The boom in equities has resulted in investors abandoning gold positions as they feel safer than they have since 2008. Receiving some of that capital inflow are commodity ETFs with exposure to a wider array of materials.
According to Lipper, which tracks funds, "General Commodities Funds" received over $1 billion in February, as the price of gold has been under heavy pressure. That follows a decent January as well, where the amount was slightly over $1 billion in inflows to the general commodities funds. The February inflows were the highest in almost a year.
Precious metals funds on the other hand had outflows of just under $4 billion in February, following the $765 million in outflows in January. The $4 billion in outflows from precious metals funds was the highest since Lipper began tracking them in 2004.
The vast majority of precious metal ETF outflow was from the SPDR Gold Trust , the world's largest gold-backed ETF.
In the first couple of weeks of March, over $1 billion more in outflows from precious metals ETFs occurred.
Lipper analyst Matt Lemieux, who compiled the data, said this, "If you find gold isn't your place to be now and don't want to move all your money to equities and other high-yielding products, then the more-diversified and actively-managed General Commodities Funds might be for you."
Leading in commodity-based ETFs was PIMCO's Commodities PLUS Strategy Fund, which had inflows of $264 million in February. Behind them in second was the Fidelity Series Commodity Strategy Fund which took in just under $210 million.
For SPDR Gold, the outflow for February was $3.8 billion.
In general, precious metals ETFs have significant outflows as of March 13, with almost $1.3 billion taken out so far.
It's likely that most of this won't change too much until the disaster that is the EU is brought back into the media headlines.
It's almost inconceivable that the largest economic region in the world is being ignored, being the financial disaster it continues to be. After all, look what tiny Cypress did when the focus latched on to it.
Showing posts with label Precious Metals. Show all posts
Showing posts with label Precious Metals. Show all posts
Tuesday, March 19, 2013
Monday, February 11, 2013
Goldman: Precious Metals, Livestock to Lead Commodities Over Next Year
Goldman Sachs (NYSE: GS) predicts over the next 12 months, livestock and precious metals will lead commodities to about a 1.1 percent jump in prices.
Precious metals will climb the most according to Goldman, estimating a jump of 5 percent, while it sees livestock prices rising 4.5 percent during the same period.
In other commodity sectors, Goldman sees energy increasing 2 percent; industrial metals will drop by 1 percent; and agriculture in general will fall 3.5 percent.
“Renewed optimism has been mostly based on momentum and forward-looking survey data and far less on hard data and physical markets, which remain lackluster,” Goldman analyst Jeffrey Currie wrote in the report. “We are maintaining our price targets and recommendations and will wait for hard data and physical markets to confirm the optimism before raising estimates.”
Citing the Chinese housing completion cycle, Goldman suggest investors acquire copper. The financial giant also sees benefit in taking a position in the Brent GSCI Index in order to take advantage of the low crude inventories which has produced backwardation.
Rolling over nearby contracts to longer contracts will result in profitable returns, said Goldman.
Precious metals will climb the most according to Goldman, estimating a jump of 5 percent, while it sees livestock prices rising 4.5 percent during the same period.
In other commodity sectors, Goldman sees energy increasing 2 percent; industrial metals will drop by 1 percent; and agriculture in general will fall 3.5 percent.
“Renewed optimism has been mostly based on momentum and forward-looking survey data and far less on hard data and physical markets, which remain lackluster,” Goldman analyst Jeffrey Currie wrote in the report. “We are maintaining our price targets and recommendations and will wait for hard data and physical markets to confirm the optimism before raising estimates.”
Citing the Chinese housing completion cycle, Goldman suggest investors acquire copper. The financial giant also sees benefit in taking a position in the Brent GSCI Index in order to take advantage of the low crude inventories which has produced backwardation.
Rolling over nearby contracts to longer contracts will result in profitable returns, said Goldman.
Tuesday, June 12, 2012
Silver Wheaton (SLW) CEO Says Silver Will See More Pressure
In an interview, Silver Wheaton (NYSE: SLW) CEO Randy Smallwood said he believes precious metals, including silver, should remain under pressure over the short term because of the ongoing economic crisis in Europe.
“Any strength that comes into the dollar impacts silver." Consequently, over the short term they will “probably see a bit of pressure in the short term,” concluded Smallwood.
Because commodities are acquired in U.S. dollars, those residing outside the United States will pay more for precious metals when the dollar strengthens.
Commenting on the financial health of silver miners, Smallwood added that they're having difficulty acquiring capital because of the fall in price of silver.
The problem is the type of capital being made available via loans would dilute the equity of the miners, something they don't want to participate in.
Smallwood didn't say anything in regard to this, but it does make one wonder if this is an excellent time for Silver Wheaton to enter into more streaming agreements with the miners because of the tight lending market.
The faltering euro zone is also connected to this, as European banks were the top lenders to the miners, and with the challenges there they've tightened up their lending.
Over the long term, because of the growing industrial demand and uses of silver, along with the lower recycling rates, Smallwood says he's extremely "bullish" on the metal over the long haul.
Silver Wheaton closed Tuesday at $27.92, climbing $1.03, or 3.83 percent.
“Any strength that comes into the dollar impacts silver." Consequently, over the short term they will “probably see a bit of pressure in the short term,” concluded Smallwood.
Because commodities are acquired in U.S. dollars, those residing outside the United States will pay more for precious metals when the dollar strengthens.
Commenting on the financial health of silver miners, Smallwood added that they're having difficulty acquiring capital because of the fall in price of silver.
The problem is the type of capital being made available via loans would dilute the equity of the miners, something they don't want to participate in.
Smallwood didn't say anything in regard to this, but it does make one wonder if this is an excellent time for Silver Wheaton to enter into more streaming agreements with the miners because of the tight lending market.
The faltering euro zone is also connected to this, as European banks were the top lenders to the miners, and with the challenges there they've tightened up their lending.
Over the long term, because of the growing industrial demand and uses of silver, along with the lower recycling rates, Smallwood says he's extremely "bullish" on the metal over the long haul.
Silver Wheaton closed Tuesday at $27.92, climbing $1.03, or 3.83 percent.
Thursday, July 22, 2010
BHP (NYSE:BHP) Wary of Short Term Global Economic Outlook
BHP Billiton (NYSE:BHP) said in a recent production report they are wary of the short-term outlook for growth, especially in mature markets, with European nations putting austerity measures in place to combat the sovereign debt crisis.
Prospects in the United States aren't looking good, and China is taking measures to combat their urban property crisis, which has overheated in a big way.
China will continue to grow, just at lower levels than the recent past, contrary to a few recent reports they're going to allow the property market to go forward as it was. That's just wishful thinking and attempts to get investors to put their money in dubious companies and funds.
BHP said this in their production report, "Uncertainty surrounds the near-term prospects for growth in the developed world as governments adjust fiscal policies following a period of significant stimulus and subsequent increase in sovereign debt levels. Within China, measures introduced to reduce growth to more sustainable levels means volatility in commodity end-demand is likely to persist. BHP Billiton sees these measures as a normal continuation of China's economic management policies,"
In other words, over the short term there is very little to bring optimism to the demand factor of a number of raw materials, and that's going to show in the results of companies like BHP.
While we'll see some good quarterly reports for the last quarter, like with Freeport-McMoRan (NYSE:FCX), that was based on commodity prices last quarter. Since then a number of metals and other commodities have fallen, and that's pointing to a tough quarter next time around.
Prospects in the United States aren't looking good, and China is taking measures to combat their urban property crisis, which has overheated in a big way.
China will continue to grow, just at lower levels than the recent past, contrary to a few recent reports they're going to allow the property market to go forward as it was. That's just wishful thinking and attempts to get investors to put their money in dubious companies and funds.
BHP said this in their production report, "Uncertainty surrounds the near-term prospects for growth in the developed world as governments adjust fiscal policies following a period of significant stimulus and subsequent increase in sovereign debt levels. Within China, measures introduced to reduce growth to more sustainable levels means volatility in commodity end-demand is likely to persist. BHP Billiton sees these measures as a normal continuation of China's economic management policies,"
In other words, over the short term there is very little to bring optimism to the demand factor of a number of raw materials, and that's going to show in the results of companies like BHP.
While we'll see some good quarterly reports for the last quarter, like with Freeport-McMoRan (NYSE:FCX), that was based on commodity prices last quarter. Since then a number of metals and other commodities have fallen, and that's pointing to a tough quarter next time around.
Monday, July 12, 2010
Freeport (NYSE:FCX) Getting Hammered Before Alcoa (NYSE:AA) Earnings Report
In anticipation of an expected poor showing by Alcoa (NYSE:AA) for the quarter, Freeport-McMoran (NYSE:FCX) stock has been hit hard in trading, dropping $62.99 as of 1:26 PM EDT, a 4.53 percent plunge.
Expectations from Alcoa are for 12 cents a share for earnings, downwardly revised from prior estimates as high as 19 cents a share. Other analysts have them down as low as 10 cents a share in earnings for the quarter.
For Freeport, some of their downward movement could be related to profit-taking after a strong week.
But most of it is probably the lack of confidence in Alcoa's performance, which would reveal similar vulnerability in Freeport, which has similar exposure to the same global demand for metals as Alcoa has.
On the other side, if Alcoa surprises in its performance, Freeport could participate in a nice upward move too.
Either way, traders are ready to pounce on these stocks either way once the numbers of Alcoa are revealed.
Expectations from Alcoa are for 12 cents a share for earnings, downwardly revised from prior estimates as high as 19 cents a share. Other analysts have them down as low as 10 cents a share in earnings for the quarter.
For Freeport, some of their downward movement could be related to profit-taking after a strong week.
But most of it is probably the lack of confidence in Alcoa's performance, which would reveal similar vulnerability in Freeport, which has similar exposure to the same global demand for metals as Alcoa has.
On the other side, if Alcoa surprises in its performance, Freeport could participate in a nice upward move too.
Either way, traders are ready to pounce on these stocks either way once the numbers of Alcoa are revealed.
Monday, June 28, 2010
Peter Schiff Bullish on Precious Metals, Oil
Peter Schiff stated recently that while he is heavily invested in gold, he is also bullish on other precious metals, and oil as well.
Specific metals identified by Schiff were platinum and silver, although he added he is also bullish on some industrial metals too.
The Gulf oil accident with BP (NYSP:BP) is particularly noteworthy in Schiff's estimate of oil in general, and he said the costs of offshore drilling will skyrocket, including insurance.
There will also be less oil because of the moratorium in the Gulf, which will decrease production if that isn't changed.
Demand for oil from China is a factor as well. So combining what appears to be increased demand and lower supply, and there is nowhere for oil prices to go but up, in Schiff's view.
Specific metals identified by Schiff were platinum and silver, although he added he is also bullish on some industrial metals too.
The Gulf oil accident with BP (NYSP:BP) is particularly noteworthy in Schiff's estimate of oil in general, and he said the costs of offshore drilling will skyrocket, including insurance.
There will also be less oil because of the moratorium in the Gulf, which will decrease production if that isn't changed.
Demand for oil from China is a factor as well. So combining what appears to be increased demand and lower supply, and there is nowhere for oil prices to go but up, in Schiff's view.
Thursday, May 27, 2010
Teck Resources (TSE:TCK-B) Rises with Metal Prices
Teck Resources (TSE:TCK-B) (NYSE:TCK) was up in Toronto and New York today as copper and other industrial metals all rose on news the U.S. economy may possibly continue growing, based on industrial demand.
Along with copper surging, other base metals increasing in price were aluminum, tin, lead, zinc and nickel.
All of this if fine, but I am still sceptical on the sustainability of all of this, and whether or not some temporary data comes out positive, like it just has, to massage those numbers of confirmation of a sustainable recovery is suspect at best.
Anyone announcing a sustainable recovery at this early stage is either incompetent or dishonest.
We have a long way to go with the European sovereign debt crisis and potential fallout from China fighting inflation before we can announce there is a recovery at all, let alone a sustainable one.
Along with copper surging, other base metals increasing in price were aluminum, tin, lead, zinc and nickel.
All of this if fine, but I am still sceptical on the sustainability of all of this, and whether or not some temporary data comes out positive, like it just has, to massage those numbers of confirmation of a sustainable recovery is suspect at best.
Anyone announcing a sustainable recovery at this early stage is either incompetent or dishonest.
We have a long way to go with the European sovereign debt crisis and potential fallout from China fighting inflation before we can announce there is a recovery at all, let alone a sustainable one.
Tuesday, May 25, 2010
Bank of America (NYSE:BAC) Upgrades RTI (NYSE:RTI), AK Steel (NYSE:AKS)
Metal stocks were back in favor today, as Citigroup (NYSE:C) and Bank Of America (NYSE:BAC) both upgraded AK Steel (NYSE:AKS), with Bank of America analyst Kuni Chen adding RTI International Metals (NYSE:RTI) as an upgrade as well.
Most of the change in opinion on metals stocks is related to the idea that there has been an overresponse to market conditions, and the stocks have a higher value than the market is giving them.
Overall, the metal sector enjoyed a good day, with most stocks talked about in reference to being undervalued were in the positive at close.
The upgrades should help RTI and AK Steel, which have been hit hard recently.
Most of the change in opinion on metals stocks is related to the idea that there has been an overresponse to market conditions, and the stocks have a higher value than the market is giving them.
Overall, the metal sector enjoyed a good day, with most stocks talked about in reference to being undervalued were in the positive at close.
The upgrades should help RTI and AK Steel, which have been hit hard recently.
Thursday, May 20, 2010
Lundin Mining (TSE:LUN) Down as Base Metal Stocks Take Hit
Lundin Mining (TSE:LUN) (OTC:LUNMF.PK) dropped 7.89, or $0.30 a share in Toronto, and 9.84 percent, or $0.36 a share in New York, as metals stocks continue to have downward pressure on share price with investors going temporarily to cash for safety with gold going through a correction with investors taking profits.
Another key element in metals prices and miners taking hits is the uncertainty surrounding how the battle against inflation in China will hurt metals demand, as well as the fallout in Europe from their debt crisis, where it is uncertain whether or not the region can handle it, and that, too, could have a dramatic impact on demand for precious metals.
Lundin reported recently that they had turned things around since last year, generating a profit of $38 million, against a loss last year during the same quarter of $8.6 million.
They also reached an agreement last Friday with unions concerning their Neves-Corvo copper mine in Portugal.
Another key element in metals prices and miners taking hits is the uncertainty surrounding how the battle against inflation in China will hurt metals demand, as well as the fallout in Europe from their debt crisis, where it is uncertain whether or not the region can handle it, and that, too, could have a dramatic impact on demand for precious metals.
Lundin reported recently that they had turned things around since last year, generating a profit of $38 million, against a loss last year during the same quarter of $8.6 million.
They also reached an agreement last Friday with unions concerning their Neves-Corvo copper mine in Portugal.
Freeport-McMoRan (NYSE:FCX) Plunges Over 6 Percent
Investors continue to flee the precious metals sector, and Freeport-McMoRan (NYSE:FCX) has been taking it on the chin as a result, today alone dropping by 6.01 percent, or $4.07 in the trading session.
Volume was also high for the day, reaching 28,331,709, far above the 3-month average of 15,057,400.
Freeport ended the day in New York at $63.62.
We may be getting close to the downward movement in price becoming a buying opportunity, although I would never recommend attempting to time or wait till prices reach their absolute bottom, as we can lose a lot of money that way if the price rebounds quickly, which in the cas of Freeport-McMoRan, it probably will.
If we can get in at a good price, we need to forget about the rest and take the gains we do get.
Volume was also high for the day, reaching 28,331,709, far above the 3-month average of 15,057,400.
Freeport ended the day in New York at $63.62.
We may be getting close to the downward movement in price becoming a buying opportunity, although I would never recommend attempting to time or wait till prices reach their absolute bottom, as we can lose a lot of money that way if the price rebounds quickly, which in the cas of Freeport-McMoRan, it probably will.
If we can get in at a good price, we need to forget about the rest and take the gains we do get.
Monday, May 17, 2010
Iridium, Rhodium and Ruthenium May Break Out
Any change in demand for minor precious metals such as iridiumm, rhodium and ruthenium can move the prices up or down very quickly, and it looks like these three metals could have some strong upside this year, although the recent debt crisis in the EU and China's need to battle rising inflation, have added somewhat of a shadow over the group.
Industrial demand had been picking up, giving all three possibilities of moving upwards, but again, the changing economic conditions have skewed that a little, although the fundamentals seem to be sound going forward, although it's a matter of how strongly they'll perform in light of the fears swirling around the markets.
Demand for raw materials in general is suspect now, not that there will necessarily be a huge pullback, but if there is a slowdown of even 1 percent or a little more, that's enough to changes things up quite a bit, especially with the minor metals.
The problem all three of these metals face at this time is the pace of how the prices have been rising, which seems to be too quickly in relationship to the demand picture. That implies there are speculators influencing the market to some degree, so we'll have to keep up with the demand picture to be sure the prices accurately reflect the market before putting out money down.
That means we'll probably have to wait for at least a small correction of some type, while watching the EU and China as to whether they're cutting back on importing these metals or not.
Industrial demand had been picking up, giving all three possibilities of moving upwards, but again, the changing economic conditions have skewed that a little, although the fundamentals seem to be sound going forward, although it's a matter of how strongly they'll perform in light of the fears swirling around the markets.
Demand for raw materials in general is suspect now, not that there will necessarily be a huge pullback, but if there is a slowdown of even 1 percent or a little more, that's enough to changes things up quite a bit, especially with the minor metals.
The problem all three of these metals face at this time is the pace of how the prices have been rising, which seems to be too quickly in relationship to the demand picture. That implies there are speculators influencing the market to some degree, so we'll have to keep up with the demand picture to be sure the prices accurately reflect the market before putting out money down.
That means we'll probably have to wait for at least a small correction of some type, while watching the EU and China as to whether they're cutting back on importing these metals or not.
Friday, May 7, 2010
Freeport McMoRan (NYSE:FCX), Southern Copper (NYSE:SCCO) Down on China Concerns
Metal stocks like Freeport McMoRan (NYSE:FCX) and Southern Copper (NYSE:SCCO) have been hit hard on concerns over the possibility of a slowdown in China, which has cuased the companies to fall by over eight and nine percent respectively in the last few days.
China is battling its own potential housing bubble problems, and have been raising interest rates and cutting back on allowing third homes for borrowers.
That has investors fearing the measures could cut back on the need of raw materials, which of course would hammer the metals companies which are so reliant on China.
Even it this doesn't result in a bubble, companies and investors will have to take into consideration the levels of demand for commodities won't continue on at this pace, even in China.
China is battling its own potential housing bubble problems, and have been raising interest rates and cutting back on allowing third homes for borrowers.
That has investors fearing the measures could cut back on the need of raw materials, which of course would hammer the metals companies which are so reliant on China.
Even it this doesn't result in a bubble, companies and investors will have to take into consideration the levels of demand for commodities won't continue on at this pace, even in China.
Tuesday, May 4, 2010
US Steel (NYSE:X), AK Steel Holding (NYSE:AKS), Southern Copper (NYSE:SCCO) Indicate Slow Economy
US Steel (NYSE:X), AK Steel Holding (NYSE:AKS) and Southern Copper (NYSE:SCCO) have been getting clobbered lately, and that's a telltale sign the economy is grinding to a halt with little demand for metal products.
This coincides with the fact that the construction industry, and other large industries using metals, are projected to be down in demand, with the possible exception of the auto industry, although I wouldn't count on much there, as even if demand does increase, it won't make up for the numerous other industries expected to decrease orders.
What this seems to imply is the effects of the stimulus program are diminishing, and the reality of the markets are taking over, and the results are telling us it didn't take hold, as many expected, and now we probably must face the fallout from demand being determined by the market and not artificial government props.
This coincides with the fact that the construction industry, and other large industries using metals, are projected to be down in demand, with the possible exception of the auto industry, although I wouldn't count on much there, as even if demand does increase, it won't make up for the numerous other industries expected to decrease orders.
What this seems to imply is the effects of the stimulus program are diminishing, and the reality of the markets are taking over, and the results are telling us it didn't take hold, as many expected, and now we probably must face the fallout from demand being determined by the market and not artificial government props.
Friday, April 2, 2010
JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS) Commodities Trading
Commodities Trading
The proposal by Commodity Futures Trading Commission head Gary Gensler could be a devasting blow to commodity traders like JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS) which have counted on commodities trading as a major portion of their revenue, which in the case of Goldman Sachs is ten percent of their total revenue over the last several years.
For J.P. Morgan, they said in their recent letter to shareholders that the commodities trading business for the company has more than doubled since 2006.
Two important commodities sectors Gensler wants to put limits on are metals and oil contracts, allowing only double the volume of other commodity investors.
In other carnage Gensler wants to impose on the commodities market, he also is pushing to bring what he is calling more "transparency" to the over the counter trading markets by forcing investors to trade through a centralized, regulated clearinghouse.
Commodities Trading
The proposal by Commodity Futures Trading Commission head Gary Gensler could be a devasting blow to commodity traders like JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS) which have counted on commodities trading as a major portion of their revenue, which in the case of Goldman Sachs is ten percent of their total revenue over the last several years.
For J.P. Morgan, they said in their recent letter to shareholders that the commodities trading business for the company has more than doubled since 2006.
Two important commodities sectors Gensler wants to put limits on are metals and oil contracts, allowing only double the volume of other commodity investors.
In other carnage Gensler wants to impose on the commodities market, he also is pushing to bring what he is calling more "transparency" to the over the counter trading markets by forcing investors to trade through a centralized, regulated clearinghouse.
Commodities Trading
Monday, March 29, 2010
Alcoa (NYSE:AA) Up as Metals Rebound
Alcoa and metal prices
Metal prices moved upward today, led by copper, platinum and palladium, helping Alcoa (NYSE:AA) climb 1.2 percent by the end of the trading day, finishing at $14.44.
Most of this was the result of the drop in the U.S. dollar, which seems to be moving back to its inverse relationships to commodities, which had been swinging back and forth as the result of the uncertainty of Europe's response to the Greece sovereign debt crisis.
There was also a positive mood in the market when it was announced consumer spending was up for the fifth month in a row, implying a possibility that the recession may be starting to finally wind down, although that is a premature conclusion at this time.
Metal prices moved upward today, led by copper, platinum and palladium, helping Alcoa (NYSE:AA) climb 1.2 percent by the end of the trading day, finishing at $14.44.
Most of this was the result of the drop in the U.S. dollar, which seems to be moving back to its inverse relationships to commodities, which had been swinging back and forth as the result of the uncertainty of Europe's response to the Greece sovereign debt crisis.
There was also a positive mood in the market when it was announced consumer spending was up for the fifth month in a row, implying a possibility that the recession may be starting to finally wind down, although that is a premature conclusion at this time.
Thursday, March 25, 2010
Alcoa (NYSE:AA) Falls on Strong Dollar
Alcoa and Sovereign Debt in Europe
Fundamentals aren't driving commodity-related stocks at this time, as the sovereign debt fiasco in Europe is making the U.S. dollar look good, in spite of its own problems. Alcoa (NYSE:AA), like other commodity companies and commodity stocks are having downward pressure put on their share prices as a consequence.
The euro is under such pressure that people have already forgotten the problems with the U.S. dollar, as at this time they're insignificant in comparison to the euro.
Much of this was precipitated yesterday by Portugal's debt being downgraded by Fitch Rating, which caused havoc in the commodities market.
The U.S. dollar reached a 10-month high against the euro on the growing concerns over sovereign debt in Europe.
Fundamentals aren't driving commodity-related stocks at this time, as the sovereign debt fiasco in Europe is making the U.S. dollar look good, in spite of its own problems. Alcoa (NYSE:AA), like other commodity companies and commodity stocks are having downward pressure put on their share prices as a consequence.
The euro is under such pressure that people have already forgotten the problems with the U.S. dollar, as at this time they're insignificant in comparison to the euro.
Much of this was precipitated yesterday by Portugal's debt being downgraded by Fitch Rating, which caused havoc in the commodities market.
The U.S. dollar reached a 10-month high against the euro on the growing concerns over sovereign debt in Europe.
Tuesday, March 16, 2010
Citibank (NYSE:C) Growing Commodities Unit
Citibank Commodities Unit
Citibank (NYSE:C) is looking to its investment banking division for growth, specifically its commodities unit, which it is focusing on expanding in the near term.
Raw materials and agriculture should be strong sectors for many years, and even with the alleged move by China to tighten its monetary policy, that could be a ploy as it negotiates across a number of sectors for raw materials it needs desperately.
One for sure is iron ore for the steel industry in China, which is booming and a major export for the country.
Precious metals are another sector which China will have great demand for in the years ahead.
With the pressure to cut back on fees in relationship to consumers, banks like Citibank are looking outside of retail banking for growth sectors, and commodities afford some of the best opportunities in the years ahead, even though there could be a lot of ups and downs on the road.
Citibank Commodities Unit
Citibank (NYSE:C) is looking to its investment banking division for growth, specifically its commodities unit, which it is focusing on expanding in the near term.
Raw materials and agriculture should be strong sectors for many years, and even with the alleged move by China to tighten its monetary policy, that could be a ploy as it negotiates across a number of sectors for raw materials it needs desperately.
One for sure is iron ore for the steel industry in China, which is booming and a major export for the country.
Precious metals are another sector which China will have great demand for in the years ahead.
With the pressure to cut back on fees in relationship to consumers, banks like Citibank are looking outside of retail banking for growth sectors, and commodities afford some of the best opportunities in the years ahead, even though there could be a lot of ups and downs on the road.
Citibank Commodities Unit
Saturday, March 13, 2010
UBS (NYSE: UBS) Looking at Commodities
UBS Commodity Investing
Even though UBS (NYSE: UBS) largely got out of the commodities business during the economic crisis, and sold some of their holding in that sector at that time, officials at the company confirm they are again poised to enter that market again in the near future; possibly sometime in 2010.
While selling off most of its commodities assets, UBS did hold on to exchange-traded and index funds, and also it precious metals business. Its energy and base metals business it sold to Barclays (LON:BARC), which included oil, gas and power supplied to the U.S.
Some of their rivals ramped up their commodity play in 2009 and were very successful in their respective commodity units, generating good income, and positioned to continue on with that success in 2010 and beyond; making UBS somewhat behind their major rivals in that regard, and so we'll see them make a number of moves to shore up their depleted commodities investment unit soon.
UBS Commodity Investing
Even though UBS (NYSE: UBS) largely got out of the commodities business during the economic crisis, and sold some of their holding in that sector at that time, officials at the company confirm they are again poised to enter that market again in the near future; possibly sometime in 2010.
While selling off most of its commodities assets, UBS did hold on to exchange-traded and index funds, and also it precious metals business. Its energy and base metals business it sold to Barclays (LON:BARC), which included oil, gas and power supplied to the U.S.
Some of their rivals ramped up their commodity play in 2009 and were very successful in their respective commodity units, generating good income, and positioned to continue on with that success in 2010 and beyond; making UBS somewhat behind their major rivals in that regard, and so we'll see them make a number of moves to shore up their depleted commodities investment unit soon.
UBS Commodity Investing
Wednesday, March 3, 2010
Freeport McMoran (NYSE:FCX): Up and Away?
Freeport McMoran and Metals Demand
Freeport McMoran (NYSE:FCX) is strongly positioned for whatever may come in the precious metals sector, and being among the largest producers of key metals lie copper, molybdenum and gold, they can move up in a number of sectors, and that breakout could possibly be sooner rather than later.
Before concerns are raised about the poor condition of the economy in America and numerous other countries and regions, this play isn't going to come because of surging demand based on economic growth, but surging demand to replenish supplies, as companies have held back on making significant investments toward that end.
This is why recent data released on fourth quarter growth was meaningless from the point of view of growth, as it has largely been proven to have been simple replenishment, and that's the case now as well.
This of course shouldn't be taken as a negative, as whether it's replenishment or growth, there should be growing demand for precious metals going forward, and that should be good news for Freeport McMoran and its investors.
Freeport McMoran and Metals Demand
Freeport McMoran (NYSE:FCX) is strongly positioned for whatever may come in the precious metals sector, and being among the largest producers of key metals lie copper, molybdenum and gold, they can move up in a number of sectors, and that breakout could possibly be sooner rather than later.
Before concerns are raised about the poor condition of the economy in America and numerous other countries and regions, this play isn't going to come because of surging demand based on economic growth, but surging demand to replenish supplies, as companies have held back on making significant investments toward that end.
This is why recent data released on fourth quarter growth was meaningless from the point of view of growth, as it has largely been proven to have been simple replenishment, and that's the case now as well.
This of course shouldn't be taken as a negative, as whether it's replenishment or growth, there should be growing demand for precious metals going forward, and that should be good news for Freeport McMoran and its investors.
Freeport McMoran and Metals Demand
Thursday, February 4, 2010
Marc Faber: Own Precious Metals
Marc Faber Precious Metals
While Marc Faber has been busy blasting the banks and their practices, he mentioned recently that as far as it relates to commodities, and precious metals specifically, is if he is "right about further monetization and further government debt growth, the risk is really not to own any precious metals at all."
Faber and others acknowledge the possibility of a gold correction, depending on the liquidity in the markets, and says it could drop as low as $950 to $1,050 an ounce if that happens.
That would only be a temporary event and would be the time to load up on more gold if that's the circumstances.
Faber remains a bull on gold, and again confirmed it as a place of safety and a haven in ongoing turbulent times.
As far as equities go for 2010, Faber believes they will perform in an up and down manner throughout the year.
Again, gold and other precious metals are a must according to Faber, and not to own some is indeed to take a real risk.
Marc Faber Precious Metals
While Marc Faber has been busy blasting the banks and their practices, he mentioned recently that as far as it relates to commodities, and precious metals specifically, is if he is "right about further monetization and further government debt growth, the risk is really not to own any precious metals at all."
Faber and others acknowledge the possibility of a gold correction, depending on the liquidity in the markets, and says it could drop as low as $950 to $1,050 an ounce if that happens.
That would only be a temporary event and would be the time to load up on more gold if that's the circumstances.
Faber remains a bull on gold, and again confirmed it as a place of safety and a haven in ongoing turbulent times.
As far as equities go for 2010, Faber believes they will perform in an up and down manner throughout the year.
Again, gold and other precious metals are a must according to Faber, and not to own some is indeed to take a real risk.
Marc Faber Precious Metals
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