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Commodities Briefing 01.Apr 2016

Posted on 01 April 2016 by VRS |  Email |Print

The US Fed’s frequent change in its stance over interest rates kept metals, bullion and energy prices subdued in 2015-16. Prospects of recovery in consumption of metals were weakened by contraction in China and turbulence in the global economy. The US Fed’s frequent change in its stance over interest rates kept metals, bullion and energy prices subdued in 2015-16.
After three years of negative return, gold turned positive in FY16, following huge volatility in equity markets. Gold climbed 16.5 per cent in Q1, its biggest quarterly rise since 1986. Silver lagged behind with a fifth year of negative returns………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Oil declined as rising U.S. crude stockpiles kept supplies at the highest level in more than eight decades. Copper dropped for a fifth day, the longest losing streak since January, amid growing scepticism about demand in China. Most other metals traded lower in London.
However, gold headed for the biggest quarterly advance since September 1990 as demand for haven assets surged to make the metal one of this year’s best performing commodity. BNP Paribas Global Head of Equity Derivative Strategy Edmund Shing discusses commodities with Bloomberg’s Kenneth Hoffman. They joined Anna Edwards on “Countdown.”……………………………………….Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

In the first half of March, the S&P GSCI Total Return had added 9.6% and staged its biggest comeback ever, gaining 18.8% from its bottom on January 20, 2016. Unfortunately, the index gave up 4.3% since March 17, 2016, losing about half its March gain.
Despite the loss, the index posted its first positive monthly gain of 4.9% (data ending March 30, 2016) since October 2015. March’s commodity return is historically big, and is the biggest March since that in 2006, when the index gained 5.1%………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

The Bank of Canada says poor prices for oil and other resources could become the “dominant source of drag” on the economy. Using its “best guess,” the Bank of Canada predicts the economy will take more than two years to fully adjust to the commodity price shock.
Lynn Patterson, the central bank’s deputy governor, said in a March 30 speech that tumbling oil and other resources prices have translated into losses of about $1,800 for every Canadian………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Big banks have slightly raised their oil-price forecasts for the first time since August but remain cautious about crude’s outlook. A survey of 13 investment banks by The Wall Street Journal shows their average forecast increased by a dollar from the previous month, while U.S. crude prices have rallied by nearly 50% since their February lows.
The banks see Brent crude, the international oil-price benchmark, averaging $40 a barrel this year, and West Texas Intermediate, the U.S. oil gauge, averaging $39 a barrel………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

The Federal Government has put forward the name of a former Group Managing Director of the Nigerian National Petroleum Corporation, Mohammed Barkindo, for the position of Secretary-General of the Organisation of Petroleum Exporting Countries.
Barkindo worked at NNPC until 2010 and served as acting secretary-general of OPEC in 2006, as well as representing Nigeria at the group. Bloomberg reported that two persons privy to the development confirmed the nomination but asked not to be identified because it had yet to be made public………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Anticipation for next month’s OPEC meeting has been building, and it’s showing in the recent oil price rally. News of the OPEC meeting has put crude oil prices on track for their best month in almost a year.
The cartel’s sit-down next month will push prices higher due to a historic change expected to come out of the meeting. And one country’s reluctance to comply won’t be a factor, despite what some analysts think now…But before we get to that, here’s just how big oil’s rally was in March………………………………………….Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Low oil prices and waning demand for drilling services will continue to put the credit profiles of Brazilian offshore drilling vessel projects under pressure for the next three to five years, says Moody’s Investors Service.
Petróleo Brasileiro S.A. (Petrobras, B3 negative), Brazil’s national oil company, slashed its projected capital spending budget by more than a third earlier this year. Much of the reduction in spending will affect exploration and production activities, impacting drillers that have significant re-contracting risk and a large amount of debt outstanding………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Gold prices are likely to slip below $1,200 an ounce in the months to come, GFMS analysts at Thomson Reuters said in a report on Thursday, with U.S. interest rates expected to rise and physical demand remaining soft. The metal has rallied more than 16 percent this year, reaching a 13-month high of $1,282.51 an ounce this month, but may struggle to maintain those gains, the report said.
“Following three consecutive years of annual price declines, gold has recorded a blistering start to 2016,” GFMS said in its Gold Survey 2015. “Such an impressive performance has been largely attributed to a reduction in risk appetite among investors and fresh interest in safe haven assets.”……………………………………….Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

No one can agree on what just happened in gold, let alone what comes next in 2016, writes Adrian Ash at BullionVault. “Gold heads for best quarterly rally in 25 years,” says data and news provider Bloomberg. Not so, say competitors Thomson Reuters. “Gold poised for best quarter in nearly 30 years.”
What’s 5 years between arch-rivals? The two news-wires’ headline writers can’t agree on the key driver of gold’s sharp Q1 rebound either. Bloomberg says “safe haven demand”; Reuters says “dovish Fed” comments on future rate rises………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Gold futures settled higher Thursday, scoring their best quarterly performance since 1986—a year when “Top Gun” was the most popular movie. Bullion has benefited as the Federal Reserve’s dovish stance on policy has softened the highflying U.S. dollar.
Prices for the most-active contracts saw a monthly gain of less than 0.1%—the smallest of the year, but gold jumped 16.4% in the first three months of 2016, its strongest quarterly showing since the third quarter of 1986, according to FactSet………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

The world’s top two gold consultancies have offered up mixed outlooks for prices in 2016. Metals Focus and Thomson Reuters GFMS each launched their 2016 gold reports on Thursday. Both firms are cautious on gold in the short term, as they see prices pulling back in the second quarter after rising a whopping 16 per cent in the first quarter.
But Metals Focus thinks the second half of 2016 will be very strong, while GFMS is optimistic but more guarded. Metals Focus predicted gold will peak at US$1,350 an ounce in the fourth quarter, up from US$1,235 currently………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Precious metals are volatile in the best of times. Nowadays, the price swings for investors is like being attached to a tennis ball at Wimbledon. The swings can be rapid, violent and go in either direction. Then they can swing right back.
Worse, however, is that before and after the financial crisis, there is no clear long-term direction for precious metals. See, the great thing about stocks is that they have a long-term upward bias. Over time, stocks go up. Precious metals don’t. That’s why I don’t believe they have a place in a long-term diversified portfolio………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Iron ore is set to outpace other commodities in the first three months of 2016, finishing a volatile quarter up almost 25 per cent. The rally in iron ore prices, reflecting strengthening Chinese steel prices and increased production ahead of the country’s key construction season, has come amid a rollercoaster ride for commodities in the first quarter.
The rebound will be good news for large producers including BHP Billiton, Rio Tinto and Brazil’s Vale, whose profitability relies on the iron ore price………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Tin prices are on the rise with demand remaining strong, yet a prolonged mining slump and other factors are contributing to tightened supply.
A metal used as solder for electrical circuits, tin is very much in need by an assortment of manufacturers. Yet major exporters, Indonesia and Myanmar, are shipping much less of it in the face of a multiyear slump that investment in mines and smelters sapped………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Prices for hot-rolled coil in the US rose again Thursday as more market sources indicated firm offerings at higher prices with upside expected. Platts increased its daily HRC assessment to $455-$465/st from the previous $440-$460/st. The move reflects a $460/st midpoint, where the bulk of offers and transactions have been heard.
The daily cold-rolled coil assessment remained flat at $610-$630/st. Both prices are normalized to a Midwest (Indiana) ex-works basis………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Corn prices and the commodity-related exchange traded funds plunged Thursday on a double whammy of expanding stockpiles and increased planting despite an oversupplied market. The Teucrium Corn Fund fell 5.0% Thursday as CBOT corn futures declined 4.5% to $3.505 per bushel. CORN is down 0.6% year-to-date and 18.6% lower over the past year.
The falling corn prices is dragging down broader agriculture-related exchange traded products on Thursday as well. The PowerShares DB Agriculture Fund, which includes 12.5% corn, dipped 0.9%………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Despite their economies growing at twice the rate of developed economies, emerging market ETFs have been significantly underperforming developed markets ETFs so far this decade. One of the reasons for this is how emerging market ETFs’ underlying indices are constructed.
ETFs, or exchange traded funds, are one of the best ways to get exposure to a market or sector. They track an index, like the S&P 500, have low fees and can be traded on an exchange like a regular stock………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

The word came down in late 2014 from the head of the Justice Department: The U.S. wouldn’t stop at extracting billion-dollar settlements from banks accused of rigging markets. Within months, the nation’s top cop said, individual wrongdoers at big banks could also expect to be brought to justice.
More than a year later, the U.S. hasn’t charged any individuals over rigging exchange rates. Britain this month dropped its own efforts to bring cases against currency traders, saying there wasn’t enough evidence. For U.S. prosecutors in the Obama administration’s waning days, time is running short………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

China’s central bank revealed its short foreign-currency positions in forwards and futures for the first time, a decision that Australia & New Zealand Banking Group said will help show the extent of the monetary authority’s support of the yuan.
The People’s Bank of China held $US28.9 billion of such positions with commercial lenders as of end-February, according to a statement posted on its website. It added that it made short-foreign currency trades in derivatives with commercial lenders to meet demand from companies looking to hedge overseas liabilities………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Worldwide, carbon pricing has become a cornerstone policy tool for tackling climate change. Regions pricing carbon have grown exponentially since 2009—with the majority of this “bottom-up” growth taking the form of greenhouse gas cap-and-trade programs.
According to the International Carbon Action Partnership’s Status Report 2016, 40 percent of global GDP is covered by an emissions trading system (ETS)—a figure projected to increase to 49 percent in 2017. By this time next year, some 16 percent of global emissions will be covered by ETS, up from only 4 percent in 2004………………………………………..Full Article: Source

Posted on 01 April 2016 by VRS |  Email |Print

Analysts’ forecasts for regulated carbon dioxide emissions under the EU Emissions Trading System in 2015 show a mixed picture ahead of data due for release Friday, with a rough consensus pointing to a modest increase or decrease from 2014 levels.
That compares with a significant 4.6% drop in regulated CO2 emissions in 2014 from the previous year. The EC’s annual data due Friday represent the most authoritative figures showing CO2 emissions across the 31-nation system, revealing underlying demand for carbon allowances from more than 11,000 installations across Europe………………………………………..Full Article: Source

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