How does #GOLD stand up to other assets in terms of #Volatility?

Gold’s volatility increased less than that of equities and many commodities in 2020 

World @GoldCouncil analysis suggests Gold is still the most effective commodity investment in a portfolio, standing apart as a differentiated asset from the commodities complex.

Historically Gold has benefited from six key characteristics:

$550BN will shift from #Commodities importers to exporters in 2021, nearly 2X the $280BN reverse transfer in 2020 as prices collapsed.

Winners & Losers From Surge in Commodity Prices 

Gains for commodity exporters will easily outweigh their losses last year as the pandemic spread and crushed demand for raw materials: 

Bloomberg Economics estimates that $550 billion will shift from importers to exporters in 2021, nearly double the $280 billion reverse transfer last year when prices collapsed.

In absolute terms, Russia will benefit the most. China's net exports will drop by around $218 billion — far higher than the figures of around $55 billion for the next-worst off countries, India and Japan. 

See the whole article on Bloomberg here: https://www.bloomberg.com/news/articles/2021-07-30/here-s-who-wins-and-who-loses-from-the-surge-in-commodity-prices

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Don't Sleep on @RupertResources! 👀 at these widths! $RUP.v

#Finland #Gold Explorer @RupertResources on track to deliver. 

#Cormark & @Scotiabank with comments on Rupert Resources' latest drill results from #Ikkari. 

Below is Scotiabank's comment:

 

The Gold Price Pullback Can't Overshadow What is Shaping Up to be an INCREDIBLE Discovery…: 

Earlier this week, Rupert Resources (RUP-CN, Not Covered) reported yet another set of impressive drill results (according to Scotia Mining Sales - look at these widths!)  from its 100%-owned from its Ikkari prospect, the focus of its ongoing exploration program at the 100% owned Pahtavaara Project in the Central Lapland Greenstone Belt, Finland. The mineralized strike length at Ikkari is at least 650m in total with mineralization on all sections intersected to a depth of at least 300 to 500m. 

Highlights from Wednesday's release include:

·       Hole 121063 demonstrated multiple zones of higher grade gold mineralisation re-emerging at depth in the western section of Ikkari contained within a broad intercept of 1.9g/t gold over 142m

·       Hole 121028 intersected 3.1g/t Au over 76m from 248m as part of the infill program in the central portion of the discovery and a step back Hole 121030 beneath this intersected two strongly mineralized zones of 3.7g/t gold over 77m from 245m and 2.8g/t Au over 65m from 346m

·       Hole 121029 is a shallow step out hole to the northwest and intersected 2.1g/t Au over 25m from 124m

·       Hole 121032 intersected mineralisation both at surface and in multiple zones including 1.6g/t Au over 74m from 396m, with mineralisation extending to >450m vertical meters.

·       The Mineralized system at Ikkari remains open in all directions

1)       RUPERT is WELL-FUNDED: RUP's existing cash plus the recent funding totals around $60M.Taking into account and outstanding Agnico Eagle warrants (AEM already owns 10% of RUP), as well as  in the money options, RUP has a fully diluted cash position of over $80M and is very well funded for the critical valuation uplift stages of project development. Most importantly, RUP has locked in its required drilling capacity for the foreseeable future including the BoT rig that has been its primary exploration tool for the last two years.

2)      KEY CATALYST AHEAD - MAIDEN IKKARI RESOURCE COMING SUMMER 2021: Resource work is progressing with RUP's maiden Ikkari resource still planned for this summer. According the company, preliminary work on project economics, as well as work on permitting has commenced. Lab turnarounds have slowed with increased activity in the region and sector generally but the  critical mass of drilling and assay results were delivered over the winter to allow the resource work will all culminate in the near-term!

Attached is an excerpt from Cormark Securities' research comment on June 17th. 

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Through its control of #Cobalt & #BatteryMetals, @Glencore warns of future China dominance in #EV's. $GLEN.L

What happens [when] the Chinese say we are not going to export batteries, we are going to export electric vehicles. Where are the batteries going to come from? 

The car industry in the US and Europe risks being left behind by their Chinese rivals unless they secure supplies of cobalt, according to the world's biggest producer of the key battery metal.

Glencore chief executive Ivan Glasenberg told the FT Future of the Car Summit on Wednesday that western carmakers would be naive to think they could always rely on China to supply the batteries for electric vehicle fleets.

Glasenberg said Chinese companies had been quick to realise the vulnerability of their supply chains and "tied up" lots of cobalt from the Democratic Republic of Congo.

Chinese companies already control about 40 per cent of the DRC's output and have also signed long-term supply agreements with Glencore, the only major western miner operating in the country.

China has also built a dominant position in cobalt processing and is investing directly in mines. Earlier this year CATL, the Chinese battery group that has a market value of $130bn, paid $137m for a 25 per stake in China Molybdenum's Kisanfu copper-cobalt mine.

Glasenberg said Glencore would consider selling a stake in one of its DRC mines to a western carmaker, although it had not received any approaches.

Glencore is expected to produce about 35,000 tonnes of cobalt this year, a figure that could increase by 25,000 to 30,000 if the company decides to develop a new ore body at Mutanda, a mothballed mine in the DRC. "I think that will come on stream in the next 18 months," said Glasenberg.

See the whole article on the FT here: https://www.ft.com/content/0ee4a6cb-9dbe-4fee-84d0-3f48f3190935?desktop=true&segmentId=d8d3e364-5197-20eb-17cf-2437841d178a#myft:notification:instant-email:content

______________________________

MasterMetals

@MasterMetals

#Commodities’ latest boom is being spurred by #infrastructure-led spending to speed the recovery from the pandemic, supercharged with the world’s move towards #GreenEnergy

Extracting minerals, such as lithium, cobalt or copper, is still a dirty business with significant environmental and human impact © REUTERS

Rethinking the new minerals boom

Consumption and production patterns need to change in the energy transition

5 hours ago 

The mining industry is currently alight with talk of a new commodity "supercycle".

The last one coincided with China's rapid industrialisation growth spurt, and whether it is a supercycle or not, a major boom looks likely because of infrastructure-led spending to speed recovery from the pandemic coupled with the energy transition. Indeed, the talk of Green New Deals seeks to wed this energy transformation with that economic stimulus.

Mining companies, and their investors, are obviously enthusiastic about such an expansion. Mining entrepreneur Robert Friedland gloated that "if we get a Green New Deal where bankers just hit the zero keys . . . it would make our day".

However, miners are also taking advantage of their role supplying metals to renewables, batteries and electrical infrastructure to create a new green narrative for mining — the "black-to-green revolution".

In this new world, mining companies are the climate heroes saving the world, although it also conveniently downplays overall demand for critical metal end-uses, in the likes of construction, aviation, electronics and the arms industry. For example, even in the highest demand scenarios, under no circumstances will the renewable energy sector consume the majority of the annual production of copper.

The new demand supporting the energy transition does not change the act of mining. Extracting minerals, such as lithium, cobalt or copper, is still a dirty business with significant environmental and human impact.

This new boom threatens to open new extractive frontiers, in the global south but also in North America and Europe. There is an urgent need to deal with the potential widespread destruction and human rights abuses that could be unleashed. 

Although it is crucial to tackle the climate crisis, and rapidly transition away from fossil fuels, this cannot be achieved by just expanding our reliance on other materials. The energy crisis is fundamentally a resource-usage crisis.

Our use of natural resources has more than tripled since 1970 and is on a continued growth path. According to the International Resource Panel, 90 per cent of biodiversity loss and water stress are caused by resource extraction and processing and these same activities contribute to about half of global greenhouse gas emissions. 

...

On the demand side, there are a number of practical solutions that should be initiated or accelerated to enable better-informed choices about our energy and consumption, and to reduce the need for new resource extraction. However, it is not enough to switch to green growth, such as simply increasing the production of new electric vehicles.

Read the whole article on the FT here: https://www.ft.com/content/59cb407c-bf19-4e2e-8fed-bb3f140e5800?

Andy Whitmore is author of the War on Want 'A Material Transition' report and co-chair of the London Mining Network

The Commodities Note is an online commentary on the industry from the Financial Times.

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“I used to go with 500,000 pounds to London…” #Commodities Traders’ Long History of “Commissions” to Seal Deals

"I used to go with 500,000 pounds to London," said former Glencore exec. 

"In those days paying so-called "commissions" was both legal and even tax-deductible for a Swiss company…"

"The old-style traders, the Marc Rich diehard breed, some of them don't quite get it. Until they're sitting and talking with the FBI. Then they get it."

Excerpts  from The World for Sale, a book on the history of the commodity trading industry by Javier Blas and Jack Farchy from Bloomberg. 

See the article online here: 

Former Glencore Exec Details Suitcase of Cash He Used to Seal Deals - Bloomberg

https://www.bloomberg.com/news/articles/2021-02-24/former-glencore-director-says-he-flew-the-world-with-bag-of-cash

The #Commodities ‘bull run’ is the ultimate a V-shaped #Vaccine trade

"It's easy — and largely accurate — to present the 2021 commodity outlook as a V-shaped vaccine trade," said @GoldmanSachs in a recent report.

There Are 316 Men Leading #Commodities Houses and Only 14 Women - Bloomberg

"Historically, fewer women have studied subjects like engineering that funnel people toward the oil industry."

"We haven't reached a critical mass of women in the industry, we're not there yet," said Claire Tomlin, who is now a managing director at commodities headhunting firm Clarion Search. "Once we get there, working practices will change.

See the whole report here : https://www.bloomberg.com/news/articles/2018-03-19/there-are-316-men-leading-top-commodity-houses-and-only-14-women 

How Awesome was Anil #Agarwal’s @AngloAmerican Adventure

The FT's DD breaks down the trade:

In our article, we explain that Agarwal has made about $500m in gross profits on the trade. BUT, that is before the substantial costs required to service the instruments involved in making the stake happen. Coupon costs alone will have totalled about $300m since he first put on the two legs of the trade.

And we've learned that Agarwal is likely to reveal that he is up about $100m from the overall project. We assume that means a hefty chunk of the remaining $100m will be headed to the folks at JPMorgan.

Agarwal's trade strongly resembles an equity collar, which DD's Rob Smith and Arash Massoudi explained last year has become a hot money spinner for Wall Street banks looking to make money from deep pocketed clients. In short: collars do not come cheap.

In short:

• Agarwal just spent an insane amount of time and energy to correctly pick a stock that soared 80 per cent in two years, but due to the use of an exotic structure may have only made profits equal to his bank fees . . . yikes!

Read the whole story here: https://www.ft.com/content/53b77de8-af35-11e9-8030-530adfa879c2

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Impending retirement of #Glencore’s #copper chief Mistakidis marks start of generational shift at the world’s most powerful commodity trader

Glencore begins the changing of the old guard

Departure of trader's head of copper signals break-up of 'billionaire boys' club'

December 11, 2018

Some of Glencore's senior lieutenants, from left to right: Tor Peterson, Ivan Glasenberg, Alex Beard and Telis Mistakidis © FT montage / Bloomberg

The impending retirement of Glencore's copper kingpin Telis Mistakidis marks the start of a generational shift at the top of the world's most powerful commodity trader.

While some senior executives have left the Swiss-based group since its 2011 stock market flotation, none of the inner circle surrounding the company's workaholic boss Ivan Glasenberg have left — until now.

The departure later this year of 56-year-old Mr Mistakidis signals the break-up of the so-called billionaire boys' club, which built risk-hungry Glencore into the commodity industry's dominant and most talked-about company, according to analysts, bankers and investors.

The leadership changes come as Glencore faces a string of legal challenges, including a US Department of Justice investigation into possible corruption and bribery that has put its business model under the microscope. 

…

"He's decided to retire and pass on the baton to the next generation," Mr Glasenberg said. "None of us expect to stay here forever," he added. 

But analysts have questioned the management changes.

"It's one of those where you don't know whether this is being done to appease the regulators, and has been done with their consultation, or if they're just trying it out hoping to get them off their backs," said Ben Davis, an analyst at Liberum.

Others say Glencore, which has an appetite for risk that few of its peers can stomach, is doing what it always does and moving quickly to get in front of a problem.

"They're trying to be on the front foot, they're the most reactive company in our sector," one banker said. "When things happen they react very quickly." 

…. 

These investigations have weighed on Glencore's share price, which is down 29 per cent this year.

Glencore grew out of Marc Rich & Co, whose eponymous founder was regarded as the godfather of modern commodity trading. Since 2002, when Mr Glasenberg took the helm, it has been run by a tight-knit group of traders who have been at the company since the 1990s. 

…

Mr Glasenberg also made them fantastically wealthy after Glencore's $60bn flotation in 2011. Mr Mistakidis and Mr Maté have retained equity stakes worth about £1.2bn each.

"The management has been here a long time since the float, even though people thought since 2011 that a lot of the senior executives would leave," said Mr Glasenberg. "They haven't . . . and there comes a time when the next generation needs to take over."

Some think the management changes announced by Glencore last week also reflect its evolution from a commodity trader to a company that makes most of its money by extracting raw materials from the earth. 

…

"What you're seeing is a change in Glencore's structure that mirrors its evolution from a private trading company to one of the world's largest mining companies," said Paul Gait, analyst at Bernstein Research. 

"If anything, the turbulence of the last year has forced investors to ask more questions about the company, about management procedures; whereas before people were focused on the dollars and cents and tonnes out of the ground. Now there's an increased awareness that these kinds of things have become just as important," added Mr Gait.

Read the whole article online @FT here: https://www.ft.com/content/38f2768e-fa1d-11e8-af46-2022a0b02a6c

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#Gold Is Cheap. Barron's Cover

"#Gold offers enormous portfolio utility in today's complex and treacherous investment environment."

How cheap is gold today?

Barron's Cover

Gold Is Cheap. Inflation Is Coming. You Do the Math

The Fed may have to relent, in part because the upward pressure on rates is squeezing developing economies that have dollar-denominated bonds or other obligations. If the markets sense that the Fed is about to hold off, the dollar could drop and gold would probably rally. His view is that "gold offers enormous portfolio utility in today's complex and treacherous investment environment."

How cheap is gold today?

One way to measure it against stocks is a comparison with the Dow Jones Industrial Average. It effectively takes 22 ounces of gold to buy one unit of the Dow, which finished on Friday at a record 26,743. The most recent low in that relationship occurred in 2011, when the Dow/gold ratio dropped to 7.8. Then, gold was near its all-time high of $1,900 an ounce.

The century-old peak of 40 occurred in 1999, when gold traded at about $290 an ounce and the Dow stood around 11,500. The low came at the top of the commodity boom in 1980, when the metal and the Dow were at parity around 800 after a decade-long stretch when the Dow moved little. Commodities overall are historically cheap versus stocks.

See the whole article on Barron's:

https://www.barrons.com/articles/gold-is-cheap-inflation-is-coming-you-do-the-math-1537582480?mod=djem_b_Weekly%20Feed%20for%20Barrons%20Magazine 

Going deep for a rich #copper deposit, @RioTinto & @BHPBilliton pioneering #sensors & #AutonomousVehicles tech to data integration

Mining a Mile Down: 175 Degrees, 600 Gallons of Water a Minute

Steven Norton STEVEN.NORTON@wsj.com

June 7, 2017 10:31 p.m. ET

SUPERIOR, Ariz.—One of the world’s largest untapped copper deposits sits 7,000 feet below the Earth’s surface. It is a lode that operator Rio Tinto RIO 2.11% PLC wouldn’t have touched—until now.

Not that long ago, anabundance of high-grade copper could be mined out of shallower openpits. But as those deposits are depleted and high-grade copper becomestougher to find, firms such as Rio have been compelled to mine deeperunderground.
 ...
Advances in mining technology are making that possible—just as developments in oil and gas drilling heralded the fracking revolution. Now, using everything from sensors and data analytics to autonomous vehicles and climate-control systems, Rio aims  to pull ore from more than a mile below ground, where temperatures can  reach nearly 175 degrees Fahrenheit.
....
A 15-minute elevator ride 6,943 feet down Resolution’s No. 10 mine shaft leads to a dimly lighted cavern where warm water falls from the rocks like rain. Electrical gear buzzes constantly, and a  network of pipes pumps water out of the shaft at the rate of 600 gallons a minute. A ventilation system cools the area to 77 degrees.

Over the next few years, Rio plans to deploy tens of thousands of electronic sensors, as  well as autonomous vehicles and complex ventilation systems, to help it bring 1.6 billion tons of ore to the surface over the more than 40-year projected life of the mine.

 

Data coming from those sensors will be fed into analytics engines that will help monitor tasks  ranging from  underground blasts to the movement of autonomous vehicles.

...

Rio hopes analytics will help to break down organizational silos. Rather than one person viewing data about a specific part of the mining process, information from across the mine can be sent to a single place where experts can obtain a more holistic view of operations.

“It is taking a lot of the decision-making out of the hands of the operator and putting it into a group of specialists who can manage the whole system,” Mr. Stegman said. ..

Read the rest of the article here:Mining a Mile Down: 175 Degrees, 600 Gallons of Water a Minute:

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After years of underinvestment, #Miners finally increasing #Exploration spending in Hunt for new deposits Bloomberg

• 
  Exploration Spending forecast to rise more than 75% through 2025 to $18 Billion: MinEx
• Discovery of world-class deposits has slowed in past decade

https://www.bloomberg.com/news/articles/2017-03-23/miners-regain-mojo-to-spark-18-billion-in-global-exploration

Miners Regain Mojo to Spark $18 Billion in Exploration Hunt

More stories by David Stringer

by

David Stringer

March 23, 2017, 7:00 PM GMT+1 March 24, 2017, 9:44 AM GMT+1

• Spending forecast to rise more than 75% through 2025: MinEx
• Discovery of world-class deposits has slowed in past decade

A rebound in exploration by global miners could see spending hit $18 billion by 2025 with China the front runner in the search for a new generation of giant discoveries.

Exploration budgets are rising after they plunged to an 11-year low of about $10 billion last year as mining companies slashed costs in the wake of a collapse in prices, according to Richard Schodde, managing director of Melbourne-based MinEx Consulting Pty, an industry adviser.

"We are coming out of the bottom of the cycle. I actually see the opportunity for the exploration sector to regain its mojo and quickly deliver a pipeline of good discoveries," Schodde said in an e-mailed response to questions. "It's catch-up time for the industry."

China, the top spender on exploration, is likely to continue to dominate in the hunt for new deposits, while Canada and Ecuador are currently among hot targets for more investment by miners, according to Schodde. The U.S. could be poised for a rise in exploration with President Donald Trump regarded as likely to be more favorable toward resource development, S&P Global Market Intelligence said in a report published in January.

Discoveries of so-called tier one projects, deposits with a net present value of more than $1 billion, have stalled. Only 12 were uncovered in the past decade compared to an average of two to three a year since 1950, according to MinEx. The average cost of finding a significant mineral deposit has tripled in the last 10 years to about $238 million, the consultancy said in a March 6 presentation.

China, the target of more than a quarter of global exploration spending in 2016, is yet to reap major rewards. An estimated $42 billion spent on the nation's hunt for new mines since 2007 has seen only two large discoveries announced and found a total slate of projects worth about $13 billion, according to MinEx. Global exploration budgets peaked in 2012 at $33 billion, the data show.

#Gold and #goldstocks - Uptrend stopped

Gold and gold stocks - Uptrend stopped

Attached are the daily charts of  North American largest gold companies, Barrick Gold and Newmont Mining. Both broke yesterday on the downside from an uptrend which was in place since the middle of  January 2016. The MACD gave a signal of divergence since early March which requested extreme caution.

The gold chart (attachment 2) completed yesterday a Head&Shoulder formation with a neckline just under US$ 1,240 per ounce.

The good thing is that we were warned for the last 2-3 weeks with the divergence of the gold price and the MACD that something is wrong. Very seldom we get such a nice pre warning in advance and investors were able to take the necessary action.

We don't take serious the usual excuse it was all about  a strong dollar. As attachment 4 shows, the U.S. Dollar Index is still in a well defined box with no indication of a strong move on the upside or on the downside at the moment.

Happy Easter

When even Cargill Inc., the world’s largest grain trader, decides to liquidate its own hedge fund, that’s a sign that commodity speculators are in trouble

Hedge Fund Losses From Commodity Slump Sparking Investor Exodus

by Javier Blas

When
even Cargill Inc., the world’s largest grain trader, decides to
liquidate its own hedge fund, that’s a sign that commodity speculators
are in trouble.

Hedge funds focused on raw materials lost money on
average in the first half, the Newedge Commodity Trading Index shows.
Diminishing investor demand spurred Cargill's Black River Asset
Management unit to shut its commodities fund last month. Others enduring
redemptions include Armajaro Asset Management LLP, which closed one of
its funds, Carlyle Group LP's Vermillion Asset Management and Krom River
Trading AG.

While hedge funds are designed to make money in both
bull and bear markets, managers have a bias toward wagering on rising
prices and that’s left them vulnerable in this year’s slump, said Donald
Steinbrugge, managing partner of Agecroft Partners LLC. The Bloomberg
Commodity Index tumbled 29 percent in the past year and 18 of its 22
components are in a bear market.

“No one wants to catch a falling
knife, and demand for commodity-oriented hedge funds is very low,” said
Steinbrugge, whose company helps funds find investors.

The
amount of money under management by hedge funds specializing in
commodities stands at $24 billion, 15 percent below the peak three years
ago, according to data from Hedge Fund Research Ltd.

The Newedge
index, which tracks funds betting on natural resources, suggests
managers have lost money for clients during much of the past four years.
A dollar invested in the average commodity hedge fund in January 2011,
when values reached a reached a record, had shrunk to 93 cents by the
end of June. Investing in the S&P 500 index would have returned 80
percent, including dividends.

Commodity
profits tumbled in 2012 and 2013, prompting the first wave of closures,
including funds run by Clive Capital LLP and BlueGold Capital
Management LLP.

The exodus marked a shift from the boom times
before the financial crisis, when the Newedge index surged almost
sixfold from 1999 to a peak in June 2008. Since 2010, the gauge fell in
three of the next four years and is down 0.3 percent in 2015.

The
Galena Fund fell 0.8 percent in the first six months of this year,
according to data compiled by Bloomberg. The fund, which had $637
million at the end of June, is the asset management unit of Trafigura
Beheer BV, the second-largest metals trader. Officials at the unit
declined to comment.

The $230 million Singapore-based Merchant
Commodity Fund lost 3.9 percent in the first half, after returning
almost 60 percent last year, a record.

“Investor appetite in commodities isn’t high,” said the fund’s founder, Michael Coleman.

Krom
River, based in Switzerland, lost 2.9 percent in the first half,
according to a letter to investors seen by Bloomberg. Assets under
management stood at $64 million in June, from about $800 million in
2012. Chief Executive Officer Mike Cartier declined to comment.

The
Armajaro Commodities Fund, which managed $450 million, lost 11 percent
in the first half and was scheduled to close at the end of July, a
person familiar with the matter said. The company declined to comment.

The
founders of Vermillion Asset Management, the commodities hedge-fund
firm owned by Carlyle Group, left this year after losses. Assets in
Vermillion’s main fund fell to less than $50 million from a peak of $2
billion, a person with knowledge of the matter said last month.

Hedge fund manager Pierre Andurand. Photographer: Daniel Acker/Bloomberg

Others
have fared better. Andurand Capital Management, run by Pierre Andurand,
gained 3.5 percent in July, bringing his 2015 gains to 4.8 percent,
according to a person familiar with the matter.

 The fund, which manages about $500 million, delivered a 38 percent return in 2014. The company declined to comment.


“There’s
no money going into commodities,” said Christoph Eibl, chief executive
officer of Tiberius Asset Management AG, which has $1 billion in
commodity investments.





read the article online here: Hedge Fund Losses From Commodity Slump Sparking Investor Exodus - Bloomberg Business

Even the #LME is doing its part to bail out #China @WSJ

China’s Yuan Pushes Deeper Into Global Financial System

                             ENLARGE

Chinese one-hundred yuan bank notes being counted. China’s currency is now the fifth most widely used in international payments as the currency takes its place alongside the U.S. dollar, the pound, the euro and the yen. Photo: Bloomberg News

By

Chiara Albanese

July 27, 2015 7:07 p.m. ET

China’s domestic stock market may be in turmoil but the country’s currency, known as the yuan or renminbi, is making a seemingly relentless push deeper into the global financial system.

The latest step: the London Metal Exchange, the world’s largest venue for trading metals where $15 trillion of metals was traded last year, is set to accept yuan as collateral for banks and brokers that trade on its platform. The Chinese currency joins the U.S. dollar, the euro, the British pound and Japan’s yen, which are all currently permissible as collateral on the LME’s platform.

“In the commodities area, it makes absolute sense to start providing renminbi-denominated services,” said Trevor Spanner, chief executive of the LME’s clearing house business. “The renminbi is on its way to becoming one of the world’s most widely used currencies” he said.

While largely a technical change, the LME move marks another milestone for China’s currency.

The yuan is now the fifth most used currency for international payments, ranking number seven a year ago, according to data from the Society for Worldwide Interbank Financial Telecommunication, a provider of payments services.

A Bank of England survey on Monday showed that trading in yuan rose 25% in London in the six months to April this year, even as trading volumes in other currencies fell by 8% on average over the same period.

Meanwhile, China, whose economy is a major driver of demand for a range of commodities, is also taking a greater role in metals markets specifically.

Last year, Hong Kong Exchanges and Clearing Limited, which owns the LME, launched yuan-denominated futures contracts for some industrial metals, while the LME signed agreements with two Chinese companies to explore ways of expanding use of the yuan.

In June this year, the London Bullion Market Association said that Bank of China Ltd. will become the first Chinese bank to participate in the daily process for setting the price of gold. China vies with India as the world’s largest consumer of gold, according to the World Gold Council.

The yuan’s gains in the global financial system come as investors turn cautious on China’s domestic markets, where stocks have been on a volatile ride of late. And international use of China’s currency remains tiny compared with the dollar, the euro and sterling.

David Clark, chairman of the U.K.-based Wholesale Markets Brokers Association, said global renminbi trading infrastructure is falling into place, but volumes will only really take off when China’s currency can be freely converted into dollars, euros or other foreign currencies.

“The renminbi is getting more and more important for global finance. But there is a big question mark: when it will be fully convertible?” he said.

Still, a number of major financial centers are racing to become a hub for the yuan, including London.

“The role of the renminbi in foreign exchange trading and cross-border payments has surged,” said Dan Marcus, CEO of London-based currency trading platform ParFX. The rise of China’s currency on global markets “is arguably the most significant development in currency trading since the introduction of the euro in 1999. Ten years from now, it will be challenging the top major currencies.”

Write to Chiara Albanese at chiara.albanese@wsj.com

Read the whole article online here: China’s Yuan Pushes Deeper Into Global Financial System - WSJ

#Dollar/ #Loonie may have a date with six-year high as crude #oil's collapse continues | Futures Magazine

 

Dollar/Loonie may have a date with six-year high as crude’s collapse continues

        

Global traders remain hyper-focused on the latest Greece-related rhetoric from such influential luminaries as Latvia’s Central Bank Governor, Lithuania’s Finance Minister, and even the Finance Minister of Malta, but perhaps investors should be focusing just as much energy on the collapse in the price of: Energy.

In particular, oil has gone off the boil, with WTI falling nearly 8% in yesterday’s trade alone. Beyond an last week’s surprising increase in U.S. oil rigs and the ongoing Greek debt drama, the primary catalyst for the drop in oil has been optimism about a nuclear deal with Iran that could eventually bring up to 1 million barrels per day of the country’s oil back to the global market. Over the weekend, Russia’s Foreign Minister said that a deal with Iran “is about 90%” complete and suggested that the remaining issues were more procedural than political.

Combined with last week’s technical breakdown below 57.00, traders took these comments as a green light to drive WTI down to a low near 52.00 so far. “Black gold” is now testing the 50% Fibonacci retracement of its entire Q2 rally at 52.30, but if that level gives way, a continuation down toward the 61.8% retracement near the psychologically-significant $50 level could be next.

Read the rest of the article online here: Dollar/Loonie may have a date with six-year high as crude’s collapse continues | Futures Magazine

About the Author

Senior Technical Analyst for FOREX.com. Matt has actively traded various financial instruments including stocks, options, and forex since 2005. Each day, Matt creates research reports focusing on technical analysis of the forex, equity, and commodity markets. In his research, he utilizes candlestick patterns, classic technical indicators, and Fibonacci analysis to predict market moves. Matt is a Chartered Market Technician (CMT) and a member of the Market Technicians Association. You can reach Matt directly via e-mail (mweller@gaincapital.com) or on twitter (@MWellerFX).

#Commodities: Global recovery injects life back into #MiningStocks - Telegraph

Mining companies and most raw commodities are now seeing either sustained year-on-year gains in price, or have cut their losses after last year’s rout.

Commodities: Global recovery injects life back into mining stocks

Commodities were beginning to look like a graveyard for investors last year but the first half of 2014 has seen the sector recover some of its allure. The broadening global economic recovery now spreading from North America through to the UK, Europe and into Asia is underpinning a revival in resources as an asset class even if the boom years of the last decade may never return.

Mining companies and most raw commodities are now seeing either sustained year-on-year gains in price, or have cut their losses after last year’s rout. Although some concern remains over major consumer China suffering its own debt crisis, resources are once again offering investors a low-risk option to gain exposure to rising global consumption and the return of sustained economic growth.

Here is a review of the first half of industrial commodities; and the hot areas for investors to look out for in the next six months:

Although investors remain cautious the big four mining groups listed in London, BHP Billiton, Rio Tinto, Anglo American and Glencore have performed better over the last year. Year-on-year these four - accounting for about 8pc combined of the FTSE-100 - have gained an average of 5.64pc, which is still underperformng the overall gains on the main market over the same period. The overarching theme for the four bellwether mining stocks has been cost cutting and their individual ability to rein in overheads, while selling non-performing assets.

BHP Billiton and Rio Tinto are the two standouts in terms of gains in value up 11.9pc at 1,947.40p and 13.62pc to 3,257.50p respecively since last May. Their performance is reflected in the ability to strip costs quicker than their major rivals and focus on key bulk industrial raw materials such as iron ore and copper. In the second half of this year investors should look out for BHP Billiton making a further $5.5bn (£3.2bn) of savings and a possible $20bn demerger of its nickel, manganese and aluminium interests as the company continues to sharpen its focus on what it defines as its “four pillars” of iron ore, copper, coal and energy.

Rio Tinto, which has a narrower portfolio, may struggle to gain traction due to the current weakness in iron ore prices. The company is seen to be vulnerable to fluctations in demand for the steel-making commodity. Analysts at RBC Capital Markets believe the stock needs to fall to around £31 per share, from which point it could see a 25pc upside. However, the broker warns: “Rio’s exposure to aluminium, iron ore, base metals and coal in particular is vulnerable should world growth, especially China’s growth, be slower than we expect.”

#Gold #exploration budgets reach all-time high of +$6 billion in 2012, but still failing to replace production | SNL

Gold exploration budgets reach all-time high of more than $6 billion in 2012, but discoveries fall short of replacing production.


Major gold discoveries failing to replace production
September 15, 2013 9:03 PM ET

By Jim Lowrey


Gold exploration budgets directed at finding and defining new discoveries — grassroots plus 75% of late-stage — have increased significantly since 1999 and reached an all-time high of more than US$6 billion in 2012, according to "Strategies for Gold Reserves Replacement 2013 — Update," a study recently completed by SNL Metals Economics Group.


As it takes at least three years to define a major discovery (a minimum of 2 million ounces of contained gold), it is too early to judge the success of recent exploration efforts; however, data for 1990-2012 show that the total gold found in major discoveries fell short of replacing global gold production, particularly over the past 15 years.


From 1990-1997, companies' annual discovery-oriented gold exploration budget total more than doubled from US$930 million to almost US$2.2 billion, and the average cost per discovery of the 103 discoveries made during that period was US$94.4 million. From 1998-2002, exploration budgets slumped along with gold prices, and the average cost among the 31 discoveries in the period was US$132.7 million. Driven largely by rising gold prices, exploration budgets increased an average of 31% annually from 2003-2012, with the exception of a dip in 2009. Excluding the past three years to account for underexplored new deposits, the average cost per discovery among the 69 made from 2003-2009 increased to US$202.5 million.