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Commodities Briefing 19.Oct 2016

Posted on 19 October 2016 by VRS |  Email |Print

The world economy needs international trade to pick up, according to Reuters polls of hundreds of economists who see no end yet to the aggressive monetary stimulus through which central banks have tried to prop up inflation.
In recent months central banks from India to Britain to Brazil have become more accommodative with policy, leaving the U.S. Federal Reserve, which is widely expected to raise rates in December, looking like an outlier. Financial markets are already showing a sense of unease, with sovereign bond yields up from record lows, many stock markets looking shaky, and investors warily eying the price of oil, which appears to have awoken from a long slumber…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Australia’s growth prospects may be improving, say leading analysts, after a surprising rise in the prices of its biggest export commodities, coal and iron ore.
As the world’s largest coal exporter, Australia is a key winner from a dramatic rise in the price of internationally traded coal, which has jumped about 140% since the middle of this year, after Chinese mines slashed production. Since January, the price of iron ore, the country’s biggest export, has risen about 40%, also helped by cuts in output by less efficient producers…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

As the bear market in oil approaches its two-year anniversary, a consensus is growing that stagnant growth worldwide and aggressive pumping by giant producers like Saudi Arabia will keep a lid on oil prices for some time.
It’s an easy assessment to make. Large emerging economies like those of China, Brazil, India and Russia, which represent about a quarter of global demand for oil, are no longer booming, and it has become accepted wisdom that Saudi Arabia wants to keep prices low to wipe out higher-cost shale producers in the United States…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

The global oil industry needs an astronomic investment injection over the next two decades or risk jeopardizing it’s ability to meet future oil demand, the Organization of the Petroleum Exporting Countries warned on Tuesday.
Speaking at the “Oil & Money” conference in London, the cartel’s Secretary-General Mohammed Barkindo said the recent oil crash has already taken a serious toll on investments, particularly the exploration-and-production sector, and poses a “serious threat” to both producers and consumers…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Oil shrugged off data forecast to show U.S. stockpiles gained a second week, edging back above the $50 level where prices have hovered since rallying on OPEC’s decision to cut output last month. Jefferies Equity Analyst Jason Gammel discusses the outlook for oil with Guy Johnson in London and Caroline Hyde in Berlin on “Bloomberg Markets: European Open.”.……………………………….Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

OPEC has put Iran’s oil output figure about 250,000 barrels per day less than the real volume, Ali Kardor the managing director of Iranian National Oil Company told Trend. According to OPEC’s latest monthly report based on the secondary sources, Iran produced about 3.65 million barrels per day (mb/d) of crude oil in September.
Kardor said that the country’s real crude oil output is 0.25 mb/d more than OPEC’s estimation. He said during the sideline of an energy conference in Tehran that currently Iran exports 2.05-2.1 mb/d of crude oil…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

When the bosses of the world’s biggest oil companies gather in London on Tuesday, they might have the urge to track down the Saudi energy minister and shake him by the hand.
After two years pursuing a Saudi-led strategy to pump without limits, pummeling industry earnings, OPEC has unexpectedly come to the aid of the oil majors. Last month, it surprised the market by deciding to cut production and put a floor under volatile crude prices…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Gold prices have enjoyed a hefty climb so far this year as the market continues to guess the pace and timing of the next U.S. interest-rate hike, but the battle for the U.S. presidency is set to take center stage as Election Day nears.
And it doesn’t matter if Republican Party nominee Donald Trump or Democratic Party nominee Hillary Clinton moves on to be the next president of the United States—gold is likely to come out a winner, George Milling-Stanley, head of gold investment strategy at State Street Global Advisors, told MarketWatch…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

In the past one month, gold has seen a tremendous fall. From close to $1,350 an ounce, it has drifted to the $1,250 an ounce mark. The sudden and sharp decline in the metal was due to the negative sentiment in the gold market.
The possibility of an interest rate rise is affecting precious metals. Gold, silver, platinum, and palladium have fallen about 5.3%, 8.5%, 10.3%, and 2.7%, respectively, on a 30-day trailing basis. The fall may also be due to speculators cutting bets on higher prices of precious metals. Some analysts also assume a level below $1,250 to be a strategic buying opportunity…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

The gold market will be subject to some nervousness in the fourth quarter of this year due to growing investor fears about the Federal Reserve raising rates in December, Sucden said. Still, the broker believes the metal will ultimately pass the test, it said on Tuesday, October 18 in a quarterly report produced in partnership with Metal Bulletin.
It expects gold prices to trade in a range of $1,230-1,420 per oz over the fourth quarter of the year – the uptrend that started late in 2015 is set to continue over 2017…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

While gold’s performance in the immediate future may hinge on economic data and Federal Reserve rate-hike expectations, analysts with TD Securities “still see a place in many portfolios” for the yellow metal.
Gold has fallen in October, but expectations for a December Federal Reserve rate hike are already factored into the market and many longs have already exited the futures, which may help the metal now hold chart support, TDS says. If U.S. economic data are strong, gold and silver could probe still lower. ………………………………..Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Metals investors wonder what this presidential election will mean for gold and silver markets. Since Nixon closed the gold window in 1971 and the years of price inflation that followed, presidents have largely ignored gold, the Federal Reserve, and other issues related to sound money.
Today, the devaluation of the Federal Reserve Note – the explosion of debt and the eternal deficits which enrich bankers and the political class at the expense of the rest of us – is getting harder to ignore…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Nickel led gains in industrial metals as a surge in new credit in China pointed to a stabilizing economy in the world’s biggest commodities buyer.
Aggregate financing of 1.72 trillion yuan ($255 billion) in China last month exceeded a median estimate of 1.39 trillion yuan in a Bloomberg survey. Metals also advanced as the dollar weakened, making materials priced in greenbacks cheaper for buyers using other currencies…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Copper is also inversely related to US dollar since copper is traded in US currency so any appreciation in US dollar will have negative impact on copper prices. In 2016, MCX Copper has rallied by 1.85% while COMEX copper has rallied by 3%, making it the worst performing base metal, while commodities like zinc and lead have appreciated by 55% and 42%.
Other base metals like aluminum and nickel all have posted double-digit gain this year. Copper has been underperformer this year and sentiment may remain sluggish next year also on back of China’s decline in refined imports as their domestic production of copper is increasing…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Metallurgical coal is extending the record-breaking run that’s made it the best-performing commodity this year. Spot hard coking coal rose $6.30, or 2.8 percent, to close at $232.60 a metric ton on Monday, according to data from The Steel Index.
That’s a record high for the index that started in January 2013. RBC Capital Markets this week raised its price forecasts for 2017 and 2018 by more than 50 percent on a shortage that’s estimated to extend until rebalancing occurs in three years…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Investec has released a note in which it says China, and in particular, Chinese government policy is the main driver in the recovery of the mining sector along with selected commodities this year.
The broker cited coal as a particular example where Chinese ’supply restrictions’ have had a material impact on prices. Metallurgical coal is the best performing commodity this year, easily outstripping the performance of gold and silver…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

BlackRock took the step of slashing fees in an effort to gain ETF market share, and so far, the strategy is paying off. Bloomberg Intelligence’s Eric Balchunas explains on “Bloomberg Daybreak: Americas.”.……………………………….Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

It ranks as one of the most disingenuous claims ever made by a modern British politician. Buffeted by a balance of payments crisis, Britain was forced in 1967 to devalue the pound by nearly 15 percent against the dollar, prompting the then-prime minister, Harold Wilson, to try to reassure a skeptical public that it “does not mean that the pound here in Britain, in your pocket or purse, or in your bank, has been devalued.”
Britons soon found otherwise, as living standards were hit and prices skyrocketed because much of what consumers bought, including a bulk of their food, was imported…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

The yuan is becoming a destabilizing factor in the foreign exchange market amid renewed speculation that China’s authorities would tolerate a weaker currency to support the economy.
The Chinese currency has been depreciating at a faster pace since the end of the National Day holiday period in early October, spurring speculation that it could even hit 7 to the dollar. The trend could throw the market into turmoil by triggering a devaluation war with other Asian currencies…………………………………Full Article: Source

Posted on 19 October 2016 by VRS |  Email |Print

Greater global cooperation through carbon trading could reduce the cost of climate change mitigation by 32% by 2030, according to a World Bank report.
The State and Trends of Carbon Pricing 2016 report was released by the bank at an international carbon event in Vietnam. New modeling analysis undertaken for the report shows that increased international carbon trading could enable large-scale emissions reductions at much lower cost than at present…………………………………Full Article: Source

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