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Commodities Briefing 30.Nov 2010

Posted on 30 November 2010 by VRS |  Email |Print

From Bloomberg: Europe’s sovereign-debt crisis poses little threat to rising commodity prices unless the situation deteriorates, Barclays Capital said. “The southern European sovereign-debt crisis would have to take a severe turn for the worse to derail a commodity-price uptrend,” analysts Kevin Norrish and Roxana Mohammadian Molina said.
“The latest events repeat a pattern seen several times this year where commodities fell prey to macroeconomic and financial market problems left over from the credit crisis, only to recover robustly.”………………………………………Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Wyattresearch.com: Ireland will never be able to afford to pay back the debt it owes. Its debt problems are but a microcosm of much of the rest of the western world. What is playing out in Ireland today will one day soon play out here across the pond in the United States.
So we should pay close attention, because for reasons I will reveal below, the scenario is hugely bullish for commodities of nearly every stripe. To sum up Ireland’s problems, it recently received a bailout from its chums in the European Union so that the country would avoid default on the many and sundry debt obligations already under its belt……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Commodityonline.com: Should you invest in commodities if there is war between South and North Korea? Will your commodities investment pay rich dividends if there is no war between the Korean countries? Global commodities guru and ace investment expert Jim Rogers says commodities are the best place you should put your money, even if there is a war or not in Korea.
Rogers, who is presently the chairman of Rogers Holdings, said: “In my view, the thing to invest in is commodities because if there is going to be war, it is always good for commodities and if there is no war, then commodities will rally like everything else.”………………………………………Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Resourceinvestor.com: Surging demand from China, the world’s second-largest gold buyer, is changing seasonal patterns in gold price trends for investors everywhere. At this current pace, private Chinese demand may overtake India’s by 2014 (if not sooner), giving the world’s two most populous nations two ounces of gold in every five sold worldwide that year. But already, this further eastwards shift is showing in global gold prices.
Coinciding with the post-harvest wedding and festival season, Indian demand typically peaks with Diwali (the Hindu “festival of lights”) in early November……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Mineweb.co.za: The price is of course always subject to fluctuation and correction, and quite possibly some sizeable moves, but for now at least any such correction is likely to find the physical buyers coming out in droves and giving the price some support. For the longer, term, however, much higher prices will depend on the weight of money coming in from the investor and there will come a point when inflationary interest rate expectations.
We must all know that gold hit record levels in dollar terms in early November and that since then it has staged a sharp and much-needed correction. In fact as we approach December, gold looks very close to completing a head-and-shoulders formation and that puts it at risk of dropping by another hundred dollars. ………………………………………Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Commodityonline.com: Silver prices ended lower tracking weakness in base metal prices. Silver prices also traded lower due to heavy offloading by stockists and speculators tracking global weakness. Silver is closing this week at 40855.
The metal officially remains in a bull trend with the three month trend line in at 39200. This week the metal failed at 42200 before reversing back into the range. Considering the recent range of 39000 to 43000, we should see further consolidation……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Commodities-now.com: The tightness that has emerged in the copper market is the last few months is expected to remain in place for much of the next three years, fuelling a rally through a series of all time highs and a peak well above $11,000/tonne in 2013. These are the principal conclusions of the November edition of GFMS’ Quarterly Three-Year Copper Forecast, which the consultancy published last week.
The report suggests that the noteworthy deficits the market has seen recently will push the overall market balance for this year into negative territory. The positive backdrop for the red metal is expected to be briefly disturbed by an economic slowdown in the first half of 2011, for which GFMS forecast a brief return to a modest surplus……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Resourceinvestor.com: Gold shrugged off gains in the US dollar last week to rise, though the metal lost a bit of momentum on Friday. Tensions in Korea and European contagion fears have led to general safe haven buying in the metal, but as we pointed out last week, perhaps the biggest supporting factor for gold has been the explosive gains in silver. As silver fell notably on Friday, gold followed suit.
Just a few months ago we would have said unequivocally that gold is the driver of the precious metals complex, but that is not necessarily the case any longer. To the extent investment capital continues to flow so dramatically into silver, we would expect it to have a significant pull on the much larger gold market……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Proactiveinvestors.com.au: In what has been something of a recurring pattern this year, commodity markets in recent weeks have again been hit by broader financial and economic worries. But as Barclays Capital notes, this time it has come when the commodities sector is being boosted by both a second round of quantitative easing (QE2) and strong underlying commodity demand trends and US economic indicators.
This leads Barclays to suggest the re-emergence of sovereign debt issues in Europe would have to take a severe turn for the worse to upset the current commodity price uptrend……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

The Middle East is set to become a big player in the metals and mining industry in terms of production and investment opportunity, according to a new report by Deloitte, Forging a new path: Opportunities for Latin American metals and mining companies to consider in the Asia-Pacific region.
The emerging economies in the Middle East are taking advantage of the income provided by oil to invest in the steel industry, not only as a means to supply the domestic infrastructure and construction demands, but also as a way to diversify national economies and make them less dependent on oil……………………………………….Full Press Release: Source

Posted on 30 November 2010 by VRS |  Email |Print

From AFP: The international oil market is more balanced than at any time in half a decade and crude prices are likely to remain relatively stable, a top Kuwaiti oil executive said on Monday.
“From an economic standpoint, the oil market today is more balanced than at any time over the past five years,” CEO of Kuwait Petroleum Corp. (KPC), the national oil conglomerate, Faruk al-Zanki told a two-day conference……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Reuters: OPEC reduced supplies of crude oil a little in November as damage to a pipeline disrupted Nigerian exports and several other oil producers trimmed deliveries, a Reuters survey showed on Monday.
Supply from the 11 members of the Organization of the Petroleum Exporting Countries with output targets, all except Iraq, has averaged 26.70 million barrels per day (bpd) this month, down from 26.79 million bpd in October, according to the survey of oil companies, OPEC officials and analysts……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Bloomberg: Traders betting on rising oil prices may close their positions through the end of the year as crude’s decline from almost $90 a barrel prompts them to sell contracts, Barclays Capital said.
While investors may continue to liquidate bets, U.S. demand is likely to prevent that from causing prices to drop as much as they did in August amid a similar sell-off, according to a report today by Kevin Norrish and Roxana Mohammadian Molina, London-based analysts at Barclays……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Smh.com.au: Oil prices rose on Monday after the European Union agreed on a bailout plan for Ireland, which offset some concern that a financial crisis could surface in Portugal and Spain.
Benchmark crude for January delivery was up $1.84 to $US85.60 a barrel in mid-afternoon trading on the New York Mercantile Exchange. In London, Brent crude added 68 cents to $US86.24 a barrel on the ICE Futures exchange……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Bloomberg: Hedge funds increased bullish bets on natural gas to the highest level in four months on speculation that lower-than-normal temperatures will bolster heating demand and trigger withdrawals from record stockpiles.
The funds and other large speculators increased so-called net-long positions, or wagers on rising prices, by 50 percent in the seven days ended Nov. 23, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Platts: Failure to reach a binding post-Kyoto agreement on emissions reduction in Copenhagen means it will cost $1 trillion more than was estimated last year to cut CO2 emissions enough to keep the world’s temperature from rising more than two degrees Celsius, the International Energy Agency said in its World Energy Outlook 2010 report released Monday.
The “modest” pledges made in Copenhagen for emissions cuts “undoubtedly make it less likely that the two-degree goal will actually be achieved. Reaching that goal would require a phenomenal policy push by governments around the world,” the report said……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Oilprice.com: The European Commission said on Monday a proposal to limit the use of some carbon credits from industrial gas projects in its emissions trading scheme might be unveiled during a United Nations climate summit in Mexico next week. The European Union Emissions Trading Scheme is the largest multi-national emissions trading scheme in the world.
The trading Scheme currently covers more than 10,000 installations with a net heat excess of 20 MW in the energy and industrial sectors which are collectively responsible for close to half of the EU’s emissions of CO2 and 40% of its total greenhouse gas emissions……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Seekingalpha.com: For the larger part of this year, commodity ETFs were soaring. Then recently, they had their wings clipped. Was the correction the beginning of the end, or a pause for breath for more?
In the recent correction, commodities fell an average of about 8%. We think that given the fundamentals and the fact that commodities remain above their long-term trend lines, a case can be made that the commodities rally isn’t cooling……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Indexuniverse.com: United States Commodity Funds, deepening its indexing relationship with SummerHaven Investment Management, filed with securities regulators to register three new contango-controlling ETFs, one based on a mix of precious and industrial metals, one based on copper and the other based on agricultural products.
The new offerings build on its United States Commodity Index Fund, an ETF launched in summer. ………………………………………Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Sovereignsociety.com: The ongoing bull market in raw materials continues to drain the total returns generated by some ETFs, or exchange-traded-funds, tied to the complex.
Increasingly, the most cost-efficient way to participate in commodities is to buy and hold natural resource equities, not the underlying commodity future; though commodity futures provide a higher degree of correlation to the secular trend underway since 2002, contango is causing all sorts of price distortions and diluting the returns of some products……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Washingtonpost.com: The Commodity Futures Trading Commission (CFTC) is poised to become a leading example of how financial regulators should protect markets and the public. We are undertaking a massive effort to modernize our regulatory scheme, including incorporating advances in technology to help us ensure efficient and competitive markets.
It only makes sense that we take stock of which processes and programs help us meet our mission and which do not, and whether there are better options……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Money: It’s not just scaremongering: the euro is in real danger of failing or being broken up into separate currencies. Two down, 14 to go. Ireland and Greece have been bailed out by European taxpayers - and Portugal looks like it could be the next of the 16 eurozone members to topple.
And while Portugal is a casualty the rest of Europe can afford, the next in line - Spain - is too big to bail out (it’s bigger than the first three combined). Beyond that, pundits are already talking of Belgium, Italy and even France running into trouble………………………………………Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From WSJ: Currencies in emerging Europe came under pressure Monday as news of the €85 billion ($112.6 billion) bailout package for Ireland weighed on sentiment amid growing concerns that other peripheral member states may also need external assistance.
The Polish zloty hit a four-month low against the euro, while the Hungarian forint also weakened as financial markets continued to fret about contagion to other fiscally weak euro-zone members, namely Portugal and Spain……………………………………….Full Article: Source

Posted on 30 November 2010 by VRS |  Email |Print

From Hardassetsinvestor.com: Global supplies of sugar are projected to lag worldwide demand this year for the third year running. According to a new report by Czarnikow Group, a London-based sugar and biofuel broker, the supply/demand deficit could run as high as 2.8 million metric tons from September 2010 to September 2011.
Of course, when you consider that total supply for 2010/11 is expected to rise to 168.4 million tons from last year’s 157.4 million, that deficit doesn’t seem like a huge gap. And generally, if sugar becomes too expensive to use, end-consumers can just switch to cheaper sweeteners, like corn-based syrups……………………………………….Full Article: Source

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