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Commodities Briefing - Archive | October, 2016

The cost of the Fed’s scare story on commodities

Posted on 31 October 2016 by VRS  |  Email |Print

John Dizard on the problems of banks not lending to a problematic asset class. Usually physical commodities prices increase at a faster rate towards the end of an economic expansion, and there is evidence that such a move has already begun. We have seen “surprise” increases in shipping rates, natural gas prices, cocoa, coal and iron ore.
What is different this time is the unwillingness of the large banks to increase their lending against commodities collateral. This is likely to lead to much greater volatility in commodities prices, and more frequent breaks in global supply chains. What should be modest price increases will turn into price spikes and even physical shortages……………………………………..Full Article: Source

The price of oil is heading up - should I invest, and how?

Posted on 31 October 2016 by VRS  |  Email |Print

After recovering from its recent lows, the price of oil should continue to rise, in the short term at least, experts say. A trend towards equilibrium in the continuing battle between supply and demand, and a rare agreement between the members of Opec, the oil cartel, are among the reasons.
The price of oil is notoriously difficult to project, and any prediction needs to be taken with a hefty dose of salt. However, there appear to be compelling arguments in favour of a continued recovery in the oil price and Telegraph Money has rounded up a selection, along with the opposite view……………………………………..Full Article: Source

OPEC, non-oil cartel members discuss production cuts

Posted on 31 October 2016 by VRS  |  Email |Print

Vienna, Austria- OPEC officials held talks with Russia and other non-cartel members Saturday in Vienna to debate how to implement a plan aimed at cutting oil output to reduce a global supply glut and bolster prices.
“The recovery process has taken far too long and we cannot risk delaying the adjustment any further,” said Sanusi Barkindo, the secretary general of the Organization of the Petroleum Exporting Countries, in his opening remarks……………………………………..Full Article: Source

Non-OPEC yet to pledge concrete oil output steps after meeting OPEC

Posted on 31 October 2016 by VRS  |  Email |Print

Non-OPEC producers made no specific commitment on Saturday to join the Organisation of the Petroleum Exporting Countries in limiting oil output levels to prop up prices - a stance that suggested they wanted OPEC to solve its differences first.
Officials and experts from OPEC countries and non-OPEC nations including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia met for consultations in Vienna on Saturday and only agreed to meet again in November before a scheduled regular OPEC meeting on Nov. 30, they said in a statement……………………………………..Full Article: Source

OPEC splits prevent deal with other producers to curb supply

Posted on 31 October 2016 by VRS  |  Email |Print

OPEC’s internal disagreements over how to implement oil-supply cuts agreed to last month prevented a deal to secure the cooperation of other major suppliers.More than 18 hours of talks over two days in Vienna yielded little more than a promise that the world’s largest oil producers would keep on talking.
Discussions will continue in late November, just days before the Organization of Petroleum Exporting Countries is supposed to finalize the accord that lifted oil prices to one-year highs………………………………………..Full Article: Source

The new gold rush

Posted on 31 October 2016 by VRS  |  Email |Print

Why new? Because this time around, it’s not buyers of jewellery but gold investors who are calling the shots. One question that gold investors are asking now is, will 2017 be as spectacular for the yellow metal as 2016? The short answer to this is no.
The short-term outlook for gold is grim, with the Federal Reserve likely to effect the second rate hike in December, with falling consumption demand for gold in Asian markets and the strength in dollar due to weakness in the British pound. Also, recent presidential poll statistics in the US are not in favour of a Donald Trump win; a negative for gold bulls. Policy uncertainty and slowing growth following a Trump win could stoke the yellow metal’s price……………………………………..Full Article: Source

Why So Many Gold And Silver Price Forecasts Are Wrong

Posted on 31 October 2016 by VRS  |  Email |Print

Precious metals investors are being misled by most analysts’ price forecasts because they do not understand the critical underlying fundamental value mechanism. Furthermore, there seems to be a great deal of animosity from the short-term trading analysts who view many in the precious metals community as pandering hype and conspiracies.
There’s no coincidence that the value of oil and gold jumped 500+% from 2000-2012. While the silver price jumped seven times from $4.95 in 2000, to $35 in 2012, its current price is 3.5 times higher than 2000 and gold is 4.5 times higher……………………………………..Full Article: Source

Russia’s Gold Holdings Have Tripled Since 2006

Posted on 31 October 2016 by VRS  |  Email |Print

With all eyes on Russia’s unveiling their latest nuclear intercontinental ballistic missile (ICBM), which NATO has dubbed the “SATAN” missile, as tensions with the U.S. increase, Moscow’s most potent “weapon” may be something drastically different.
The rapidly evolving geopolitical “weapon” brandished by Russia is an ever increasing stockpile of gold, as well as Russia’s native currency, the ruble. Take a look at the symbol below, as it could soon come to change the entire hierarchy of the international order – potentially ushering in a complete international paradigm shift – and much sooner than you might think……………………………………..Full Article: Source

Iron ore price leaps to six-month high

Posted on 31 October 2016 by VRS  |  Email |Print

The iron ore price has jumped to a six-month high, seemingly defying gravity amid fresh analyst calls for the commodity to drop back below the $US50 level. Iron ore rose 1.3 per cent to $US63.10 a tonne in the most recent session, according to The Steel Index, from $US62.30 the previous day.
The commodity is at its highest point since April 29, when it settled at $US65.20. Despite taking a breather late last week, iron ore has been rallying recently, falling only once in the last 15 sessions……………………………………..Full Article: Source

The ailing financial superpowers of Dr Copper

Posted on 31 October 2016 by VRS  |  Email |Print

Our round-up of the week’s best comment and analysis from the Financial Times focuses on the ailing powers of “Dr Copper”, a 19th century re-run for bond markets and anti-globalisation trends battering the Mexican peso and City of London. Copper got its nickname in the early 1980s as an accurate forecaster of US recessions and this reputation was enhanced as China became the world’s biggest consumer of the red metal.
“Is Dr Copper sick? Despite Beijing trying to turbocharge the economy with credit, the copper price is only up about 5 per cent [this year] to $4,700 a tonne, even though it is widely used in construction and property……………………………………..Full Article: Source

Coal price rally comes to the rescue of commodity trading giants

Posted on 31 October 2016 by VRS  |  Email |Print

An unprecedented surge in coal prices in the past few months to more than double their June levels is a big fillip for Glencore and Noble, who are among the biggest traders of thermal coal, which is used to produce electricity.
They are taking advantage of their mine production, storage facilities and shipping fleets to provide users of coal with cargoes at short notice and at premium prices, sources familiar with recent deals told Reuters. They are also striking longer-term supply deals, also on rich terms, the sources said…………………………………..Full Article: Source

October’s record for M&A is a boon for merger-themed ETF

Posted on 31 October 2016 by VRS  |  Email |Print

The U.S. deal market is red-hot right now, and that could mean an uptick in interest for the exchange-traded funds that attempt to capitalize on merger mania. Thus far in October, there have been $248.9 billion in announced corporate tie-ups, according to Dealogic, a figure representing the highest U.S. merger-and-acquisition total value ever in October, excluding spin-offs.
For the year-to-date period, $1.32 trillion has been announced in U.S. M&A, compared with $1.99 trillion during the same stretch in 2015. Companies have been using acquisitions as a way to expand at a time when organic growth remains hard to come by. Other factors, including high levels of cash on hand and low interest rates—which makes for easier deal financing—have also contributed to the activity……………………………………..Full Article: Source

Commodity ETFs Pose a Challenge

Posted on 31 October 2016 by VRS  |  Email |Print

The logic for owning commodities is simple: They offer diversification to holdings of traditional stocks and bonds. Plus, investing in assets like sugar, heating oil, and livestock is made much easier via commodity exchange-traded funds, which are both liquid and inexpensive.
Diversification has its downside, of course: Of the more than 90 exchange-traded commodity funds tracked by Morningstar, all have negative five-year trailing results. Also, while the logic for owning them may seem simple, the execution often is not……………………………………..Full Article: Source

Money managers cut gold bets as ETF holdings soar to 3-year high

Posted on 31 October 2016 by VRS  |  Email |Print

Money managers and other large speculators are bailing as the rally that took futures to its best first half in almost four decades falters. They cut net-long positions the past two weeks by the most in data going back a decade. Investors in ETFs are taking the long view, pouring $605 million over the past week into funds backed by precious metals and helping keep holdings in gold ETFs tracked by Bloomberg at the highest since 2013.
Gold futures have fallen almost 5 per cent since the end of June as speculation that US interest rates will soon rise curbs the appeal of precious metals, which don’t pay interest……………………………………..Full Article: Source

How Do Currency Shifts Affect International Investments?

Posted on 31 October 2016 by VRS  |  Email |Print

International investing comes with its fair share of unique challenges, prominent among them, exchange rate fluctuations. While exposure to global currencies provides diversification, it can also affect considerations such as dividend payments.
In this clip from The Motley Fool’s Industry Focus: Healthcare podcast, healthcare analyst Kristine Harjes and Fool Funds portfolio manager Charly Travers discuss how investors should approach currency issues when investing globally……………………………………..Full Article: Source

Commodities rally fails to fire up the Aussie dollar

Posted on 31 October 2016 by VRS  |  Email |Print

Australia’s key commodity exports, iron ore and coal, have been on a spectacular rally over the past weeks, yet the dollar is stuck below US77¢ as larger forces hold back the currency.
Since early August, the Aussie has made about a dozen attempts to jump the US77¢-level – the latest last week following a strong headline inflation number – only to be knocked back immediately…………………………………..Full Article: Source

How green bonds could speed progress towards Paris goals

Posted on 31 October 2016 by VRS  |  Email |Print

With the challenges for the Paris Agreement having shifted from ratification to implementation, increased attention is being directed to financial assistance to developing countries to help them achieve their commitments under the Agreement. In this context, there are high expectations for the contribution green bonds can make. This is logical and welcome.
Yet, the link between the Paris Agreement and green bonds can be well established only when a missing link is provided. Central to the Agreement are countries’ Nationally Determined Contributions (NDCs)……………………………………..Full Article: Source

China’s contribution to world economic growth to stay near 30%

Posted on 31 October 2016 by VRS  |  Email |Print

The transition of China’s economy will become an important driver of world economic growth, according to Chi Fulin, director of the China Institute for Reform and Development. Addressing the China reform forum that opened on Saturday, Chi said the contribution of China to the world economy will remain at about 30 percent for the next five years.
He forecast that in the next few years, the global economy will grow slowly while seeking a new balance, which will have an impact on the transition of China’s economy. On the other hand, as the second-largest economy, China’s transition and growth is increasingly influencing the world economy……………………………………..Full Article: Source

Now is the time to add commodities to your portfolio

Posted on 28 October 2016 by VRS  |  Email |Print

With commodities currently sitting at or near multiyear lows, now may be a good time for investors to take advantage of lower prices and gain exposure.
Commodities — such as precious metals, including gold and silver; industrial materials, such as iron ore and copper; and agricultural products, such as wheat and pork bellies — can offer strong diversification benefits to an investment portfolio. It’s essential that investors look at the overall market factors that could make now a good time to add commodities to their portfolio……………………………………Full Article: Source

Oil price recovers $50 level on Venezuela unrest

Posted on 28 October 2016 by VRS  |  Email |Print

International oil price benchmark Brent crude fell below $50 a barrel for the first time in three weeks yesterday following news that the likes of Iraq, Nigeria and Libya may opt out of an Opec agreement to cut production.
Apparent dissent in the ranks is adding to fears the deal, which is seen as an essential help to rebalance an oversupplied market, will never be fully agreed. Nevertheless, Brent crude returned to a shade above $50 as prices rebounded last night and this morning, in part because of building unrest in Opec member state Venezuela, which has seen “escalating protests… against the rule of President Nicolas Maduro”, says Reuters……………………………………Full Article: Source

Winners and losers emerge from the oil price slump

Posted on 28 October 2016 by VRS  |  Email |Print

Opec takes a bigger share of the market but that effort comes at a cost. Opec’s decision to push for production cuts last month has led many to declare the US shale oil industry as the biggest winner from a two-year price war.
The wildcatters of the US shale patch successfully cut costs and consolidated operations to weather the storm of $40 oil, leaving behind a leaner more resilient industry that should benefit as prices recover……………………………………Full Article: Source

Big oil companies are about to gush red — here’s why analysts aren’t panicking

Posted on 28 October 2016 by VRS  |  Email |Print

Wall Street is expecting to see improvement in quarterly earnings as oil majors begin reporting this week after many of the world’s biggest energy companies missed forecasts in the second quarter.
The last round was indeed a dramatic one. Exxon Mobil fell far short of forecasts due to weakening refining operations, while its smaller peer Chevron surprised investors with a loss of $1.5 billion as it booked $2.8 billion in impairments. Royal Dutch Shell whiffed on earnings forecasts to the tune of about $1 billion. BP reported a $2.25 billion net loss as costs related to the Deepwater Horizon oil spill continued to bite……………………………………Full Article: Source

Russia buys its way into India’s oil market

Posted on 28 October 2016 by VRS  |  Email |Print

India After two years of struggling under low crude prices and Western sanctions, Russia has made a major conquest, securing a sizable portion of India’s oil market.
A consortium led by Russia’s state-owned Rosneft on Oct. 15 announced it would acquire 98% of India’s Essar Oil for over $10 billion. The deal with the debt-laden Essar group is structured to limit Rosneft’s stake to 49%, circumventing the sanctions brought on by the Ukraine conflict. The other 49% will be held by Kesani Enterprises, which is owned by Switzerland-headquartered commodity trader Trafigura, and United Capital Partners, a Moscow-based private investment company……………………………………Full Article: Source

Iraq Seeks Exemption from OPEC Production Deal on Islamic State War

Posted on 28 October 2016 by VRS  |  Email |Print

Iraq is arguing that its intensifying war against Islamic State won’t allow it to reduce output along with other OPEC members, threatening to derail the landmark agreement.
The Persian Gulf country is pushing for an exemption from an Organization of the Petroleum Exporting Countries pact reached in September that would cut output between 1% and 2% to make oil more scarce globally and shake prices out of a two-year slump……………………………………Full Article: Source

OPEC Output Cut May Not Drain Supply

Posted on 28 October 2016 by VRS  |  Email |Print

Oil is trading at a three-week low on concerns that OPEC is unable to make the kind of progress it needs to come to a consensus and to a tangible agreement from Vienna in late November.
Bloomberg analysis shows that even if OPEC cuts, it still might not be enough to drain the surplus. Bloomberg’s Wael Mahdi reports on “Bloomberg Markets: Middle East.”…………………………………..Full Article: Source

Physical gold market in largest surplus in a decade

Posted on 28 October 2016 by VRS  |  Email |Print

Gold continued to tread water on Thursday, trading at $1,270 an ounce in early morning trade in New York. The gold price has been on the defensive since the start of October when it crashed through the $1,300 an ounce level and is now down more than 8% from two-year highs reached in July.
A new report by the GFMS team at Thomson Reuters makes it clear what has been behind recent weakness with third quarter data showing the global gold market jumping to a surplus of 250 tonnes, the largest quarterly surplus since the final quarter of 2005……………………………………Full Article: Source

Gold demand slumps in third quarter; U.S. election looms: GFMS

Posted on 28 October 2016 by VRS  |  Email |Print

Physical gold demand slumped by nearly a third in the three months to September, GFMS analysts at Thomson Reuters said on Thursday, as a rally in prices curbed jewelry buying in the key Chinese and Indian markets.
The net surplus in the gold market was at its highest since 2005, it said, as demand for gold-backed exchange-traded funds also weakened. Prices are expected to stabilize into the year-end, GFMS said, bottoming out at $1,240 an ounce. Next year it forecasts gold prices will average $1,420……………………………………Full Article: Source

This Is Gold’s Turnaround Year - Aden Sisters (Video)

Posted on 28 October 2016 by VRS  |  Email |Print

Gold prices are up more than 19% so far this year, but there may be more to come, this according to two veteran investors Mary-Anne & Pamela Aden — known in the industry as the Aden Sisters.
Speaking with Kitco News, the Adens said they think 2017 will be the “turnaround year” for the gold sector. “We think this is a great buying time,” they told Daniela Cambone on the sidelines of the New Orleans Investment Conference……………………………………Full Article: Source

Dhanteras: Declining gold imports is making yellow metal an attractive investment

Posted on 28 October 2016 by VRS  |  Email |Print

Gold enthusiasts go to the extent of advising that one should make investment in gold on the eve of Dhanteras every year a la Systematic Investment Plan (SIP) of mutual funds. SIP over a long period of time evens out the gyrations in the stock market given the reality of averaging and booms and bottoms so that the investor doesn’t have to do the near impossible task of timing the market.
In this light the parallel drawn between SIP in stocks and annual Dhanteras eve investments in gold does sound pragmatic—you keep up with your religious beliefs while at the same time investing for the rainy day. Indeed gold can be one’s rain check given its scarcity value……………………………………Full Article: Source

Trump victory could push gold to $1 500/oz, physical demand ‘pitiful’

Posted on 28 October 2016 by VRS  |  Email |Print

Physical demand for gold remained at “pitiful levels” for the third successive quarter, down 30% year-on-year in the three months to September 30, hindered by sharply higher prices in the aftermath of the British referendum to leave the UK (Brexit), reports markets analyst Thomson Reuters GFMS.
Nevertheless, the firm’s latest gold survey shows that multiyear price highs have helped to send scrap flows up by a fifth, thereby taking total supply to a level that matches the highest quarterly amount, last recorded in the fourth quarter of 2012……………………………………Full Article: Source

Metals Surge on Improving Demand

Posted on 28 October 2016 by VRS  |  Email |Print

Aluminum in Shanghai jumped to its highest level in almost two years, extending a rebound on speculation that transport bottlenecks may have created a shortage for some users in China. Prestige Economics Chief Economist Jason Schenker discusses the outlook for metals on “Bloomberg Markets: Middle East.”.………………………………….Full Article: Source

Dr Copper’s ability to take China’s temperature is limited

Posted on 28 October 2016 by VRS  |  Email |Print

Using metal as a reliable indicator of the country’s economy is a fraught exercise. Is Dr Copper sick? The metal first won its reputation — and nickname — in the early 1980s as an accurate forecaster of US recessions.
It swooned ahead of the downturn that hit the US in 1981, according to John LaForge, head of real asset strategy at the Wells Fargo Investment Institute. “At the time the US was very manufacturing-driven, so everyone kind of linked the two,” he says……………………………………Full Article: Source

Is The Bear Market Over For Uranium? (Video)

Posted on 28 October 2016 by VRS  |  Email |Print

Uranium has been under pressure, currently trading at 12-year lows, but one executive in the sector thinks the bear market may be coming to an end.
Speaking with Kitco News on the sidelines of the New Orleans Investment Conference, Uranium Energy CEO Amir Adnani says he sees a lot of similarities in the uranium space as he did in 2004, before prices rallied. ‘I think the picture today is set up a lot more in a bullish way and reminds me a lot more of 2004.’…………………………………..Full Article: Source

Silver ETFs May Outshine Gold Again In 2017

Posted on 28 October 2016 by VRS  |  Email |Print

Silver slid out of gold’s shadow in 2016 on the way to impressive gains. Some ETF investors want to know if this is still a good time to invest in precious metals or if the moment has slipped quite away.
Both gold and silver are likely to rally again after coming well off their peaks, with the white metal holding more potential upside in 2017, according to ETF Securities. The $22 billion firm offers a suite of five exchange traded funds investing in gold, silver and diversified precious metals……………………………………Full Article: Source

Chinese ETFs: All Things Considered

Posted on 28 October 2016 by VRS  |  Email |Print

China has risen to the second-largest economy and the second-largest capital market after the U.S. for some time. How much can U.S.-based investors participate in the economic and capital market growth via China-related ETFs?
We set out to examine many aspects of the Chinese ETFs in the marketplace. How many Chinese ETFs do U.S. investors have access to in the U.S.? What kind of investment exposures do they provide? Who are the major players as issuers? What are the trends for fund flows this year? What is the state of fixed-income Chinese ETFs?…………………………………..Full Article: Source

Mergers & Acquisitions Surge; M&A Funds Flat

Posted on 28 October 2016 by VRS  |  Email |Print

There’s been another wave of headline-making mergers and acquisitions this year following a hot year for deals in 2015, the latest of which was the blockbuster $85 billion AT&T-Time Warner deal announced this week.
If you are an ETF investor, does a pickup in M&A activity offer you any investment opportunity? In theory, yes. There are two ETFs in the market today that look to capitalize specifically on these types of corporate deals through long/short hedge-fundlike portfolios……………………………………Full Article: Source

China Steps Up Yuan Rhetoric as Currency Falls to Six-Year Low

Posted on 28 October 2016 by VRS  |  Email |Print

Chinese officials and state-run media stepped up efforts to curb yuan depreciation concerns, talking up the currency as it traded near the weakest level in six years.
The exchange rate isn’t likely to drop much more because a rally in the dollar is close to an end, according to a report Thursday in the Financial News, a central bank publication. The article follows comments from People’s Bank of China Deputy Governor Yi Gang that the nation will keep the exchange rate stable and that there’s no basis for persistent declines……………………………………Full Article: Source

Saudi Arabia Drops Egyptian Pound From Exchange Markets As Currency Rapidly Depreciates

Posted on 28 October 2016 by VRS  |  Email |Print

Saudi Arabia’s currency exchange outlets have dropped the Egyptian pound following the currency’s sharp decline in value in recent months, Saudi media reported Thursday.
The decision to halt trading of the pound was made by currency agencies. The Saudi government and commercial banks “are more concerned with the needs of their clients” and “only deal in major global currencies,” Talaat Hafiz, secretary-general of the media and banking awareness committee, told the Saudi Gazette……………………………………Full Article: Source

BlackRock calls for higher carbon price to tackle climate change

Posted on 28 October 2016 by VRS  |  Email |Print

Fund house says companies should pay more for the pollution they generate. BlackRock has called on governments globally to make businesses pay a higher price for the pollution they generate, in a move aimed at forcing companies to reduce their carbon emissions.
The world’s largest fund house, which manages $4.9tn for investors, said it is struggling to understand the climate change risks it faces when making investment decisions because the price companies have to pay for emitting carbon is inconsistent……………………………………Full Article: Source

Global uncertainty about economic policy is at record highs

Posted on 28 October 2016 by VRS  |  Email |Print

Newspaper indexes show that the unstable politics and economic climate continue to slow down global consumption and investments. As the U.K. responds to voters’ rejection of the European Union, the U.S. presidential election comes to a head and other disputes play out across the globe, uncertainty is at a record high in 2016, according to a new index that tracks newspaper articles in over a dozen countries.
The index is a measure of economic sentiment that rises and falls with major events like the 9/11 attacks and the 2009 global financial crisis……………………………………Full Article: Source

Commodity traders must go digital or face extinction

Posted on 27 October 2016 by VRS  |  Email |Print

As commodity margins flat-line, the number of traders will shrink as existing trading firms consolidate and digital rivals emerge, U.S. consultancy Oliver Wyman said in its annual commodity trading report.
With the exception of oil and natural gas boosted by volatility last year, growth across commodities is plateauing with combined margins stuck at around US$44 billion per year in 2014 and 2015, the report said. Wyman sees digitization as the game-changer in the next few years that will force independent traders such as Glencore, Trafigura and Vitol, as well as the trading arms at integrated oil companies like Shell and BP, to become ever more nimble and automate many of their activities………………………………….Full Article: Source

Commodity slump stalls global trade growth: Kemp

Posted on 27 October 2016 by VRS  |  Email |Print

World trade growth has ground to a halt as the commodity price slump hits economic growth in emerging markets and with it their demand for imported industrial equipment, supplies and consumer goods.
World trade volumes were unchanged between June and August compared with the same period in 2015, according to the Netherlands Bureau of Economic Policy Analysis (CPB). Growth in volumes has been unusually weak since 2012 but the recent slowdown has pushed growth down to zero…………………………………Full Article: Source

India’s Crude Oil Imports Hit Record: How Will It Affect Oil Market?

Posted on 27 October 2016 by VRS  |  Email |Print

A Reuters survey reported that India’s crude oil imports rose 17.7% to 4.5 MMbpd (million barrels per day) in September 2016 compared to the same period in 2015. September imports were at their highest level since April 2009. A rise in domestic demand led to the rise in crude oil imports.
India’s oil ministry expects India’s crude oil demand to rise 11% in 2016 compared to 2015. This would be driven by better economic growth and favorable monsoon rains. Market research company Energy Aspects estimates that crude oil consumption in India will rise by 400,000 barrels per day in 2016 and 2017………………………………….Full Article: Source

Russia May Consider Oil Production Cut – Envoy to OPEC

Posted on 27 October 2016 by VRS  |  Email |Print

Russian Permanent Representative to the International Organizations in Vienna stated that at this stage of talks on oil market stabilization Russia considers reasonable production freeze, but during the negotiations process Moscow may change its stance and discuss a production cut.
At this stage of talks on oil market stabilization Russia considers reasonable production freeze, but during the negotiations process Moscow may change its stance and discuss a production cut, Russian Permanent Representative to the International Organizations in Vienna Vladimir Voronkov said…………………………………Full Article: Source

OPEC is back in business, and the market is sceptical: Kemp

Posted on 27 October 2016 by VRS  |  Email |Print

OPEC’s output accord in Algiers last month was initially greeted with enthusiasm by oil market bulls but much of that euphoria is now dissipating as traders question whether it will make an actual difference.
The agreement, coming after many observers had written off the possibility of a deal, initially pushed crude prices sharply higher. Flat prices and timespreads firmed as traders concluded the accord would accelerate the rebalancing of supply and demand…………………………………Full Article: Source

Gold Falls As Concerns About Rising Interest Rates Weigh on Demand

Posted on 27 October 2016 by VRS  |  Email |Print

Expectations of tightening monetary policy tend to be bearish for gold. The metal doesn’t pay interest and struggles to compete with other investments when rates rise.
The precious metal was also hurt by a strengthening U.S. currency, which makes dollar-denominated gold more expensive for foreign investors. The WSJ Dollar Index, which weighs the dollar against a basket of other currencies, was recently up 0.1%………………………………….Full Article: Source

Gold firm on strong festive demand in India

Posted on 27 October 2016 by VRS  |  Email |Print

Gold prices stayed firm on Wednesday as stronger physical demand for the precious metal, ahead of India’s late-October festival season, offset a steady U.S. dollar. Demand for bullion is expected to pick up ahead of festivals such as Dhanteras and Diwali, which is also a time when gold is traditionally given as a gift.
“A recovery in physical demand provided the foundation for the rally that carried over into later trading,” HSBC analyst James Steel said in a note. “Gold investors brushed aside the negative impact on bullion of a firmer USD.”…………………………………Full Article: Source

Gold Price Action

Posted on 27 October 2016 by VRS  |  Email |Print

According to analysts from Templeton Emerging Markets Group, by year-end the gold price action will rise by 15 percent. Federal Reserve will raise rates very slowly and the upward pressure on the US dollar will extinguish quickly.
The Fed will raise the rate slightly and will not rush to further action. In addition, there is no guarantee that a slight tightening of monetary policy will change the mood in the market. Much will depend on the real rates………………………………….Full Article: Source

Where next for gold?

Posted on 27 October 2016 by VRS  |  Email |Print

Will the move in US interest rates trigger a reversal for gold – not so says Simona Gambarini. The price of gold has increased sharply this year, but speculation about US interest rates has prompted suggestions that this upward trajectory will move into reverse. Not so, says Simona Gambarini, commodities analyst at leading economics research consultancy Capital Economics.
The gold price has risen close to 20% this year in US dollar terms, despite subdued buying from consumers in China and India, as well as emerging market central banks. In part, this reflects changing perspectives on US interest rates earlier this year………………………………….Full Article: Source

Silver Has More Potential Than Gold In 2017

Posted on 27 October 2016 by VRS  |  Email |Print

While expecting gold prices to rally to $1,400 an ounce in 2017 on continued investor demand, ETF Securities looks for silver to outperform as industrial demand drives prices. In a recently published report, analysts at ETF Securities said that they see silver prices trading in a range of between $22 and $24 an ounce in 2017.
With silver prices last trading Wednesday at $17.70 an ounce, that would mean at least a 24% gain for the precious metal. ETF Securities’ gold-price target of between $1,400 an ounce and $1,450 would represent a gain of 10% from the precious metal’s current price of $1,272.60 an ounce………………………………….Full Article: Source

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