Commodities Daily Report

Thursday| November 29, 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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Commodities Daily Report

Thursday| November 29, 2012

International Commodities
Overview
Asian markets are trading on a firm note on optimism that US law makers might be able to resolve the fiscal cliff issue. Further, expectation of stimulus measures to be announced by the new government in power in Japan next month is also creating positive market sentiments. Purchases of new U.S. homes dropped 0.3 percent to a 368,000 annual pace in October as compared to 369,000 rate in September. The US Dollar Index (DX) swung between gains and losses and settled 0.2 percent lower in yesterdays session. The index witnessed strength in the early part of the trade on the back of rise in the risk aversion amongst market participants as the worries of fiscal cliff issues of the US which has not been resolved yet also created bearish market sentiments. There were also concerns about how the agreement upon the aid to Greece would be implemented. This increased the demand for the low yielding currency that is US Dollar Index (DX). However, towards the end of the session optimism amongst US lawmakers that they would be able to resolve the fiscal cliff erased the gains and the currency settled in the negative territory. US equities also witnessed a volatile session in yesterdays session. The stocks initially witnessed a selling pressure on the concerns of the fiscal cliff but with affirmative statement by the speaker of House John Boehner and US President Barack Obama that an agreement might be reached created bullish market sentiments. The index touched a intraday low of 80.28 and closed at 80.28 on Wednesday.US equities settled on a mixed note taking cues from positive economic data from the US economy. However, sharp upside in the markets was capped due to debt concerns of the Euro zone region. The index touched a intra-day high of 81.08 and closed at 80.95 on Tuesday. The Indian Rupee continued to appreciated 0.3 percent on account of stable outlook by the Moodys and optimism that the government might be able to negotiate and enact the earlier reforms announced in the parliament. Further, agreement amongst the European leaders and IMF to provide aid to Greece also created positive market sentiments. Weakness in the DX on Tuesday also caused rupee to appreciate. Additionally, sustained capital inflows from the foreign institutions are also supporting appreciation in the rupee. It touched an intra-day high of 55.35 and closed at 55.45 on Tuesday. For the current month FII inflows totaled at Rs. 6419.70 crores till 27 November 2012. While year to date basis, net capital inflows stood at Rs. th 100114.70 crores till 27 November 2012
th

Market Highlights (% change)

Last INR/$ (Spot)
55.45

as on 28 November, 2012

Prev day
0.3

w-o-w
-0.6

m-o-m
-3.5

y-o-y
-6.0

$/Euro (Spot)

1.2951

0.1

1.0

0.1

-2.7

Dollar Index

80.28

-0.2

-0.9

0.1

1.1

NIFTY

5727.5

1.6

2.8

0.4

21.6

SENSEX

18842.1

1.6

2.8

0.4

20.0

DJIA

12985.11

0.8

1.2

-0.9

12.7

S&P

1409.9

0.8

1.4

-0.1

18.2

Source: Reuters

The Euro swung between gains and losses and settled 0.1 percent in yesterdays session. The currency declined in the early part of the trade on concerns as to how the deal agreed on would be implemented. However, with optimism that the fiscal cliff issues might be resolved amongst the US lawmakers created positive market sentiments thereby weakening the DX. This supported an upside in the currency. Additionally, positive economic data from the region also added to the gains of the currency. The currency touched an intra-day high of 1.2954 and closed at 1.2951 on Wednesday. German Prelim CPI m/m- the consumer price index is expected to decrease by 0.1% on October 2012 as compared to 0.0% in September. The rate of growth in M3 money supply rose to 3.9 percent in October from 2.6 percent in September.

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Commodities Daily Report

Thursday| November 29, 2012

International Commodities
Bullion Gold
Spot gold prices declined 1.3 percent in yesterdays session on the back of worries over the fiscal cliff among the US law makers. Further, doubts over implementation of the deal agreed upon amongst European leaders and International Monetary Fund on aid to Greece created bearish market sentiments. This strengthened the US Dollar Index (DX) thereby exerting a downside pressure on the gold prices. However, towards the end of session affirmation by the Speaker of the House Boehner and US President Barack Obama that the fiscal cliff issue might be resolved erased some of the losses in gold due to weakness in the DX. The yellow metal touched an intra-day low of $1,705.64 per ounce and closed at $ 1,719.31 per ounce on Wednesday. On the MCX, Gold December contract ended 1 percent higher taking cues from bearishness in the spot gold prices. Gold prices on the MCX closed at Rs 31,903/10 gms after touching a low of Rs. 31,768/ 10gms Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Dec12) MCX Gold (Dec12) Rs/10 gms $/oz 32270
1708.0

as on 28 November, 2012 Prev day

-1.3

Unit $/oz

Last
1719.3

WoW
-0.5

MoM
0.5

YoY
0.4

-0.40
-2.2

1.22
-0.9

5.05
-0.5

13.83
-0.4

$/oz

1716.5

-1.5

-0.7

0.3

0.3

Rs /10 gms

31903.0

-1.0

0.3

2.8

#N/A

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz Rs/1 kg $/oz $/ oz Last
33.7

as on 28 November, 2012 WoW

1.2

Silver
Spot silver prices declined 0.9 percent in yesterdays session taking cues from weakness in the spot gold prices. Strength in the DX in the early part of the trade weighed on the prices. Weakness in the base metals pack also pressurized prices of silver in yesterdays session. The white metal touched an intra-day low of $32.89/oz and closed at $33.73 /oz on Wednesday. In the Indian markets, MCX silver prices fell 0.7 percent and closed at Rs. 63,110/kg on Wednesday and touched a low of Rs. 61,951 /kg

Prev day
-0.9

MoM
5.2

YoY
5.3

64070.0 33.9

-0.2 -0.6

2.8 2.5

6.4 6.9

14.2 5.8

3368.1

-0.9

1.0

5.2

4.7

63110.0

-0.7

1.7

5.8

#N/A

Rs / kg
Source: Reuters

Outlook
Technical Chart Spot Gold In todays session we expect precious metals to trade on a firm note due to positive global market sentiments along with weakness in the DX. Optimism that US law makers might be able to resolve the fiscal cliff issue and agree on a budget deal is also support an upside in the gold prices. In the domestic markets appreciation in the Indian rupee will however cap sharp gains in the precious metals on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for November 29, 2012 Support 1717/1710 31820/31700 62800/62500 33.53/33.37 Resistance 1725/1729 31980/32050
Source: Telequote

63900/63500 33.91/34.12

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Commodities Daily Report

Thursday| November 29, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices gained 1.3 percent as crude oil inventories declined unexpectedly and on optimism that US law makers might arrive on a budget deal. Weakness in the DX in the later part of the day also supported an upside in the crude prices on Wednesday. Crude oil prices touched an intra-day high of $87.34/bbl and closed at $86.49/bbl on Wednesday. On the domestic bourses, prices declined 1.4 percent and closed at Rs.4,819/bbl after touching a low of Rs.4,719/bbl on Wednesday. On the domestic bourses, prices declined 2.6 percent and closed at Rs.4806/bbl after touching a low of Rs.4780/bbl on Tuesday. Depreciation in the Indian rupee however, cushioned sharp fall in the crude prices on MCX. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Dec12) ICE Brent Crude (Dec12) MCX Crude (Nov12) Unit $/bbl $/bbl $/bbl Last
86.1 109.2 88.3

as on 28 November, 2012 WoW

-1.1 -2.4 1.0

Prev. day
-0.8 -1.0 1.3

MoM
0.3 -0.4 2.3

YoY
-12.8 -0.7 -10.1

$/bbl

109.5

-0.3

-1.2

0.0

0.5

Rs/bbl

4819.0

-1.4

-0.1

3.5

#N/A

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Nov 12)

as on 28 November, 2012

EIA inventories Forecast

According to the US Energy Information Administration (EIA), crude inventories were down 347,000 barrels last week. Gasoline stockpiles supplies gained 3.87 million barrels in the week ending Nov. 21. Distillate inventories, which include heating oil and diesel fell 800,000 barrels last week. Outlook In the intra-day, we expect crude oil prices to trade on a positive note owing to upbeat global market sentiments. Additionally weakness in the DX along with unexpected decline in the crude oil inventories is also expected to push prices upwards. In the domestic markets appreciation in the Indian Rupee will cap sharp gains in the MCX crude prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Dec 12 $/bbl Rs/bbl valid for November 29, 2012

Unit $/mmbtu Rs/ mmbtu

Last 3.696 210.3

Prev. day -1.94 0.53

WoW -3.55 0.19

MoM 7.63 15.61

YoY 9.87 10.05

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Support 89.11/86.56 4880/4740

Resistance 88.38/89.30 4840/4890

Technical Chart Nymex Natural Gas

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Commodities Daily Report

Thursday| November 29, 2012

International Commodities
Base Metals
The base metal pack traded on a bearish note on the back of weak sentiments as the Euro zone debt concerns deepened after France credit rating was downgraded by the Moodys. However, sharp downside in the prices was cushioned due to positive housing sector data from the US economy. Strength in the DX towards the end of the session also exerted downside pressure on the base metals. In the Indian markets depreciation in the Indian Rupee supported an upside in the base metals on the MCX. 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 28 November, 2012 WoW

0.4

Last
7748.5

Prev. day
-0.6

MoM
-0.9

YoY
4.2

$/tonne

Rs/kg

432.5

0.0

1.6

1.8

#N/A

$/tonne

1999.0

-0.3

3.2

3.9

-1.5

Copper
Copper, the leader of the base metals complex fell 0.6 percent on the back of worries amongst market participants over the resolution over the fiscal cliff issues. Strength in the DX in the early part of the trade also exerted downside pressure on the copper prices. Additionally, rise in LME Copper inventories by 0.17 percent also exerted downside pressure on the copper prices. LME Copper stocks stood at 249,975 tonnes. The red metal closed at $7,748 per tonne after touching an intraday low of $7,681 per tonne on Wednesday. On the domestic front, Copper settled on a flat note on Wednesday. Prices of copper closed at Rs.432.5 per kg after touching an intra-day low of Rs.429.1/kg taking cues from bearishness in the international prices. Outlook From the intraday perspective, base metal prices are expected to trade on positive note taking cues from firm global market sentiments along with weakness in the DX. Expectation that a budget deal might be achieved amongst US lawmakers over the fiscal cliff is likely to ease worries that demand could decline. Appreciation in the Rupee will however, restrict sharp gains in the copper prices on MCX. 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 29, 2012

Rs /kg

111.2

0.2

4.7

8.4

#N/A

$/tonne

16960.0

0.3

1.8

5.7

-1.8

Rs /kg

942.1

0.9

2.8

9.1

#N/A

$/tonne

2189.8

-0.7

1.4

8.2

8.0

Rs /kg

122.0

-0.2

2.6

11.5

#N/A

$/tonne

1981.5

-0.3

2.7

8.0

1.7

Rs /kg

109.5

0.1

4.4

12.7

#N/A

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 27th November
249975 5178250 136386 1200450 361475

26th November
249550 5174500 134448 1197325 361475

Actual Change
425 3750 1938 3125 0

(%) Change
0.2 0.1 1.4 0.3 0.0 Source: Reuters

Technical Chart MCX Copper

Support 430/427 108.5/107.8 121.1/120.4 110.7/110.1 933/926 Resistance 434/438 110.4/111.2 122.5/123.3 111.8/112.3 949/956
Source: Telequote

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Commodities Daily Report

Thursday| November 29, 2012

International Commodities
Important Events for Today

Indicator Beige Book Retail Sales y/y Nationwide HPI m/m German Unemployment Change Italian 10-y Bond Auction BOE Gov King Speaks BOE Financial Stability Report CBI Realized Sales Prelim GDP q/q Unemployment Claims Pending Home Sales m/m Natural Gas Storage German Buba President Weidmann Speaks

Country GBP GBP GBP EUR EUR GBP GBP GBP US US US US EUR

Time (IST) 3:00pm 3:00pm 12:30pm 2:25pm Tentative 4:00pm 4:00pm 4:30pm 7:00pm 7:00pm 8:30pm 9:00pm 9:50pm

Actual -1.2%

Forecast 1.0% -0.7% 0.2% 15K

Previous 1.0% 0.4% 0.6% 20K 4.81|1.5

Impact Medium Medium Medium Medium Medium High Medium

19 2.8% 392K 0.9% -5B

30 2.0% 410K 0.3% -38B

Medium High High High Low Medium

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