Though hedging schemes may look lucrative, large gold mining companies lost a fortune during the 12-year gold rally that ended in 2011.
India’s government is trying hard to intervene in its gold demand. India has a large trade deficit, and its import bill mostly constitutes oil and gold.
The EIA expects less natural gas production at six key US shales by April 2016 compared to February 2016.
According to the EIA’s Drilling Productivity Report released on March 7, 2016, it expects crude oil production to fall at five key US shales by April 2016.
The U.S. Energy Information Administration estimates that the Haynesville Shale produced 6.2 billion cubic feet per day of natural gas in February 2016.
According to the EIA, the Utica Shale in eastern Ohio has become one of the fastest-growing natural gas–producing regions in the United States.
According to the EIA, the Eagle Ford Shale’s natural gas production has risen 305% in the last eight years. In February 2008, it produced 1.6 Bcf per day.
The number of active rigs in the Marcellus Shale fell from 36 in January to 30 in February. In February 2015, there were 71 drilling rigs in the region.
The EIA;s most recent Drilling Productivity report estimates that the Niobrara Shale produced 438,000 bpd (barrels per day) of crude oil in February 2016.
On March 7, 2016, the EIA estimated that the Bakken Shale produced 1.1 MMbpd (million barrels per day) of crude oil in February 2016.
The EIA estimates that the Permian Basin’s crude oil production amounted to ~2.0 MMbpd (million barrels per day) in February 2016.
Gold is a store-of-value security. Rising inflation can be negative for gold. Gold has a positive relation to deflation rather than inflation.
The US dollar pushed precious metals including gold, silver, platinum, and palladium. They rose 1.1%, 2.8%, 5.2%, and 10.1%, respectively, on a trailing five-day basis.
Japan and European nations are falling into a negative rate territory. Investors should watch the direction of gold prices. Gold is negatively related to interest rates.
Precious metals have been the leading performers during the recent market turbulence and have provided positive returns. Gold has gained a whopping 18.3% since the beginning of 2016.
Gold future prices for April delivery dropped by 0.09%, further away from its 13-month high price of $1,280.70 per ounce. The futures settled at $1,262.90 per ounce on Tuesday, March 8, 2016.
The supply-demand imbalance will further push down potash prices in the coming years. It will hurt companies such as PotashCorp, Mosaic, Intrepid Potash (IPI), and Agrium (AGU).
Last week, Muriate of Potash prices fell below the 15-year median price of $290 per metric ton. Investors should be concerned about that.
Potassium (or potash) fertilizer is the third important fertilizer of the three macronutrients required for crops. The situation for potash producers is far worse than for phosphate producers.
The average price of ammonia for the week ending March 4, 2016, stood at $310 per metric ton compared to $311 per metric ton a week ago.