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Commodities Briefing 05.Sep 2011

Posted on 05 September 2011 by VRS |  Email |Print

Global economic indicators have weakened in the first half of this year. The reasons include the effects of higher commodity prices on consumer purchasing power, supply chain disruptions in the wake of the Fukushima nuclear accident and a tightening of monetary conditions in parts of Europe.
Equity markets have now begun to price in a renewed global recession too. Investors have radically reduced risk in their portfolios and are moving to low risk assets like US treasuries, German bonds and gold……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

James DaileyFunds increased bullish bets on agricultural commodities by the most in more than a year on signs of tightening supplies amid adverse weather conditions.
In the week ended Aug. 30, speculators raised their net- long positions in 11 commodities by 18 percent to 915,341 futures and options contracts, government data compiled by Bloomberg show. That was the biggest gain since Aug. 3, 2010……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Gold prices have soared by 32pc this year, as investors sought a safe haven from the global debt crisis. However, some argue that gold is in a bubble fuelled more by speculation than the fundamentals of supply and demand. In contrast, platinum prices have risen by just 5pc so far this year – and supply remains very tight indeed.
Last month gold prices charged ahead of platinum prices, creating what some analysts regard as a sign that gold is overvalued……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

As gold prices moved up by more than $300 in August, the investment interest in the metal too shot up in the month. The turnover of e-gold grew by 148 per cent in the month against July and some of the gold exchange traded funds posted growth of more than 200 per cent.
Gold prices in the international market have moved from the August 1 opening rate of $1,609.5 to the highest level of $1,912 on August 23, gaining almost 18 per cent. The sharp rise as well as the corrections after the record high levels has only increased the investment appetite for the metal……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

For the last week and more gold has been on a roller coaster moving between $100 and $200 each way until now where it is hovering above $1,800. A broad spectrum of analysts points either to $1,500 or above $2,000.
With gold currently just above $1,800 we are around the half-way point for each move. The move each way would represent a move of just over 16%, which is not deeply significant in today’s gold world except for the trading fraternity; there is more, however, beneath these moves than meets the eye!………………………………………Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

The thing with gold is that, unless you hand it over to a great jeweller, it’s just a lump of metal. There’s no potential for it to be anything other than it already is.
That’s in contrast to investing in shares (where you are buying a slice of ownership of an ever-growing, ever-developing business) and property (where you are buying ownership of not just land and a building but also buying into a growing community)……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

The glitter of gold is taking the shine off India’s growth story. According to World Gold Council, India’s gold imports rose 60% in April-June 2011 from a year ago, as people snapped up the timetested hedge against inflation. India has always been a huge gold consumer, but the yellow metal is now our second-biggest import, behind crude, up from fifth place in 2007-08.
But, this fascination with gold could be a reason why growth seems to be flagging. Money locked up in the yellow metal effectively disappears from the economy to become jewellery or sits idle in bank lockers………………………………………Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

The world’s biggest buyer of bullion appears to be going a bit berserk this festive season. Even as the country ushered in Ganesh Chaturthi on September 1, celebrating the birthday of Lord Ganesh, the god of wisdom and prosperity, many households have extended their meagre savings to include small articles and intricate ornaments of gold, as an offering to the deity.
The elephant-headed god Ganesha is widely worshipped across the country as the god of wisdom and good fortune and traditionally invoked at the beginning of any new venture……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

As with past booms in housing prices and Internet stocks, the four-year surge in gold prices raises the same fundamental questions for market regulators. How should they react? Should they react at all? How do they even know if a bubble exists?
It is clear that speculation has been driving gold’s rise. People are buying gold as either a hedge against inflation or economic calamity or solely because they think the price will rise……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

The words ‘bubble’ and ‘gold’ aren’t exactly strangers. Since gold began its long march from lows of below $US300 in the early 2000s, a bubble has been called numerous times.
On each occasion those making the claim have seen prices rise ever higher. I remember reading about a gold bubble when the yellow metal hit $US600 an ounce, $US1000 an ounce and again at $1500 an ounce……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Because global commodity markets demonstrated divergent trends last week in the wake of macroeconomic concerns once again drawing attention, it was least surprising that precious metals, and in particular gold, turned out to be star performers. While the crude markets were buoyant over the week, most base metals remained largely flat.
On Friday, base metals fell across the board as the US jobs data for August came in worse than already subdued expectations, showing zero growth for the month with a downgrade to June and July figures……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

The first week of August, 2011 saw the world financial markets tumbling like a house of cards, the trigger being the US debt downgrade by credit ratings agency Standard & Poor’s. Financial markets continued to demonstrate large volatility with equities, risky assets and commodities (except for gold) tumbling and bonds rallying.
For many markets, August’s savage sell-off has been the worst since the October following Lehman Brothers’ implosion and investors diversified into havens such as high credit government bonds and gold……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

With Gold prices taking a tumble, investor interest is now turned to silver. After a strong consolidation in May-June, Silver prices have formed a trading channel, providing profitable opportunities to open new positions in the metal.
The chart below shows the long term support, the short term support (blue lines) and also the current price channel (red)……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Diamond lovers can loosen their purse strings this festive season. Rising cost of funds and a consequent fall in raw material demand among processors have cut polished diamond prices by 10% at least over the past three-four weeks, six months after they rose by a whopping 40%.
The industry attributed the relentless price rise partly to heightened speculation in roughs, the raw material, and a widening demand-supply gap, itself a consequence of an investor shift from stocks and currencies to diamonds, being increasingly perceived as an alternative asset class……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Copper will remain in short supply for a third straight year in 2012 as China-led demand boosts prices, Japan’s top producer said.
Demand will likely exceed supply by 495,000 metric tons in 2011, the biggest deficit since 2004, compared with 214,000 tons last year, said Akira Miura, executive officer of the marketing and raw-material department at Pan Pacific Copper Co., Japan’s biggest producer. The shortage may shrink to 31,000 tons in 2012, he said……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

There are two reasons you’ve seen lithium equities get pushed down in the last couple of months. The first has to do directly with uncertainty in Western economies. Second is the fact that there are likely too many junior exploration companies in the lithium space based on current and near-term supply and demand.
So based on these two factors, everyone is just getting pounded. It’s a flight to quality, and it’s a reaction of fear in terms of where to put your money, which is why you’ve seen gold hit historic highs……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Opec needs to take advantage of the resurging global economic turbulence to play a bigger role in the world’s economy instead of focusing on production and price policies, a prominent Arab oil expert has said.
While a new global economic system will take many years to shape, developments over the past few years have highlighted the significant role emerging economies can plan in the new system, said Walid Khadduri, a former a former adviser at the Organisation of Arab Petroleum Exporting Countries……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Kuwait pumped more than 2.8 million barrels per day (bpd) of oil throughout August, state news agency KUNA on Sunday reported oil minister Mohammad Al Busairi as saying, the highest level since the global economic downturn in late 2008.
Kuwait has not produced over 2.80 million bpd since its output peaked at 2.85 million bpd in September 2008, according to official data provided by the Joint Data Initiative (JODI), just before oil demand dipped in the global economic crisis……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Gold and silver zoomed again on Friday as the dismal U.S. jobs report for August drove most stocks into a nosedive. Gold jumped $47.80, or 2.6 percent, to end at $1,876.90 an ounce.
The boost in gold over the past year has launched precious metals exchange-traded funds (ETF) to the top of the charts. Here we look at the top ETF and the top dividend ETF……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Whether it is in bond funds — which have actually rallied since Standard & Poor’s downgraded the credit rating for the United States government — or in gold and precious metals funds, average investors have not only been hoping for a safe haven but for a chance to capture the strong numbers that routinely come up in reports on the market’s daily flip-flop.
Alas, they’re a bit disappointed, as bond funds lagged the Treasury rally and gold and precious-metals funds didn’t quite keep up with the record-setting prices of gold……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

German exchange EEX has won a tender to host auctions for 8 million EU allowances before 2013 on behalf of the Dutch government, a spokeswoman for the country’s environment ministry said.
“I can confirm that EEX has won the tender. Monday it will be officially announced … (and) more information will be known then,” said the spokeswoman from the Dutch Ministry of Infrastructure and the Environment……………………………………….Full Article: Source

Posted on 05 September 2011 by VRS |  Email |Print

Asian currencies strengthened for a second week, led by South Korea’s won and Malaysia’s ringgit, as optimism that the global economic recovery is intact bolstered demand for emerging-market assets.
The Bloomberg-JPMorgan Asia Dollar Index touched a two-week high and the region’s stocks completed a second weekly advance as global investors pumped more than $1.6 billion into equities in South Korea and Taiwan……………………………………….Full Article: Source

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