of their total net assets reached $7.4 trillion at the end of April 2015……………………………………….Full Article: Source

How To Invest Your Money In The Second Half Of 2015

Posted on 29 June 2015 by VRS  |  Email |Print

The first half of 2015 is practically in the rearview mirror. SPDR Dow Jones Industrial Average ETF (DIA) added 1.8% year to date, through June 26. SPDR S&P 500 ETF (SPY) returned 3%. The tech-heavy PowerShares QQQ ETF (QQQ) jumped 6%.iShares MSCI EAFE ETF (EFA), tracking foreign-developed markets, rallied nearly 10%.
iShares MSCI Emerging Markets ETF (EEM) picked up 2.4%. How should you invest your money in the second half of the year? I asked a panel of six financial advisors to share their read on the stock market and best investment recommendations………………………………………..Full Article: Source

Currency brokers tighten trading rules on Greek fears

Posted on 29 June 2015 by VRS  |  Email |Print

Online currency trading platforms braced on Sunday for extreme market moves due to events around Greece, imposing higher margins on much trading of the euro and in some cases preventing traders taking up new speculative positions. Retail platforms FXPro, Mayzus, Alpari and U.S.-based FXCM were among those tweaking the terms of trade in a market that in theory trades all day every day but should only see volumes rise when Asian investors and traders return to their desks on Sunday evening.
“Depending on the severity of market conditions come Sunday night/Monday morning, we reserve the right to limit EUR trading to the closing of existing positions only,” FXPro said in a statement on its website on Saturday evening………………………………………..Full Article: Source

If Greece leaves the euro

Posted on 29 June 2015 by VRS  |  Email |Print

What happens once a country leaves the euro? On financial markets a new currency first needs a new currency code that can be identified by computers for trading and payments. They are issued by the Swiss-based International Standards Organisation, a worldwide federation of national standards.
It provides an alphabetic three-character code, with the first two letters representing the country and the third the name of the currency. In Greece’s case it could not go back to its old code for drachma, GRD, because there are still some outstanding payments to be made. It would require a new code, most likely GRN………………………………………..Full Article: Source

Australian climate policy paralysis has to end, business roundtable says

Posted on 29 June 2015 by VRS  |  Email |Print

An unprecedented alliance of business, welfare and environmental groups and trade unions is demanding an end to Australia’s decade of political paralysis and division on climate policy, insisting the Abbott government make credible emission reduction commitments and the major parties agree on how the pledges should be implemented.
In an attempt to reset the bitter political debate on climate policy, the powerful line-up of interest groups has reached a historic agreement on “principles” that should guide Australia’s climate policy. The principles do not explicitly mention the Abbott government’s Direct Action climate plan or the former Labor government’s emissions trading scheme, but they include objectives Direct Action fails to meet in its current form – including being “internationally linked”, being “capable of achieving deep reductions” and achieving greenhouse reductions “across all sections of the economy”………………………………………..Full Article: Source

Royal Dutch Shell bids to develop carbon capture project

Posted on 29 June 2015 by VRS  |  Email |Print

A windswept North Sea gas platform, manned by half a dozen maintenance workers, seems an unlikely place to embark on a low-carbon revolution. But Royal Dutch Shell’s disused Goldeneye, connected by a 100km pipeline to the Scottish coast, could soon get a fresh lease of life, pumping millions of tonnes of carbon dioxide into depleted reservoirs deep below the seabed.
The energy giant is competing for a £1bn pot of money from the UK government to develop what would be the world’s first carbon capture and storage (CCS) project involving a gas-fired power station at Peterhead, near Aberdeen………………………………………..Full Article: Source

Commodities Drop With a Dull Thud

Posted on 26 June 2015 by VRS  |  Email |Print

July looms but the dog days for commodities markets have arrived already. Investors in the likes of copper, oil, and grains are used to having a little action in their lives: a war here, a hurricane there. But while the world remains a dangerous place, commodities markets aren’t really feeling it.
Of the major raw materials, only crude oil and gasoline have registered gains so far this year. Everything else is down, underperforming the S&P 500. Even oil’s rally has lost momentum since April and merely reflects a little recovery from last year’s washout: Look back over one year and, like all major commodities, it is in negative territory………………………………………..Full Article: Source

OPEC petroleum exports fall below $1 trillion in 2014 on oil slump

Posted on 26 June 2015 by VRS  |  Email |Print

The value of OPEC members’ petroleum exports fell below $1 trillion in 2014 for the first time since 2010, according to its annual statistical report, illustrating the impact of last year’s slump in oil prices on the producer group.
The data includes some refined fuel and light oil condensate as well as crude oil. Exports from the Organization of the Petroleum Exporting Countries fell in value to $964.6 billion last year from $1.10 trillion in 2013, according to OPEC’s Annual Statistical Bulletin 2015 issued on Wednesday………………………………………..Full Article: Source

Iran Deal’s Sanction Plan Could Affect Oil Prices

Posted on 26 June 2015 by VRS  |  Email |Print

An Iranian nuclear deal could bring an influx of oil, but when and how sanctions are lifted could also affect prices. The deadline for a nuclear deal is June 30, which could lead to the lifting of sanctions on Iran. Oil is believed to make up 80% of Iran’s exports, and current sanctions have chopped those exports in half.
Iran could potentially add another 800,000 barrels of oil a day to the market within six to nine months, according to Robin Mills, an energy strategist for Manaar Energy. Even though the potential for pumping oil in Iran is strong, deal makers are pushing for sanctions to be lifted gradually instead of immediately………………………………………..Full Article: Source

Oil Tankers Are Filling Up and Raking It In

Posted on 26 June 2015 by VRS  |  Email |Print

The oil-tanker market is heating up, a development some analysts say is a warning flare that signals further price declines for crude. The Baltic Dirty Tanker Index, which tracks the rates to hire oil tankers plying 16 routes, has shot up 25% this month, as global oil output continues to grow. The index is now at its highest level since January 2014.
But an increasing number of these oil cargoes have nowhere to go. Oil producers and traders are rushing to lease tankers while they scramble to find buyers, effectively turning these ships into floating storage facilities. The oil-supply glut has worsened since the Organization of the Petroleum Exporting Countries earlier this month decided to maintain crude-output levels………………………………………..Full Article: Source

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