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Commodities Briefing 08.Apr 2016

Posted on 08 April 2016 by VRS |  Email |Print

Over the last century, the global population has quadrupled. In 1915, there were 1.8 billion people in the world. Today, according to the most recent estimate by the UN, there are 7.3 billion people — and we may reach 9.7 billion by 2050. This growth, along with rising incomes in developing countries (which cause dietary changes such as eating more protein and meat) are driving up global food demand.
Food demand is expected to increase anywhere between 59% to 98% by 2050. This will shape agricultural markets in ways we have not seen before………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Iraq plans to lower the oil price forecast in its 2016 budget to about $32 a barrel from $45, widening its fiscal deficit by several billion dollars, the International Monetary Fund (IMF) and a senior government official told Reuters.
The new price estimate is based on the continued low level of global oil prices in recent months, said Marwa al-Nasaa, Amman-based IMF resident representative for Iraq. “We’re setting it closer to $30 based on the climate of international futures prices since November,” she told Reuters on Thursday………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

The oil price has dipped below $40 a barrel, reversing strong gains earlier in the week, as analysts warn the price of Brent crude will struggle to move higher as stockpiles begin to flood the market.
“Millions of barrels of extra oil” could enter the market in the coming weeks and scupper future price gains, according to analysts at Saxo Bank. Ole Hansen, head of strategy at Saxo, said that oil traders have been snapping up cheap crude and storing it while they wait for higher prices, when they will then cash in………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Oil at $35 a barrel is neither too high nor too low but just right to make shares of U.S. explorers worth buying, according to Goldman Sachs Group Inc. While prices of crude at that level are above cash costs of production, they will deter a rebound in shale output from occurring too early, the bank’s New York-based analysts including Brian Singer said in a report dated April 6.
Oil at $30 to $35 a barrel should keep the behavior of U.S. companies unchanged and help lift West Texas Intermediate to $55 to $60 a barrel in 2017, according to Goldman………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Iran’s foreign minister said on Thursday that Tehran was determined to regain its share of the oil market after sanctions imposed on the country were lifted under a deal reached with six major powers, the semi-official Tasnim news agency reported.
“Iran wants to regain its place on the oil market … in cooperation with other oil producing countries,” Mohammad Javad Zarif said after a meeting in Baku with Russian Foreign Minister Sergei Lavrov and Azerbaijan Foreign Minister Elmar Mammadyarov………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Because we trade ProShares Ultra Bloomberg Crude Oil and ProShares UltraShort Bloomberg Crude Oil as that relates to West Texas Intermediate (WTI), and because the words of OPEC largely influence those prices, the politics surrounding oil is immediately entertaining, and of special interest, to me.
In this case, I’m talking specifically about Saudi Arabia and Iran. Of course, there’s more going on in the oil space than just what we’re seeing from these two countries, but the price of oil has recently been influenced what Saudi Arabia has said about participating in a production freeze when OPEC meets with Russia on April 17………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Russia and the Organization of Petroleum Exporting Countries can reach an agreement to freeze oil production, even if Iran doesn’t join in, a top OPEC official told Bloomberg News. Kuwaiti OPEC governor Nawal al-Fezaia’s prediction of an output freeze excluding Iran in an interview with Bloomberg helped send oil prices soaring more than 5 percent on world markets on April 6 and 7.
Fezaia said oil-producing countries have no alternative but to reach an agreement to freeze output when they meet on April 17 in Doha, Qatar, because prices are too low………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Gold prices settled higher in U.S. trading Thursday amid a broader flight to quality, as investors bet the Federal Reserve would be cautious on raising interest rates given uncertainty about global economic growth.
Gold futures for June delivery, the most actively traded contract, rose 1.1% to settle at $1,237.50 a troy ounce on the Comex division of the New York Mercantile Exchange. Thursday’s action adds to a robust start to the year for gold futures, which are up some 17% so far………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Gold is seeing strong support at the $1210-$1215 an ounce level says newsletter writer Dennis Gartman. The famed market watcher explains in his Thursday edition of The Gartman Letter that there has also been strong resistance along the trend line that extends back into mid-March.
“A close today above $1,240 would be most impressive, just as a close today below $1,210 would be most depressive,” he says. Gartman adds, “Our ‘money’ is on the former however, and our enthusiasm would be greater were we to see signs that India is back in the gold market in size.” Kitco’s Spot Gold was last quoted up $17.30 at $1239.60………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Investors are welcoming gold funds back into their portfolios in a big way, encouraged by significant gold price rally and a low interest rate environment, Morningstar data shows. The gold price has rallied 16% year to date, and the funds in the precious metal equities sector are feeling the benefits.
The precious metals equity fund sector posted inflows of £193 million from December 2015 to February this year; its largest quarterly inflows in nearly three years as expectations for an interest rate rise in the UK faded. Omitting the inflows in December, the sector recorded a massive inflow of £185 million in the first two months of this year, according to Morningstar Direct………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Central-bank buying of gold is likely to continue although at a slower pace, with China setting the pace so far this year, said UBS Thursday. News organizations reported overnight that the People’s Bank of China boosted its holdings by 0.5% in March to 57.79 million ounces.
The buying coincided with a $10.3 billion increase in China’s foreign-exchange reserves to $3.21 trillion, more than analysts were expecting, UBS said. China has been consistently reporting gold buying over the last nine months………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

A feature in the world marketplace Thursday is the rally in the gold market. Safe-haven demand has again surfaced for the yellow metal as a referendum in the Netherlands on European Union-Ukraine trade relations has failed, prompting more concerns about the U.K. referendum in June to opt out of the European Union.
A U.K. exit from the European Union could spell the eventual doom for the EU. A weaker U.S. dollar index that hit a nearly eight-month low Thursday is also a positive for the precious metals markets on this day. June Comex gold was last up $14.70 at $1,238.30 an ounce. May Comex silver was last up $0.166 at $15.22 an ounce………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Gold’s surprising strength in price is capturing headlines, but another precious metal, silver, is chasing gold’s coattails – without the fanfare. Silver futures are up about 8.5 percent this year, making it stand out among other commodities and financial markets.
Investors snapped up coins, with U.S. Mint data showing March silver coin sales were up 17 percent over the previous year’s figure. Inflows into silver-backed exchange-traded funds witnessed their highest monthly inflow since December 2010, according to Commerzbank………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

The farther we get in 2016, the better the silver price outlook is. That’s promising news for investors seeking returns in an unstable commodities market. This fact may seem counterintuitive to most silver investors, though. That’s because they know the U.S. Federal Reserve plans to raise interest rates in 2016. And interest rates typically have an inverse relationship with the silver price.
Even so, there’s one trend that will cause silver prices to rise in 2016 despite the Fed’s meddling. But before we touch on this trend, let’s look at how interest rates affect the silver price………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Miners are selling everything from iron ore to coal but holding on to copper as they expect a shortage by the decade-end Copper is a precious metal these days. While top miners such as Anglo American and Glencore are selling anything from iron ore and coal to agricultural assets to pay down debt amid a rout in commodity prices, they’re loath to part with the best copper resources.
That’s because it’s one of the few metals expected to be in shortage by the end of this decade as cooling investment means not enough mines are built………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

‘Follow the money,” said Watergate informant Deep Throat to Robert Redford’s Bob Woodward in All The President’s Men. In the less cinematic world of retirement savings, an apt line could be “follow the fees.”
Compared with most mutual funds, exchange-traded funds, or ETFS, usually have lower fees. In fact, financial planner Shannon Lee Simmons at her Toronto-based company the New School of Finance believes that lower fees for ETFs override all other considerations for most people………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

The Peruvian market has delivered a stunning performance so far this year, thanks to a spurt in commodity prices. Peru is a commodity centric economy. In fact, it is one of the largest producers of gold and silver in the world.
The weakness in the global financial markets has helped precious metals, like gold and silver, to regain their sheen in 2016. Sluggish growth in China since the beginning of the year and the global oil market turbulence has lifted safe-haven demand. While SPDR Gold Trust ETF (GLD) has gained 15.2% year-to-date, iShares Silver Trust (SLV) has risen 7.7% (as of April 4,2016)……………………………………….Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

The Federal Government plans to revitalise commodity exchange in Nigeria as part of a comprehensive development programme for the nation’s agricultural sector. Vice President, Professor Yemi Osinbajo, made this known yesterday at the 1st National Economic Forum.
Osinbajo said the government would develop the commodity exchange system to support the development of the agricultural sector. He said government would revitalise the Abuja-based Nigeria Commodity Exchange (NCX) and other infrastructure and operators in the whole commodity exchange value chain………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

Smallholder farmers and other operators along the country’s agriculture value chain are set to rake in more returns on their investments following the assurance by members of the Ghana Securities Industries Association (GSIA) to support the Ghana Commodity Exchange (GCX).
GSIA, the umbrella body for brokerage firms in the country, backed the operations of the GCX and expressed the desire for the establishment of a robust regulatory and legal framework that will stimulate trading on the commodity exchange platform………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

The tactics Beijing used to win its war over the yuan may obfuscate the price it paid to get there. Beijing may want to declare “mission accomplished” in its war over the yuan. But the tactics it used may obfuscate the price it paid to get there.
China’s foreign-exchange reserves rose $10 billion in March to $3.22 trillion, breaking a disconcerting four-month depletion streak. Part of that can be chalked up to valuation effects. A rise in the euro rose made China’s holdings in that currency look larger when reported in dollars. Still, the numbers seem to show that—for now—Beijing no longer has to spend heavily to keep the yuan steady………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

The yen is up sharply against the dollar in April and for the year so far. What does that mean for global and U.S. markets if it continues, using history as a guide? Japan’s currency has rallied 10 percent year to date against the dollar and almost 3 percent thus far in April through Wednesday.
Investors traditionally buy the yen due to its reputation as a safe haven during times of global uncertainty. Using Kensho, a tool designed to quantify historical market events, CNBC Pro searched for what happens to markets when the Japanese currency strengthens 3.5 percent against the dollar over one month since 2010………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

ICAO blueprint criticised for having too many exemptions to be credible, too little detail to be trustworthy and for contradicting Paris climate deal. A draft UN plan to offset the air industry’s surging growth in emissions contains too many exemptions to be credible and too little detail to be trustworthy, European diplomats say.
Aviation is one of only two sectors not covered by the Paris climate agreement and many diplomats are optimistic that the UN International Civil Aviation Organisation (ICAO) blueprint can be whittled into shape before a Montreal conference this September………………………………………..Full Article: Source

Posted on 08 April 2016 by VRS |  Email |Print

As controversial government leaflet warns Brexit could undermine UK efforts to tackle climate change, leading think tanks highlight damage a vote to leave may do to green businesses. As the row over the potential implications of for both the environment and the economy continues to rumble on, the government and two leading think tanks have this week warned Brexit could undermine UK energy and climate policy, hampering investment and green business prospects in the process.
The government today sparked the latest angry exchanges with the Leave campaign with the news it is to spend £9m sending a leaflet to all 27 million households in the UK setting out the case for remaining in the EU………………………………………..Full Article: Source

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