Thursday, October 15, 2009

Newfield Exploration (NYSE:NFX) Upgraded to Outperform by Wells Fargo

Wells Fargo (NYSE:WFC) announced that it has upgraded Newfield Exploration (NYSE: NFX) from Market Perform to Outperform, and increased its target range from $35-$40 to $56-$60.

According to Wells Fargo, it's decision was based on Newfield's exploration potential, discount of valuation, operational catalysts and growing focus on oil.

Especially noted by Wells Fargo was Newfield's Monument Butte & Bakken programs which are the chief area where it's exposure to oil is located.

Natural gas also continues to play a major part in its valuations, as it accounts for 54 percent of Newfield's portfolio, while crude stands at 46 percent.

It was also felt by Wells Fargo that the Monument Butte asset in the Uinta Basin held by Newfiled Exploration is highly undervalued by the street, another significant factor in its upgrade of the company stock.

Friday, October 9, 2009

Chinese Buying Up More Gold

As gold prices hit new record highs, that hasn't deterred the Chinese government and individual Chinese investors from continuing to plow a lot of money into the yellow metal.

And the fact that retail jewelry built from gold has taken a hit has largely been shrugged off by the market, as that hasn't really been much of a factor ever in determing gold prices, especially in volatile economic times.

Consequently, investment in gold is the only driver of gold prices at this time, and with the economic conditions we face, there's no doubt gold prices will rise for many years to come, with occasional and obvious corrections as it goes along. But the curve will continue to be up with occasional dips in gold prices.

The Chinese government is also looking for places to place their money, and have been buying up large amounts of gold for some time, although with all of that, there's plenty of room for more, as at this time only about 1.6 percent of the china's forex reserves are held in gold.

Most Chinese believe their is significant upside to gold prices, and aren't going to cut back in their acquisitions of gold any time soon.

Jim Rogers | Gold Over $2,000

We've heard a lot of talk about the price of gold and where it'll end up going to, and the latest to make their prediction is Jim Rogers from Rogers Holdings and other companies, who says in a decade gold should go over $2,000 an ounce.

Another person predicting extraordinary increase in gold prices is Peter Schiff, who has asserted gold could top $5,000 before things settle down.

Rogers has also said for some time that commodity prices will rise for years into the future as growing demand won't be able to be met by supply.

Another major factor in ensured rising commodity prices is the fact very little in the way of new production capacity has been built over the last 30 years, and because in most cases it takes approximately 10 years to bring production online, it'll be some time before supply in many commodities will be able to meet demand.

Thursday, October 8, 2009

Jim Rogers Points to Agriculture, Silver and Palladium as Good Commodity Investments

While most of us that know Jim Rogers are familiar with his bullish outlook on agriculture, but he has been slow to add anything else to what he thinks will be big movers, other than saying all commodities over time will rise as demand from emerging middle classes in Asia drive up the prices.

But he has broken with his generalities to give his thoughts on what other specific commodities look good in the short term, and they are silver and palladium.

I do know a lot about silver and know that has a great short- and long-term future for prices going higher. But palladium I'm not as knowledgeable about, and so it was good to hear Rogers mention it, as it will get me to do some research to see why he's bullish on it now.

Rogers major reason for overall commodity bullishness is the demand factor from Asia, but also the fact that expansion of commodity production capacity has been almost zero, and so the supply will not be able to meet the demand, so commodity prices will continue to rise.

Wednesday, October 7, 2009

Commodities Rise on Dollar Collapse

As the U.S. dollar continues to plunge in value, commodities and stocks related to commodities continue rise in price, as investors flee the greenback and look to energy, raw materials and related stocks to hedge against its continuing demise.

Also benefiting from the fall of the U.S. dollar are multinational companies, which are also targets of investors. Of course foreign manufacturers are getting nervous, as their products are costing more with the collapse of the dollar, and they lose sales as their price competitiveness in America declines.

Most believe the stock market will remain volatile for some time, and will largely move in conjunction with the ups and downs of the U.S. dollar, which means it'll probably move up as the dollar over the long term moves down.

Taking into account the flight to safety and hedge against inflation, along with the ongoing collapse of the U.S. dollar, and the emerging middle classes in China, India, and other places in Asia, and you can see why commodities will continue to soar for years into the future.

Gold Prices Break Another Record

Gold prices rose to another record high, as it closed at $1,050 a troy ounce, as gold investors at this time are shrugging off the idea that there will be a correction.

Since August the price of gold has soared by over 10 percent, some thinking it is headed for $1,500, and over the long term projections have been as high as $5,000, with Peter Schiff offering that as a real possibility for gold prices.

The continuing plunge in value of the U.S. dollar, along with the fears of inflation, seem to be keeping investors in the gold game rather than taking profits.

Some in the gold industry have looked at the falling demand for jewelry in a number of nations, including India, Italy and Turkey, among others, as a reason to be concerned over the price of gold holding, but in reality, the price movements of gold are far less dependent on jewelry demand than a hedge against inflation and holding on to your money, which in times like we're living in is more relevant.

Jim Rogers has said he wouldn't buy gold while it's hitting record highs, but at the same time he's also not thinking in terms of betting against it either. He's basically waiting for the price to drop and then he'll buy more, knowing over the long term there is a lot of upside for gold before it begins to level out.

Another interesting point is while gold has reached record levels when measured against the U.S. dollar, against other currencies it is still far from reaching its highs. For example, it's 30 percent below former highs against the Australian dollar and 15 percent below highs it has hit against the yen.

Peter Schiff Bullish on Agriculture

Peter Schiff Likes Agriculture

A number of highly qualified investors have been bullish on agriculture for some time, and the latest maintaining that position is Peter Schiff, who said in a recent interview on CNBC that he is especially bullish on the agricutural industry in general, and also the fertilizer industry within those parameters.

Confirming what we talk a lot about on Commodity Surge, Schiff added that the Chinese will continue to buy up commodities as their standard of living continues to rise, and their growing middle class will create great demand for commodities going forward.

Another interesting insight from Schiff is the reason stock prices are rising at this time isn't because of stocks going up because of increased value, but because the U.S. dollar is going down. The dollar's collapse and decreased value is the determing factor there, according to Schiff.

Talking about Wal-Mart (NYSE:WMT), Schiff made an interesting observation I've never heard before, and that is that Wal-Mart could become the next Saks Fifth Avenue based on their inability to import cheap products from the Chinese any longer.

Investor Jim Rogers has also been bullish on agriculture for years, and looks upon it as the growth vehicle for the future, based primarily on less land available for crops and growing demand.

Peter Schiff Likes Agriculture

Tuesday, October 6, 2009

Silver Prices About to Explode?

Taking into account that about 150 million ounces of silver have been officially acquired this year, which represents about 20 percent of all silver production in 2009 so far, as well as 25 percent of all silver mine production. (The difference is recycling.)

Unofficially, it's thought that tens of millions of ounces of silver has been acquired since the beginning of the year, besides direct buying by investors.

Even more extraordinary, this represents approximately 15 percent of all known silver bullion known to exist at this time.

Taking into account the rising number of industrial uses silver is increasingly being used for, and some of the products it can't be recovered from, and we could have the perfect storm for increasing silver prices for a long time to come.

Monday, October 5, 2009

One Investor Corners Tin Market

Tin Market Turmoil

An unknown investor has boght up thousands of tons of tin last week, and has stored it in warehouses all over London. Reports are that basically the entire stocks of tin listed on the London Metals Exchange (LME) were acquired during the past week by that one buyer, who most assume is a hedge fund.

Some buyers of tin and other investors are whining about this, but the LME said the reason they are isn't because there's something wrong with the tin market, but because they guessed wrong as to the direction the prices would move, and it adds that they've been publishing the needed data to make informed decisions, so complaints are not legitimate.

AS far as the strategy of the mysterious tin buyer, they've either done it with the belief that the growing demand and acquisition of tin by Asian countries will continue to drive up prices, and so they bought the lot to take advantage of the real possibility, or an attempt to get some quick, short-term gains.

Although the secret tin investor has a dominant position at this time, and has a limited control of prices, they are playing a risky game that could backfire if they aren't careful. Sellers of tin are enjoying this period of time, but that will probably change some time soon, and there is some evidence that the tin buyer has already started selling its tin.

Tin demand is expected to rise to 320,000 tons this year, up from 300,000 last year.

Tin Prices Rising

BofA: Gold at $1,500 by 2011

Gold Prices Going UP

While Peter Schiff has said gold could go as high as $5,000 and ounce, and maybe more, in the short term there is still a good chance that it'll go up significantly, as some BofA (NYSE:BAC) researchers are looking at gold reaching $1,500 an ounce by 2011, saying as oil prices begin to move up again, gold will go with it.

With inflation probably higher than governments admitting to, it's only a matter of time till gold really takes off, and is doing very well in these times as it is.

Concerns are that oil prices will skyrocket because the lack of funding has cut back on production, and that will catch up with us and drive prices up as supply won't be able to meet demand.

Gold Prices Going Up

Thursday, October 1, 2009

Commodity Prices Surge on Demand

A falling and collapsing U.S. dollar, along with growing demand for oil has helped push up commodity prices, helping to rescue a poor performance by commodities in the third quarter.

Much of the six percent increase in oil prices came from government data showing gasoline inventories had dropped in the United States, catching some by surprise and pushing up prices. Gasoline demand also increased, having an effect on prices.

With the U.S. dollar also continuing to plunge in value, it spurred buying in other commodity sectors like sugar, cocoa, gold and copper, which also increased in price as investors took advantage of dollar-denominated commodities, which were cheaper as a result.

This will continue to go on once real recovery begins, as emerging middle classes in Asia drive demand for commodities for a long time into the future.