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Commodities Briefing 15.Mar 2012

Posted on 15 March 2012 by VRS |  Email |Print

GoldCopper is more than the main ingredient in wire and gold is more than what we wear on our fingers and around our necks. These commodities, along with others like oil and grains, are used by investors to gauge the health and short-term direction of the market, but how does it work? What do commodity prices tell us that we can use as traders?
Gold is the best-known commodity because it appeals to investors and non-investors alike. Consumers may not think of gold as an investible product, but the story of gold is actually complicated. Not only does it serve as a commodity, but also as a currency………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Crude oil prices spike. Copper tanks. Cotton and coffee can’t make up their minds. The price graphs you see look more and more like they’re tracking major seismic activity or a sprinter’s heart rate, not the markets.
If you’re a buyer of these or other commodities, you’re no stranger to the volatile nature of commodity markets over the past decade. The real headache for manufacturing organizations isn’t high or low prices — it’s that prices jump from high to low unpredictably, and often for no apparent reason………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Leaders of some of the world’s largest oil-producing nations Wednesday pinned current high oil prices primarily on market speculators, just as consuming nations warned that the current increased output levels are being more than offset by supply problems.
Brent crude oil prices are up around 17% this year, and in early March hit highs last seen in July 2008. Fears over a loss of Iranian oil supplies amid rising tension with the West over its nuclear program, in addition to supply losses from South Sudan, Yemen, Syria and the North Sea, have fueled concerns over whether tightened global oil supply can meet demand………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Oil supply from non-OPEC countries will grow less than expected in the first quarter this year, the International Energy Agency (IEA) said on Wednesday, leaving its global oil demand growth forecast unchanged.
The agency, which advises industrialised nations on energy policy, said non-OPEC oil production will rise by 300,000 barrels per day (bpd) In the first quarter of 2012, down from 490,000 bpd in previous forecasts as unplanned shut-ins topped 750,000 bpd………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

OPEC’s crude oil production rose for a fifth month to the highest in more than three years as Saudi Arabia and Libya boosted supply, according to the International Energy Agency.
The 12 members of the Organization of Petroleum Exporting Countries produced 31.42 million barrels a day of crude last month, the most since October 2008, the Paris-based agency said today in its monthly oil market report………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Oil supply from non-OPEC countries will grow less than expected in the first quarter this year, the International Energy Agency (IEA) said on Wednesday, leaving its global oil demand growth forecast unchanged.
The agency, which advises industrialized nations on energy policy, said non-OPEC oil production will rise by just 300,000 barrels per day (bpd) in the first quarter, down from 490,000 bpd in previous forecasts as unplanned shut-ins topped 750,000 bpd………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Once there were multiple oil cartels, each determining their own production rates and price per barrel of crude. Because they sniped at one another and caused a lot of wild fluctuations, OPEC was formed to bring some stability to the situation by controlling overall output and calling a singular price. That all changed in the mid 1980s when oil went to a world commodity pricing system.
The commodities market is a strange place where consumers — big oil companies — write futures contracts for crude deliveries to their refineries, and speculators — non-consumers — gamble on whether the price of crude will go up or down………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

High crude oil prices and a robust output could combine to help Saudi Arabia to post its biggest budget surplus in 2012, a recent report by Kuwait based Global Investment House (GIH) suggests.
“While we agree that Saudi Arabia will see a budget surplus in 2012, we expect the actual surplus to be substantially higher than the projections”, the report says………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

As 2012 wears on, investors seem less and less sure how the year will end. Some feel that the early bull market we experienced is here to stay and that strong U.S. data only supports that claim. But others feel that such rapid appreciations in stock markets mean that we are about due for a pullback, potentially ending the year on a sour note.
No matter which way you feel about the economy, there are always strategies to make a trading profit, and for the time being it looks like precious metals are it………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Investment bank Jefferies Group Inc.’s commodities arm has agreed to buy the gold, silver and other precious-metals assets from the trustee liquidating MF Global Holdings Ltd.’s brokerage business.
James Giddens, the trustee overseeing the liquidation of MF Global’s brokerage’s commodities business, said in a court filing Monday that an offer from Jefferies Bache Financial Services Inc. is the “best available opportunity” to sell the remaining physical property under his control………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

The increase in Nickel supply could be much lower than expected, says Societe Generale in a report.
“Given the potential for the new projects to be delayed, or operate below potential, we believe that the actual increase to nickel supply in 2012 will prove to be much less than currently envisaged”, the report says while adding that nickel production has been on a constant rise over the past year after Vale brought back its Canadian operations………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

It’s not only individuals that are seeking safe havens. Increasingly, legislators are showing interest in providing their constituents with safe alternatives to paper money. Over a dozen US states have expressed interest in considering or issuing an alternative currency, and one has already taken a step in that direction with gold and silver coins.
On March 25, 2011, Utah’s Governor Gary Herbert signed House Bill 317, approving gold and silver coins issued by the federal government as legal tender. Recognizing gold and silver as legal tender eliminated certain state tax liabilities such as tax on profits on coins when were viewed mostly as assets………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

The last few weeks have seen a larger consolidation pattern forming in gold, pointing to a much bigger consolidating pattern that implies far more than just a short-term trading move just ahead of us.
The forces that drive both supply and demand in the very short-term are just about in balance, so it is appropriate that we look at these forces to see how they influence gold prices in the short, medium, and long term………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Recent good news from the Federal Reserve regarding the state of the economy, and reports of several banks passing the latest round of stress tests is encouraging for most investors. The one group of investors that is less than thrilled with recent developments is gold traders.
The precious metal has been in a bull run since 1999, and has been particularly strong since the recession as investors have turned to gold as a hedge against a weak dollar………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

In early august 1972, the gold price hit what was then a fresh all-time record – $70 per ounce, twice its fixed price of a year earlier, when US president Richard Nixon untied the dollar, and thus the world, from the last pretense of a Gold Standard.
With hindsight, the 1970s’ inflation makes what came next sound as inevitable today as the guitar solo in Led Zeppelin’s Stairway to Heaven. ……………………………………….Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

The most recent figures from China’s Ministry of Industry and Information Technology note that China, already the world’s No. 1 gold miner since 2007, continued its dominance in world gold production with output rising last year by 5.89% to 360.95 tonnes.
The most recent statistics also show that the country’s gold mining sector continued to expand in January with a rise of about 3.69% from the same month a year ago, suggesting that we may well see further annual gold mine output growth in 2012………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Another sign of Asia’s increasing importance in the global gold market is news that Singapore is planning to boost its share of global gold trade sevenfold after scrapping taxes on gold, silver and platinum bullion.
This is the aim of the International Enterprise Singapore, the city state’s external trade agency according to Bloomberg. Currently just 2% of world gold demand flows through Singapore and Singapore is aiming to increase that to 10% to 15% over the next five to 10 years, Kathy Lai, assistant chief executive officer at IE Singapore, said………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

As investors from George Soros to John Paulson snapped up bullion amid a decade-long rally, the best gold investment of the past two years was found in India, where funds tracking the metal surged while avoiding the stock market swings that hurt mining companies.
The BLOOMBERG RISKLESS RETURN RANKING shows India’s Reliance Gold fund returned 4 percent in the two years ended yesterday when adjusting for price swings, leading a group of exchange-traded products from the country that top a list of 44 gold-related investments, data compiled by Bloomberg show………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Investors in India have ratcheted up their purchases in exchange traded funds that aim to track the price of gold. For the month of February, gold ETF assets under management in India soared to 97.95 billion Rupees (US$1.96 billion) up 161% from a year ago.
Data from the Association of Mutual Funds in India showed that total assets of gold ETFs jumped to the 97.95 billion Rupee figure as of February 29 from 37.44 billion Rupees a year ago. ……………………………………….Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Aside from traditional non-correlation of commodity markets to conventional portfolio allocations, concerns about food prices offer strategic investment opportunities in this sector. When prices of foodstuffs are rising, it makes sense to be able to profit or even hedge against these events.
This logic naturally would include other commodity ETF/ETN products directed toward metals, energies and currencies………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

After two-straight weeks where commodity-related exchange-traded products saw positive inflows across all asset classes, the investment tide changed course this week ending Thursday, with $425 million in net outflows.
Precious metals led commodity asset classes with outflows of $188 million, followed by energy with outflows of $126 million; broad market (multicommodity) with $68 million in outflows; agriculture with $25 million in outflows; and industrial metals with $18 million in lost investment capital. Exchange-traded products (ETPs) include exchange-traded funds (ETFs), exchange-traded vehicles (ETVs) and exchange-traded notes (ETNs)………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Alameda, California based United States Commodity Funds LLC is a privately owned Asset Management Company and one of the leading providers of commodity ETFs.
The $ 3.39 billion asset under management firm has recently made the eleventh addition to its product portfolio in the commodity ETF space by introducing the United States Agricultural Index Fund (USAG)………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

The alternative asset managers Man Group have launched a Ucits commodities fund for retail and institutional investors. The Man Commodities fund - launched with $50 million in seed assets - aims to outperform the Dow Jones UBS Commodity Index by between 5% and 10% annually.
GLG trader Nick Burnham will manage the fund, which uses a systematic investment approach developed by Man Systematic Strategies………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

The Bombay High Court on Wednesday directed the Securities and Exchange Board of India (SEBI) to reconsider an application filed by MCX Stock Exchange (MCX – SX) to set up an equity trading platform.
The capital market regulator rejected MCX-SX’s application in September last, saying that the bourse had failed to comply with the norms on the shareholding structure stipulated for a stock exchange………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

The currency market often sees many swings on the worlds’ most often used currencies. This article will walk through the implications these movements can have on their economies. One of the most interesting aspects of the Forex market is the global implication carried behind each and every quote.
While a price may move quickly, and at times, feel fleeting; it’s often easy to forget that these prices carry heavy repercussions throughout our economies – even if your nations’ currency isn’t in the quote………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Europe probably won’t back down on this year’s expansion of its carbon market to include aviation, while airlines will comply with the program, according to Eneco Energy Trade BV.
“The scenario that the European Union backs down is not very plausible,” said Edit Kiss, the Rotterdam-based carbon portfolio manager at the unit of Dutch utility Eneco Holding NV. “Ultimately, airlines are not suffering that much from the EU emissions trading system,” she said………………………………………..Full Article: Source

Posted on 15 March 2012 by VRS |  Email |Print

Australia could get more out of its carbon pricing scheme by focusing its emissions trading efforts on neighbours such as Indonesia rather than Europe, according to a leading climate think tank.
The Climate Institute, an independently funded body, issued a discussion paper yesterday arguing that Australia should use bilateral or regional trade deals as a model to set up carbon trading links with individual countries, especially developing countries in the Asia-Pacific region………………………………………..Full Article: Source

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