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Commodities Briefing 16.Sep 2011

Posted on 16 September 2011 by VRS |  Email |Print

Commodities may drop to the lowest level since November after failing to breach key resistance levels, according to technical analysis by Commerzbank AG.

The S&P GSCI Total Return Index of 24 commodities has failed at the downtrend and 200-day moving average resistance at 5,090 and 5,150, London-based Karen Jones, head of fixed-income, commodity and currency technical analysis, wrote in a Sept. 14 report. A resistance level indicates a price at which sell orders may accumulate when a security is rising……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Nicolas SarkozyIn a speech to European policymakers in June Nicolas Sarkozy, the French president, encouraged his audience to be serious about “fighting the mafia”. He was not referring to a French Tony Soprano, but rather that other breed of criminal: commodity speculators, whom many politicians on either side of the Atlantic blame for dramatically pushing up the price of oil and food and contributing to volatility.
America is leading the charge. As part of a new financial-reform law, the Commodities Futures Trading Commission (CFTC) is proposing “position limits” on the amount of derivative contracts, including futures and swaps, a trader can hold for 28 commodities……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Jeremy Grantham, the co-founder of global investment firm GMO, is captivated by market bubbles. He has predicted a number of market bubbles during his 40-year investment experience, including the Japanese equities and real estate bubbles of the late 1980s, and the technology bubble of the late 1990s.

It was only last year he made headline news by predicting a housing bubble for the Australian market. However, this time around, Grantham is hard pressed to predict a commodities bubble. Instead, Grantham found a fundamental shift in the market that he says “is the most important economic event since the industrial revolution”……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Global regulators may need to tighten their rulebooks for commodity derivatives markets to ensure they operate transparently and free from abuse, the International Organization of Securities Commissions said.

IOSCO recommended supervisors use position limits, publication of open contracts and reporting of over-the-counter derivatives to tame commodity markets that operate in “disorderly conditions,” according to an e-mailed statement……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

High-profile commodity hedge-fund manager Paul Touradji, facing what could be his flagship fund’s first losing year, is stepping back in to run his firm’s trading business full-time.

Mr. Touradji, a former protege of Julian Robertson’s at Tiger Management, plans to drop responsibility for day-to-day management of Touradji Capital Management LLC to fully focus on trading, according to people familiar with the matter……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

The concept of investing in commodities is oft-viewed as easier to understand than other assets: we all know what commodities are and many of us want them in some guise or other, particularly when it comes to gold, silver and precious metals.
But ease of understanding doesn’t mean less risk or lower volatility. How often do we see news headlines such as ‘Gold Price Reaches Record High’ and then an almost-inevitable ‘Gold Price Sees Sharp Drop’ at a later date? Given such swings, does a specialist commodities closed-end fund bring more volatility with it than other fund structures?………………………………………Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

August was a tumultuous month for markets across the board. The first ever downgrade of U.S. debts was handed out by S&P while the Fed announced it would be freezing rates for nearly two years.
Markets reacted poorly to the headlines throughout the month, swaying back forth by as much as 5%. Volume went through the roof as traders made a play to profit on volatile markets, while others pulled their assets and headed for higher ground and safer asset classes………………………………………Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Brent crude and copper may rally as global economic growth led by emerging markets remains adequate to drive an expansion in raw-materials demand, Goldman Sachs Group Inc. said, sticking with forecasts for price gains.

“We remain constructive on commodities,” Allison Nathan, an analyst at Goldman for more than a decade, said in an interview today. Still, “risks to our bullish views have risen,” said Nathan, citing Europe’s sovereign-debt problems and a “mixed bag” of economic data from the United States……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Goldman Sachs analysts said on Thursday it expects the price for Brent crude to rise to 130 U.S. dollars a barrel in 12 months from now despite the uncertainties in the global economy.

Speaking at a press briefing in Singapore, the investment bank’ s senior commodities analyst Allison Nathan said the growth in the developed economies will be weak but the emerging economies are expected to make up for the weakness in demand for commodities……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Gold could rally to $2000 by 2011-end, according to Thomson Reuters GFMS Survey 2011 Update. Investment in all forms combined in the second half of 2011 is forecast to reach a record of 1000 tonnes, which equates to a value figure of over $60 bn( $1815 per ounce). This compares to the Update’s figure for the first half of 624 tonnes (or $29bn).

According Philip Klapwijk , Global Head of Metals Analytics at Thomson Reuters GFMS, “some may think our first half figure sounds a little conservative but we should remember that early 2011 saw a wave of profit taking as the prior rally ran out of steam, and equities were still enjoying a nice bull run”……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

The price of gold, which has enjoyed a steady, decade-long rally, went into overdrive this summer. Investors sought out the precious metal as a haven from geopolitical problems that piled up like cars in a freeway crash.

In the U.S. a political conflict over raising the federal government’s debt ceiling precipitated the loss of the nation’s triple-A credit rating from Standard & Poor’s. In Europe a sovereign debt crisis that had seemed under control just a year before exploded with violent force……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Have you ever experienced a “Deja Vu” feeling? Well, if you have never experienced one, maybe after reading this post you will.

Let’s start with a technical chart of gold. These days, gold is holding up strongly, and is only $80 below its all-time high. If this continues, we might consolidate for a couple of weeks, to work off the overbought condition of the MACD indicator……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

The gold price could reach as high as $2 500/oz next year, and Europe’s debt woes are now “too big to handle”, Sprott Asset Management CEO Eric Sprott said on Thursday.

“I’m sure it will go through $2 000/oz in a year, maybe it get’s to $2 500,” he told Mining Weekly Online. Asked for his view on where bullion might be headed longer-term, Sprott said this depended on monetary policies governments adopted……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Gold could push through the $2 000/oz level by year-end on the back of strong investment demand, the latest Thomson Reuters GFMS Gold Survey 2011 Update states.

The report, the first to be prepared by the precious and base metals research consultancy since its acquisition by Thomson Reuters, was released in London and Hong Kong on Thursday……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Gold bullion is a valuable portfolio hedge, according to Charles de Vaulx, value investor and manager of the top-performing First Eagle Global Fund. His fund has placed over 7% of its assets in gold bullion, according to an interview with Fortune.

Gold recently hit a nominal high of $1,900 per ounce, and it’s expected to continue rising. While whispers of a “gold bubble” should not be ignored, bubbles can last a long time, and more value may still be priced in before it deflates……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Miners are forging ahead with aggressive spending plans despite sinking stock values and retreating commodity prices, in a bet that metals demand will remain solid even as the global economy softens.
Mining giants such as Alcoa Inc., Rio Tinto PLC and Xstrata PLC advanced major new projects this week, adding to the billions of dollars earmarked by miners around the world for expansion through acquisitions, new mine construction and increased exploration……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

The International Energy Agency said on Thursday that it had ended its release of oil from strategic reserves begun in June for its 28 member countries owing to a cut in Libyan supplies.

IEA countries “concluded that the interrupted Libyan supplies have been successfully addressed by a combination of the IEA collective action and increased production from producer countries,” the body said in a statement……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

The Eurasian Trading System commodity exchange has introduced several new instruments during the current year. According to ETS, these innovations will improve the efficiency of the exchange’s activity.

Kazakh traders are developing new instruments. Such innovations as an anonymous exchange auction, a specialized exchange auction, and the launch of a standard grain export contract have already been appreciated by the participants of the domestic commodity market……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Wall Street firms have been more active than other players in seeking to influence regulators writing rules for the $601 trillion swaps market, said Gary Gensler, head of the U.S. Commodity Futures Trading Commission.

“Large institutions usually have an outsize interest in getting to us and investors tend not be knocking on our doors as much,” Gensler said today at the Bloomberg Markets 50 Summit in New York. “There is a little imbalance.”………………………………………Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Last week’s shock intervention by the Swiss National Bank to reduce the value of the Swiss franc has left investors scrambling to find stable currencies elsewhere. The result is a rush into an exotic selection of foreign currencies ranging from the Czech koruna to the Canadian dollar.
When the Swiss franc was last week pegged at 1.20 against the euro by the Swiss National Bank, investors were quick to flee the ‘safe-haven’, which subsequently lost 10% of its value against the euro and 8% against the US dollar……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

Nordic currencies rocketed after the Swiss National Bank slammed the door on investors buying Swiss francs as a safe retreat last week, but since then, they have plunged so fast that they’re among the worst-performing major currencies in the world—worse even than the euro.

The Norwegian krone and the Swedish krona both notched up substantial gains against the euro following the Swiss National Bank’s decision to cap the value of the franc against the euro on Sept. 6, which effectively struck the franc off the list of safe havens……………………………………….Full Article: Source

Posted on 16 September 2011 by VRS |  Email |Print

A New Zealand climate change expert says people need a cash incentive to change their habits, and delaying an emissions trading scheme will not help.

A review has called for the phasing in of the Government’s Emissions Trading Scheme to be slowed down meaning key emitters, like the energy and transport sectors, will not be required to meet their obligations for an extra two years……………………………………….Full Article: Source

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