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Commodities Briefing 27.Apr 2012

Posted on 27 April 2012 by VRS |  Email |Print

Ben BernankeWith the US FOMC (Federal Open Market Committee) remaining in a ‘wait and watch’ mode as far as rate cut is concerned while leaving the door open for further quantitative easing, uncertainty is likely to prevail in global commodity markets.

The dollar tumbled to key support levels after the Federal Reserve Chairman Mr Bern Bernanke’s press conference subsequent to the US FOMC meeting. Markets were seen guarded on Wednesday, waiting for cues on another round of monetary policy easing………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Commodities ended broadly higher on Thursday, with copper one of the biggest gainers,
after high claims for jobless benefits in the United States fed expectations that the Federal Reserve may approve another U.S. economic stimulus.
Investors also bought copper, oil and other key commodities as U.S. housing data that showed contracts to purchase previously owned homes was near a two-year high in March, and on a weaker dollar which boosts demand for dollar-denominated raw
materials………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

A measure of Canadian commodity prices dropped for the fourth straight month in March, led by declines in the prices of oil and gas, Scotia Economics reported Thursday.

The Scotiabank commodity price index slipped 2.9 per cent in March from February, and is 5.2 per cent below the reading for March 2011 — the first time the index has shown a year-over-year decline since October 2009, the report said………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Top commodity managers Bradley George and George Cheveley of Investec believe over-emphasis on potential negative outcomes in their sector is opening up enticing new opportunities.

In their latest investor note Cheveley (pictured below), Euro Stars AAA-rated, and George, Euro Stars AA-rated, said sector-specific risks and macro concerns were affecting investors view on the sector………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Middle East oil exporters are flooded with cash from high oil prices and spending big chunks of the windfall at home, and one potential repercussion has widespread implications for the financial markets: Saudi Arabia and others need high oil prices to balance their budgets.

How high, though, seems to be a point of disagreement between the Saudis and outside observers. In a report last September, International Monetary Fund staff figured the break-even price at $80 per barrel in 2011 and said it would rise to $98 per barrel by 2016. By comparison, OPEC reported the average price for its crude was $107.46 last year………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will trim shipments from unusually high levels through to the middle of May as demand from Asian refiners declines, according to tanker-tracker Oil Movements.
OPEC will export 24.13 million barrels a day in the four weeks to May 12, compared with 24.15 million a day in the period to April 14, the researcher said in an e-mailed report today. The data exclude Angola and Ecuador………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Citi has warned the commodity supercycle is ending as the Chinese driver slows. But one commodity that could stay expensive is oil.
Oil is different — We see Russia as a play on oil, and oil is different to the rest of the commodity complex thanks to the power of the OPEC cartel and the political fragility of the supply side. Unlike most other commodities, oil has many drivers outside Chinese infrastructure investment; as the only major commodity to rise in price in real terms during the twentieth century, its investment and price cycle has been quite different to that of the rest………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

In a bizarre presentation at the April 25 London conference of the IEA the agency held fast to the now heavily shopsoiled doctrine of catastrophic global warming, and used that as its main plank to put out the begging bowl for $5 trillion.
This is the IEA’s estimate of what is needed for its unreal mix and mingle of energy gimmicks and real energy solutions, that it calls Clean Energy Progress………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Governments are falling badly behind on low-carbon energy, putting carbon reduction targets out of reach and pushing the world to the brink of catastrophic climate change, says the International Energy Agency in its annual “Tracking Clean Energy Progress” report, issued.
“The world’s energy system is being pushed to breaking point. Our addiction to fossil fuels grows stronger each year. Many clean energy technologies are available but they are not being deployed quickly enough to avert potentially disastrous consequences.” writes Maria van der Hoeven, executive director of the International Energy Agency (IEA), in the Guardian………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Gold traders are more bullish after central banks expanded their bullion reserves and hedge funds increased bets on a rally for the first time in three weeks. Fourteen of 28 analysts surveyed by Bloomberg expect prices to gain next week and nine were neutral, the highest proportion in two weeks. Mexico, Russia and Turkey added about 44.8 metric tons valued at $2.39 billion to reserves in March, International Monetary Fund data show.
Fund managers raised their so-called net-long positions by 2.5 percent in the week ended April 17, according to the Commodity Futures Trading Commission………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Gold and silver mining stocks have sold off by roughly 30% from their 52-week highs based on the PHLX Gold/Silver Sector Index (XAU) and by roughly 32% based on the Amex Gold Bugs Index (HUI). In comparison, gold is down approximately 14% from its nominal all time high in 2011 while silver is down approximately 37%.
The XAU / Gold ratio suggests that gold and silver miners are oversold. In fact, the shares of some companies are trading below their net asset values………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Physical demand for gold has been very uninspiring with the amount of buying in conjunction with an Indian festival appearing well below levels from a year ago, said UBS in a commodity briefing.

According to the bank, combined volumes on the Shanghai Gold Exchange have been fairly decent lately, consistently trading above the 12-month rolling average of about 7.5 metric tons so far this week………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

The value of India’s bullion trade at the country’s commodity exchanges fell by more than a quarter during the first half of April, a recent report by the country’s Forward Markets Commission (FMC) shows.

As the the FMC data, the total value of bullion trade for April 01-April 15, 2012 was Rs 239337.24 Crore. This is 27.30% lower than the Rs 329216.87 Crore of bullion traded during the same period in 2011………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Could diamonds be the new gold? A small number of investment professionals around the world are competing behind the scenes to turn the gem into a commodity that would be available to investors in the way that gold has been traded through funds on exchanges.

Trading in diamonds is limited in the United States to the retail market for engagement rings and other jewelry and the back-room bargaining among merchants in places like Manhattan’s diamond district on West 47th Street………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

In Russia, all Precious Group Metal (PGM) inventories were deemed to belong to the State until the collapse of the USSR in 1989. As such, all information regarding production, reserves, refining, consumption and exports were considered to be a state secret and therefore not publicly available.

The secrecy over the status and amount of Russian palladium stocks, coupled with unrest in the region have frequently raised concerns about possible disruptions to the palladium market………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

The Chinese economy is shifting towards a consumption driven economy from an investment dependent one and this is likely to have a profound impact on the usage of commodities, a recent report by Barclays Capital indicates.

Metals like aluminium, nickel, gold and palladium are expected to increased demand during this change while growth in demand for metals like copper, zinc and steel is expected to fall. In short, commodities that are more dependent on consumer demand are likely to gain more……………………………………….Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

UBS, the Swiss-based bank known for its private-banking arm, added to its family of exchange-traded notes today with the launch of a broad commodities-focused ETN that provides blended exposure to a total of 28 commodities and that’s designed to control the deleterious effects of contango.

The ETRACS DJ-UBS Commodity Index 2-4-6 Blended Futures ETN (NYSEArca: BLND) comes with an annual expense ratio of 0.70 percent, and is so named because it is an equal weighted portfolio among three Dow Jones-UBS indexes that cherry pick different parts of the futures curve………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

India’s commodity futures turnover posted its first-ever drop in the two weeks to April 15, as traders took to the sidelines fearing more bans after guar trade was suspended and as striking jewellers stayed away from hedging.
The turnover dropped 13.5 per cent from a year earlier to 5.13 trillion rupees ($97.21 billion) during April 1-15, the commodities market regulator Forward Markets Commission (FMC) said………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Freepoint Commodities LLC, a commodity merchant founded by former RBS Sempra executives, said that it will acquire the mineral concentrates business from J.P. Morgan Chase & Co., representing its leaders’ latest move to make a comeback into the physical commodities trading business.

The deal, which was announced on Wednesday, will reunite a team of metal traders with David Messer, former chief executive of RBS Sempra Commodities, a joint venture between Royal Bank of Scotland Group and Sempra Energy………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

Some of the biggest players in foreign exchange sense trouble ahead for the euro and believe a major shakeout is coming, even though forward-looking FX derivatives point to yet more lethargy.

Judging from options prices, which measure how much volatility traders are predicting, the euro in broad terms is expected to move just 1.8% either side of where it is currently trading, at just over $1.32. That’s about a third less than the market anticipated at the start of the year, and it also mirrors a broader market trend: the so-called implied volatility priced into a whole host of major currencies is at its lowest level in years………………………………………..Full Article: Source

Posted on 27 April 2012 by VRS |  Email |Print

The euro was little changed against the dollar in a volatile session on Thursday which saw the single currency swing from a three-week high to losses and then higher after signs of a pickup in U.S. housing raised risk appetite.
Contracts to purchase previously owned U.S. homes increased solidly to a near two-year high in March, data showed………………………………………..Full Article: Source

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