Vanescent 
Ich las irgendwo ein posting von einen Inder der prophezeit 685-485-850 in den naechsten paar Monaten. Das mit 485 ist uebertrieben, sage eher 630 USD als rockbottom.
Nehmen wir den Schnitt vom Homeguru dann ist der 673 USD, so what !
Da kommen noch ein paar Watschen vom PPT aber danach auf zu neuen Hoehen.
Bei den naechsten heftigen Rueckschlaegen einfach nachkaufen und den Nachteil zum Vorteil machen wenn man Cash hat.....
Hier ein guter Artikel den man sich an die Brust nimmt.
Gerade per mail bekommen, vielleicht kennt ihr den schon.
Bearish was Base Metalls angeht, ganz unten der grosse Unterschied Gold vs. Silber.
Speculation and Price Risks
By Frank Veneroso
February 2 , 2007
The break in commodity prices so far this year
Most commodity prices soared into a spike peak in May of last year. For many, that was the high price so far for the cycle. Prices broke in May-June and then recovered. By fall some commodity prices, like the energy complex and copper, started down. Others like nickel, lead and, zinc soared to new highs well above the past May peaks. With the very start of this year almost all commodity prices lurched downward. The decline persisted through much of January. As a result of this decline most of the commodity indices made new lows and the overall chart spanning through 2006 into January 2007 looks like a huge top after a five year bull market.
What has led to this emerging bear trend in commodity prices? Let me take you back to the three salient points I have made again and again and repeated at the beginning of this paper.
Data on bank commodity derivatives suggest a flood of investment and speculation that has probably been too large for these relatively small markets to absorb.
This increase in the amplitude and duration of this commodity bull cycle will inevitably encourage supplies and ration demands. This will throw markets into surpluses which will eventually weigh on prices.
The combination of surpluses and huge buying pressure by investors and speculators is throwing commodity markets into forward premiums or contangos which is making the cost of carry in commodities prohibitively expensive.
If commodity prices are falling it should be because the high amplitude and long duration rise in commodity prices in this cycle has created surpluses and these surpluses are growing. In addition, the high contango and their implied carrying cost, along with increasingly visible surpluses, should now be curbing and even reversing the flood of investment and speculation that has been responsible for the strength of the commodity bull market in this cycle.
Let us consider energy first. Many attribute the recent serious spill in the crude oil price to unusually warm weather in much of North America and Europe. No doubt, warm weather has played a role. But so has a growing surplus and the pain to investors and speculators from a high cost of carry.
For many, many months now OPEC and the IEA have been warning about demand rationing and supply increases. Progressively they have been ratcheting down their estimates of, and forecasts for, crude oil demand growth for 2006 and 2007. In one report I have received it is estimated that crude demand in the United States in recent weeks has been below comparable calendar date levels both a year ago and two years ago. Some of this is due to weather. But some of it is due to demand rationing.
At the same time, the estimates for non-OPEC supply growth in 2007 are edging higher. Many now expect non-OPEC supply growth to increase this year by more than in any year over the last three decades.
This has become apparent in OPEC’s decisions to cut output and the emergence of growing unutilized capacity in the global crude oil market.
Let’s go on to metals. I have been contending for over a year and a half now that hedge funds have become buyers of physical metal. These holdings have not been made public; they have constituted” hidden stocks”. I believe such purchases have persisted right through 2006.
Should we believe my contention? I have reported on numerous occasions that many accounts of such accumulations of physical metals by hedge funds have come my way. In addition, in an earlier document I noted that exchange inventories of palladium-a minor metal- have risen from roughly 100,000 ounces to over a million ounces. People familiar with these stocks say they are held by several hedge funds.
Earlier in this document I cited reports that hedge funds have bought significant quantities of uranium- another minor metal.
Lastly, above I have also provided reports that one hedge fund holds 90% of the 700,000 tonnes of physical aluminum that are on warrant in LME warehouses and single hedge funds own a comparable high share of other LME inventories.
If hedge funds own illiquid minor metals like palladium and uranium and hold huge quantities of warranted base metals, why should we not believe the many reports of hedge fund hidden stocks of physical metal that have crossed my desk and which I have discussed in the past?
Our “official” statisticians for the various metal markets cannot accurately measure demand for, or consumption of, these commodities. They surely cannot assess the amount of metal “consumed” in purchases of end use products embodied in the goods that households and firms purchase. For this reason demand for a primary metal like copper cathodes or aluminum ingots is defined as the purchase of these primary metals by first stage processors. Copper consumption, for example, is the copper cathodes delivered to wirerod mills and brass mills.
But even our data on metal consumption defined in this way is flawed. For most economies It is just too difficult for statisticians to get the actual data on deliveries of primary metals to such processors. For this reason, statisticians have been forced to have recourse to a concept of “apparent” demand. Demand is calculated by taking all known supplies (which are easier to estimate) plus the change in visible stocks as a measure of demand for a given country. Supplies come from domestic refineries and from net imports (exports minus imports). The problem with this procedure is that for most commodities there is no good data on changes in stocks. Most primary metal inventories are not recorded. As a result, if there is a build in unreported or hidden stocks, this build is recorded as an increase in demand. Such an increase in demand is reflected in the market balance: deficits are overstated and surpluses are understated.
The official data on metals shows, for the most part, that the deficits of several years ago are now giving way to a market balance or a surplus. For example, the ICSG “official” data on the global copper market shows a 905,000 tonne deficit in 2004 evolving into a 200,000 tonne surplus in 2006.
But, if with the rise of massive hedge fund speculation over the last two years, hedge funds have been accumulating significant hidden stocks of base metals, these markets are in smaller deficits or larger surpluses than the official data suggests.
For these reasons I conclude that the base metal sector is responding to price signals. Demands are being rationed; supplies are being encouraged. These markets are probably all now in surpluses, which are growing.
This has probably contributed to some of the price weakness in the metal sector in the last few months.
So much for the real world of supply and demand. In addition to this, we must consider the financial world of investment and speculative flows.
Without a doubt there were huge inflows into commodity derivative baskets and commodity oriented hedge funds in 2005 and the early part of 2006. In fact, the parabolic blow off in many commodity prices into early May of last year was probably a response to large allocations of new funds by pensions, endowments, private client bankers, and high networth individuals into commodity funds of all kinds with the onset of the new year. It has been assumed by many that these allocations to commodities have now become a permanent feature of the investment landscape and these flows would remain highly positive throughout last year and into 2007. In a Veneroso’s Views I posted in September entitled “The Pin Stripe Investor in Commodities: The Four Stages of Revulsion” I argued this would not be the case.
I think my forecast was correct. From what I can garner from reports from investment bankers the overall net flow into commodity baskets abated into insignificance by the second half of last year. Apparently, paying a 16% plus annual cost of carry proved to be too painful. Johnny-come-latelys in the institutional world were allocating new monies to these products; but other institutions, experiencing a loss from a costly contango, were redeeming.
So what happened in the first two weeks of this year? I believe the opposite of what happened in the beginning of last year has occurred.
Big institutions like pensions and endowments tend to make major portfolio allocations at key calendar dates. The beginning of the year is most key. Just as they allocated considerable new funds to commodity derivative baskets and commodity hedge funds in early 2006, I believe that on a net basis they may have withdrawn funds this time around with the start of 2007. Perhaps the big motivator was the pain of the costly contango. Less important but perhaps of significance is the fact that commodity prices were rolling over and, independent of the contango, commodities as an asset class were no longer providing positive price appreciation. Lastly, there may have been some nagging concerns about a risk of a global economic slow down in the wake of the U.S. housing bust and the possibility of more Amaranths.
The Future: More Price Declines
If this account of the recent fall in commodity prices is correct it represents only the beginning of a process that will unfold over time. When high commodity prices throw commodity markets into surplus there are long lags involved. It takes years to build major production facilities. The decisions have been made. The financing has been obtained. Construction has begun. Now, with big sunk costs, there is no turning back. But, in many cases, there is no production yet either. That all lies ahead and, for the most part, it cannot be stopped.
The same can be said about demand rationing: there are long lags. Consumers, burnt by high commodity prices, have to find new ways to get by with less. They must find ways to economize and substitute. Decisions have to be made, new production procedures must go beyond the design stage, new capital equipment must be built that produces goods in a different way. Here again, the impact on consumption is only beginning to be felt. It takes years for new production processes to penetrate global manufacturing.
Lastly, as for investment and speculative flows, the reversal, if it is occurring, has only begun.
Though the permanence of the costly super contango could be easily deduced from over investment and speculation in commodity derivatives, few recognized the obvious. To this day the investment bankers and others who sell commodity derivative products keep trying to lead the uninitiated among investors into their products, even though, over time, such investments ensure deep losses. It will take time for the slow moving behemoths of the institutional investment world to catch on to the folly of allocating funds to these products and to reverse past decisions which were made only a short time ago.
But the prohibitive costs of carry of these baskets ensures that widespread “revulsion” against these products will set in and most of the fund flows into these products will be reversed before it is all over.
As documented above, pension and endowment allocations to commodity derivative baskets have been small when compared to investments by these same institutions and others in commodity-oriented hedge funds. When it comes to the financial side of the commodity bubble what happens to hedge fund flows will matter most.
The amazing mountain of commodity derivatives- most of which must be attributable to hedge funds- implies large leveraged long positions by some funds. Reports about the activities of these funds corroborate this assumption. The fretting by officialdom over excessive leverage by hedge funds in illiquid markets provides yet further corroboration. The example of Amaranth provides yet further corroboration.
If I am right that the very high commodity prices of recent years is throwing these markets into ever-greater surpluses, and if I am right that there will be “revulsion” from commodity derivative baskets, commodity prices will fall significantly further.
If there will be further price declines in the commodity complex the odds are that there will be more Amaranths among the “leveraged community.”
Pensions, endowments, and private client bankers are the principle investors in such hedge funds and they tend to be risk averse. I have no doubt that Amaranths’ 70% loss of assets in a matter of weeks has unsettled many. But such events, when they are singular events, tend to be treated as exceptions. They do not appear to most as the beginning of a trend or the surfacing of systemic risk. But if there is more than one such episode a threshold is often reached. Then there emerges fears of a systemic risk to a whole sector.
For this reason, I believe that, if there are more Amaranths among commodity-oriented hedge funds, the “revulsion” by institutional investors towards commodity baskets will spread to commodity related hedge funds. Except, with the examples LTCM and others in 1998, as well as that of Amaranth last year, such “revulsion” could be far more dramatic.
Herein, I believe, lies the greatest risk to commodity prices over the coming year.
A Post Script on Gold
The above account is a very bearish one as regards the base metals. I laid out this bearish case in more detail in my piece entitled “The Coming Nuclear Winter in Base Metals”.
I believe the same applies for the white metals, even though they are quasi precious.
Given the huge increase in exchange inventories of palladium I think there can be little doubt that palladium prices are where they are only because of hedge funds activities that are large in scale relative to the size of this little market.
My pessimism on silver is controversial and unpopular. I am sent analysis after analysis written by silver bulls. Demand outside photography, which is in decline, is supposedly soaring. Investment demand, it is alleged, is also very strong. Just look at the growth of the assets of the silver ETF, it is claimed.
When it comes to silver I believe the historical record is clear: silver demand was virtually stagnant over the decade from the mid 1990s to 2005. As for supply, despite the low silver price during that period, primary supply grew a respectable 3% per annum. In recent years, silver supply growth has increased. But the real expansion lies ahead. Primary lead and zinc production could expand by 11% per annum in 2007 and 2008. This is a major source of byproduct silver. Gold production in Mexico is also rising fast. It too is a major source of byproduct silver. Lastly, there is development of many smaller “close to pure” silver mines.
Below I argue that the price of gold is not too high because it is still “held down” by central bank actions. One can argue that the future prospect for gold is positive because some central banks will buy as other central banks liquidate. None of this can be said for silver. Central banks are no longer depressing the silver price because their stocks are now minimal. And no central banks are going to turn to low value, bulky silver as a reserve asset.
But, while the white metals may go the way of the base metals, gold should not. Its fundamentals are totally different from the base metals and the white metals.
From what I can tell, the base metals and silver are as “scarce as dirt.” There is no limit to the availability of ore bodies of these metals which can be developed profitably at prices well below prevailing levels.
But gold really does appear to be scarce. Over the last decade of low gold prices mine supply fell- in contrast to the supply of base metals and white metals which rose at trend rates. And even that stagnant level of gold mine supply was possible only because the gold miners high graded. Now, at higher prices even though new projects are being brought on, aggregate gold supply growth is restrained because of the need by miners to back off from their prior high grading practices. As an example, witness the projected halving of production at the great Yanachocha Mine.
And then there is the official sector whose activities are so important to the gold market. The official sector continues to sell physical gold which restrains the gold price. In addition, there has been huge investment and speculative flows into gold derivatives along with such flows into all other metal derivatives.
Somehow someone must take the other side in these derivative contracts. In base metals, it is consumers with inventory to hedge and miners and refiners with future production to hedge. But that does not happen in gold. Gold miners hedged in the past to a great degree when miners of other metals barely hedged at all. But now, having experienced losses on those misplaced hedging bets, gold miners, under pressure from share holders, have been reducing their hedges.
If so, who has taken the short side of the investment and speculative longs in gold derivatives in recent years? By process of elimination, I believe it must be, in some way or other, the official sector. (PPT)
Goldilocks oder Goldman Sachs ?.... 
