Commodities Daily Report

Wednesday| November 14, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Overview:

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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International Commodities
Overview

US IBD/TIPP economic optimism declined to 48.6 levels in November. German ZEW economic sentiment fell to 15.7 percent in November. ZEW economic sentiment of EU declined to 2.6 levels in current month.

Market Highlights (% change)

as on 13 November, 2012

w-o-w
-0.8

m-o-m
-3.8

y-o-y
-9.1

Asian markets are trading on a firm note as financial companies gain and Chinese once in a decade meeting to choose the leaders draws to a close. US Investor's Business Daily (IBD), Techno Metrica Institute of Policy and Politics (TIPP) Economic Optimism declined unexpectedly by 5.4 points to 48.6 levels in November as against 54 levels in the last month German ZEW economic sentiment fell to 15.7 percent in the month of November taking cues from the unresolved issues of the Greece as compared to 11.5 levels in the last month. ZEW economic sentiment of the European region also witnessed a decline and stood at 2.6 level in November as compared to a decline of 1.4 levels in the last month. US Dollar swung between gains and losses and settled on a flat note on the back of rise in the risk aversion amongst market participants as fiscal cliff issues in the US created worries of slowdown of the economy. However, some of the losses in the index were erased taking cues from firmness in the US equities. US equities gained initially on the back of firmness in the Home Depot Inc. stocks and as Spanish bond yields reversed earlier gains. The currency touched an intra-day high of 81.32 and closed at 81.14 levels in yesterdays session. Indian Rupee depreciated 0.2 percent on the back of risk aversion amongst market participants and concerns of widening current account deficit and demand for dollars. Additionally, weak Index of Industrial Production of India also resulted in the depreciation of the Indian rupee. Rupee touched an intra-day low of 55.03 and closed at 55.0 on Monday. For the current month FII inflows totaled at Rs. 3,166.60 crores till 9th November 2012. While year to date basis, net capital inflows stood at Rs. 96,861.50 crores till 9th November 2012.

INR/$ (Spot)

55

$/Euro (Spot)

1.2702

0.0

-0.7

-1.3

-6.6

Dollar Index

81.14

0.0

0.4

1.4

4.1

NIFTY

5667.0

-0.3

-0.7

0.3

#N/A

SENSEX

18618.9

-0.3

-0.8

-0.1

#N/A

DJIA

12756.2

-0.5

-2.7

-4.4

7.3

S&P

1374.5

-0.4

-3.8

-3.8

8.8

Source: Reuters

Euro ended on a flat note due to weak global market sentiments along with strength in the DX. Delay in the Greece bailout also exerted a downside pressure on the currency. Additionally, weak economic data from the region also exerted a downside pressure on the Euro. The currency touched a low of 1.266 and closed at 1.2702 in yesterdays session. The Euro Finance ministers gave Greece two more years to manage its budget deficit in order to curtail the sovereign debt crisis. This cushioned sharp fall in the currency towards the end of the session. French Prelim Non-Farm Payrolls q/q declined further to -0.3 percent in the third quarter as compared to the previous decline of -0.1 in the last quarter.

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Bullion Gold
Spot gold prices swung between gains and losses and ended 0.2 percent lower due to rise in the risk aversion amongst the market participants due to continued concerns of the Euro zone and worries of fiscal cliff issues in the US are creating bearish market sentiments. Strength in the DX in the early part of the trade also exerted downside pressure on the gold prices. The yellow metal touched an intra-day low of $1,717.69/oz and closed at $1,730/oz on Tuesday. Gold prices on MCX settled in the negaitve territory taking cues from weakness in the spot gold prices. However, demand ahead of Diwali cushioned sharp fall in the Gold prices on MCX in yesterdays session. Gold prices on MCX touched a low of Rs. 31,670 per 10 gms and settled at 31,719 per 10 gms on Tuesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Dec12) MCX Gold (Dec12) Unit $/oz Rs/10 gms $/oz
1724.2 -0.4 2.5 -2.2 -2.0 #N/A #N/A #N/A #N/A #N/A

as on 13 November, 2012 Prev day

Last
1724.9

WoW
2.4

MoM
-2.1

YoY
-1.9

1726.3

-0.5

2.5

-2.0

-1.7

$/oz Rs /10 gms

Source: Reuters

Silver
Spot silver prices gained 0.2 percent on account of strength in the base metals pack on Tuesday. However, sharp gains in the prices were capped on the back of weakness in the spot gold prices along with strength in the DX. The white metal touched an intra-day high of $32.8/oz and closed at $32.5/oz on Tuesday. In the Indian markets prices witnessed profit booking at higher levels and settled at Rs.60,804/kg after touching an intra-day low of Rs.60,587/kg in yesterdays trading session.

Market Highlights - Silver (% change)

as on13 November, 2012 WoW

Prev day
0.2 #N/A

MoM
-4.4 #N/A

YoY
-4.7 #N/A

3258.0

-0.2

5.4

-3.6

-3.4

3247.8 60804.0

-0.1 -0.3

4.4 3.8

-4.7 -2.2

-4.7 6.5

Source: Reuters

Outlook
In todays session we expect precious metals to trade on a firm note due to mixed global market sentiments along with weakness in the DX. Expectations that the Spain might seek for bailout might also support an upside in the prices. In the domestic markets prices are expected to trade in a positive manner. Technical Outlook
Unit Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for November 14, 2012 Support 1724/1719 31650/31550 32.40/32.24 60400/60100 Resistance 1734/1738 31820/31900 32.83/33.02 61200/61550

Technical Chart Spot Gold

Source: Telequote

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International Commodities
Energy Crude Oil
Nymex crude oil prices declined 0.2 percent due to weak demand from the consuming nations. Further, decline in the demand outlook for the fourth quarter and 2013 by the International Energy Agency (IEA) also exerted a downside pressure on the crude oil prices. Additionally strength in the DX along with bearish market sentiments also added to the losses of the crude oil prices. Crude oil prices touched an intra-day low of $84.57/bbl and closed at $85.4/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.8 percent and closed at Rs.4,680/bbl after touching an intra-day low of Rs.4673/bbl on Tuesday. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Dec12) ICE Brent Crude (Dec12) MCX Crude (Nov12) Unit $/bbl $/bbl Last
85.4 109.9

as on 13 November, 2012 WoW

Prev. day
-0.2 -1.3

MoM
-6.4 -5.7

YoY
-12.6 -3.9

$/bbl

85.4

-0.2

-0.3

-6.4

-12.7

$/bbl

108.3

-0.7

0.5

-5.3

-4.8

Rs/bbl

4680.0

-0.8

0.3

-4.1

-5.2

Source: Reuters

Natural Gas
Nymex natural gas prices gained 5.07 percent yesterday on the back of colder weather over the eastern half of the nation and expectations of lower inventories. However, sharp upside in the prices was capped as a result of strength in the DX. Gas prices touched an intra-day high of $3.752/mmbtu and closed at $3.749/mmbtu on Tuesday. On the domestic front, prices increased around 3.3 on account of taking cues from strength in the international prices and closed at Rs.203.4/mmbtu after touching an intra-day high of Rs.204.20/mmbtu in yesterdays trading session. Outlook In the intra-day, we expect crude oil prices to trade on a positive note on the back of mixed global market sentiments along with weakness in the DX. Expectation of rise in the US crude oil inventories might cap sharp gains in the prices. In the domestic markets crude oil prices are expected to trade on a firm note taking cues from the international market. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Nov 12 $/bbl Rs/bbl valid for November 14, 2012 Support 85.05/84.14 4660/4610 Resistance 86.33/87.06 4730/4770

Market Highlights - Natural Gas (% change)

as on 13 November, 2012

Unit $/mmbtu Rs/ mmbtu

Last
3.749 203.4

Prev. day
5.07 3.30

WoW
3.79 4.47

MoM
4.25 7.05

YoY
2.52 9.71

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

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International Commodities
Base Metals
The base metal pack traded on a positive note on the back of expectation of rise in the demand from the major consuming nations particularly US and China. Additionally, weakness in the DX towards the end of the session along with decline in LME inventories supported an upside in the metal prices. The gains in the metals may be capped by the persistent concerns on the on euro zone resolution and the issues related to the US fiscal cliff. In the Indian markets weak industrial output data pressurised the copper prices on MCX. However, sharp downside in the prices was cushioned due to depreciation in the rupee on Monday. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum (Nov12) LME Nickel (3 month) MCX Nickel (Nov12) LME Lead (3 month) MCX Lead (Nov12) LME Zinc (3 month) MCX Zinc (Nov12)
Source: Reuters

as on 13 November, 2012 WoW

Last
7660.0

Prev. day
0.1

MoM
-6.1

YoY
2.6

$/tonne

Rs/kg

418.8

-0.7

-0.5

-4.3

10.7

$/tonne

1978.5

0.4

3.5

-1.4

-8.0

Rs /kg

107.6

-0.5

3.1

1.5

-0.2

Copper
Copper, the leader of the base metals complex gained around 0.6 percent yesterday on account of expectation of rise in the demand from the key consuming nations. The decline in the LME Copper inventories by 0.7 percent which stood at 245,500 tonnes also supported the metal prices to move upwards. Weakness in the DX towards the end of the session also acted as a supportive factor for the copper prices on Tuesday. However, the metal remained volatile due to persistent concerns on the unresolved euro debt crisis and looming issues of the US fiscal cliff. The red metal closed at $7,660.0/tonne in yesterdays trading session. Outlook From the intraday perspective, base metal prices are expected to trade on a positive note due to mixed global market sentiments along with weakness in the DX. However, sharp gains in the prices are expected to be capped as the market participants are awaiting outcome of the Chinese Congress meeting for the leadership transition. Technical Outlook
Unit MCX Copper Nov12 MCX Zinc Nov12 MCX Lead Nov12 MCX Aluminum Nov12 MCX Nickel Nov12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for November 14, 2012 Support 413/416 102.7/103.5 117.3/118.1 106/106.8 873/877 Resistance

$/tonne

16050.0

-0.1

0.4

-9.1

-11.7

Rs /kg

881.5

-0.5

0.8

-6.1

-4.4

$/tonne

2145.0

-1.0

0.9

-2.4

10.4

Rs /kg

118.8

-1.3

1.7

2.0

20.9

$/tonne

1930.0

0.1

3.4

-2.4

2.1

Rs /kg

104.1

-1.0

2.8

0.1

8.4

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 12th November 245500 5105800 129792 1158350 331025 9th November 246275 5095775 130236 1161000 334000 Actual Change -775 +10025 -444 -2650 -2975 (%) Change -0.31 0.20 -0.34 -0.23 -0.89
Source: Reuters

Technical Chart MCX Copper

Source: Telequote

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Important Events for Today

Indicator Federal Budget Balance FOMC Member Yellen Speaks Claimant Count Change Unemployment Rate Industrial Production m/m Italian 10-y Bond Auction BOE Gov King Speaks BOE Inflation Report Core Retail Sales m/m PPI m/m Retail Sales m/m Core PPI m/m Business Inventories m/m

Country US US GBP GBP Euro Euro GBP GBP US US US US US

Time (IST) 12:30 am 2:00am 3:00 pm 3:00 pm 3:30 pm Tentative 4:00 pm 4:00 pm 7:00 pm 7:00 pm 7:00 pm 7:00 pm 8:30pm

Actual -

Forecast -113.5B -0.5K 7.9% -1.6%

Previous 75.0B 0.4% -4.0K 7.9% 0.6% 4.92|1.4

Impact Medium Medium Medium Medium -

0.3% 0.2% 0.0% 0.2% 0.5%

1.1% 1.1% 1.1% 0.0% 0.6%

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