Commodities Daily Report

Thursday| February 7, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

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. 6104view:

D Vijiya Rao - Research Analyst vijiya.d@angelbroking.com (022) 2921 2000 Extn. 6134view

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Commodities Daily Report

International Commodities
Overview
German Factory Orders increased by 0.8 percent in December. UKs Halifax House Price Index declined by 0.2 percent in January. Japans Core Machinery Orders increased by 2.8 percent in Dec. Asian markets are trading on a mixed note today on the back of Australian payrolls data which came on a favorable note, more than the economic forecast. On the other hand, Japans core machinery orders increased at slow pace which added downside pressure on the markets. US Dollar Index (DX) gained by 0.3 percent yesterday on account of rise in risk aversion in the global market sentiments which led to rise in demand for the low yielding currency. Additionally, political tension in between France and Germany showed signs of disagreement over Euro exchange rate also acted as a positive factor for the DX. However, sharp upside in the currency was capped as a result of US equities trading on a flat note. The currency touched an intra-day high of 79.93 and closed at 79.77 on Wednesday. The Indian Rupee traded on a flat note and depreciated marginally by 0.3 percent in yesterdays trading session. The currency depreciated in the later part of the trade and fell from three and half month high of 52.88 on account of dollar demand from oil refiners along with weak domestic market sentiments. However, in the initial part of the trade the currency had appreciated as a result of government stake sale in NTPC Limited. The currency touched an intra-day low of 53.26 and closed at 53.16 on Wednesday.

Market Highlights (% change)

as on 6 February, 2013 w-o-w 0.1 m-o-m 3.0 y-o-y -7.6

$/Euro (Spot)

1.352

-0.4

-0.3

3.5

1.9

Dollar Index NIFTY

79.77

0.3

0.6

-1.1

1.4

5959.2

0.0

1.6

0.2 11.7

0.0

SENSEX

19639.7

-0.1

-1.8

-0.1

11.4

DJIA

13986.52

0.1

0.5

4.5

8.6

S&P

1512.1

0.1

0.7

3.1

12.6

Source: Reuters

The Euro depreciated by 0.4 percent yesterday on the back of signs of political tension in the Euro Zone. France and German had a disagreement over the Euro exchange rate which affected the earnings of the region. However, sharp downside in the currency was cushioned as a result of German Factory Orders increased by 0.8 percent in December as against a decline of 1.8 percent a month ago. The Euro touched an intra-day low of 1.3493 and closed at 1.352 against dollar on Wednesday.

For the month of January 2013, FII inflows totaled at Rs 9,514.0 crores ($1,785.93 million) as on 6th February 2013. Year to date basis, net capital inflows stood at Rs.31, 573.10 crores ($5,845.30 million) till 6th February 2013.

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Commodities Daily Report

International Commodities
Bullion Gold
Spot gold prices gained by 0.3 percent in yesterday session. Gold prices traded in a narrow range ahead of the European Central Bank meeting scheduled on February 7, 2013. Strength in the DX however, restricted gains in the gold prices in yesterdays session. The yellow metal touched an intra-day high of $1,679.1/oz and closed at $ 1,677.11per ounce on Wednesday. On the MCX, Gold April contract ended 1.9 percent higher tracing strength in the spot gold prices along with depreciation in the rupee. Gold prices on the MCX closed at Rs. 30,711/10 gms on Wednesday after touching an intra-day high of Rs. 30,767/ 10gms. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1677.1 Prev. day 0.3 as on 6 February, 2013 WoW 0.0 MoM 1.3 YoY -2.5

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13)

Rs/10 gms $/oz

30300.0

0.0

0.7

0.9

9.7

1674.3

0.0

-0.2

1.6

-2.6

$/oz

1677.7

0.3

-0.1

1.8

-2.6

Rs /10 gms

30711.0

1.9

1.6

-0.3

#N/A

Silver
Market Highlights - Silver (% change) Spot silver rose 0.1 percent in yesterdays session. Silver prices traced strength in the spot gold prices. However, weakness in the base metals along with strength in the DX capped gains. The white metal touched an intra-day high of $31.87/oz and closed at $ 31.81 per oz on Wednesday. In the Indian markets, MCX silver prices ended on a flat note and closed at Rs. 58,376/kg on Wednesday and touched an intra-day high of Rs. 58,478/ kg. Strength in the spot silver prices along with depreciation in the Indian rupee supported an upside in the silver prices on MCX.
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg Last 31.8 58820.0 Prev day 0.1 -0.3

Source: Reuters

as on 6 February, 2013 WoW -0.7 0.8 MoM 5.3 2.8 YoY -5.4 5.7

$/oz $/ oz

3170.0 3186.1

-1.0 0.0

1.1 -0.9

8.1 6.6

-5.4 -5.5

Rs / kg

58376.0

0.0

-1.2

1.5

#N/A

Outlook
In todays session, we expect bullion prices to trade in the negative territory on account of strength in the DX and as investors adopt a cautious approach ahead of the European Central bank meeting. Positive economic data from the US, China and Euro zone region in the last week has caused the safe haven buying for the gold to reduce as the global economy recovers. In the Indian markets depreciation in the Rupee will cushion fall in the MCX gold prices. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for February 7, 2013 Support 1675/1670 30681/30595 31.76/31.63 58140/57910 Resistance 1682/1687

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

30797/30883 31.94/32.07 58544/58715

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Commodities Daily Report

International Commodities
Energy Crude Oil
Nymex crude oil prices traded on a flat note in yesterdays trading session taking cues from decline in supplies of 315,000 barrels in the last week at Cushing, Oklahoma, the biggest storage hub and delivery point for crude oil in US. Additionally, less than expected rise in US crude oil inventories also supported an upside in the crude oil prices. However, sharp upside in the crude oil prices was capped on account of strength in the DX. Crude prices touched an intra-day high of $96.99/bbl and closed at $96.62/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.1 percent and closed at Rs.5,139/bbl after touching an intra-day low of Rs.5,070/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories rose less than expected by 2.6 million barrels to 371.70 million barrels for the week ending on 1st February 2013. Gasoline stocks gained by 1.7 million barrels to 234.0 million barrels and whereas distillate stockpiles fell by 1.0 million barrels to 129.60 million barrels for the last week. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (March13) ICE Brent Crude (March13) MCX Crude (Feb 13) Unit $/bbl $/bbl $/bbl Last 96.4 118.1 96.6 Prev. day -0.2 0.0 0.0 WoW -1.6 1.2 -1.3 as on 6 February, 2013 MoM 3.6 3.6 3.8 YoY -0.5 1.4 -0.3

$/bbl

116.7

0.2

1.6

4.9

0.7

Rs/bbl

5139.0

-0.1

-1.4

0.5

#N/A

Source: Reuters

Market Highlights - Natural Gas (% change)

as on 6 February, 2013

Unit $/mmbtu Rs/ mmbtu

Last 3.418 183.9

Prev. day 0.56 2.79

WoW 2.49 3.20

MoM 3.99 1.83

YoY 34.04 13.24

Natural Gas
EIA Inventories Forecast: US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to decline by 135 billion cubic feet (bcf) for the week ending on 1st February 2013. Outlook In todays session, we expect crude oil prices to trade higher on expectation of rise in the demand while supplies at the Cushing, Oklahoma, dropped. However, sharp upside in the prices will be capped owing to strength in the DX. Depreciation in the Indian Rupee will support an upside in the crude oil prices on the MCX.

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Outlook
Unit NYMEX Crude Oil MCX Crude Feb 13 $/bbl Rs/bbl

Technical Chart NYMEX Natural Gas

Support 96.25/95.55 5121/5087

Resistance 97.50/98.20 5172/5206

Source: Telequote

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Commodities Daily Report

International Commodities
Base Metals
The base metals pack traded on bearish note in yesterdays session on the back of weakness in the global markets and strength in the DX. Subdued trading activity in Chinese market ahead of Lunar New Year festival in the next week also added to the losses in the base metals. Unfavourable Housing price index from the UK region also added to the losses of the industrial metals. However, decline in the LME inventories in most of the metals cushioned fall in the prices. Depreciation in the Indian Rupee cushioned fall in the base metals pack on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) MCX Aluminum (Feb13) LME Nickel (3 month) MCX Nickel (Feb13) LME Lead (3 month) MCX Lead Feb13) LME Zinc (3 month) MCX Zinc (Feb13)
Source: Reuters

as on 6 February, 2013 WoW 0.0 MoM 1.6 YoY 8.1

Last 8235.0

Prev. day -0.6

$/tonne

Rs/kg

439.7

-0.7

-0.6

-2.5

5.0

$/tonne

2102.0

-0.8

0.1

1.7

4.1

Rs /kg

110.6

-0.8

0.5

-2.0

2.3

Copper
Copper prices declined 0.6 percent in yesterdays session. Dull appetite by the Chinese buyers ahead of Lunar New Year festival and strength in the DX weighed on the prices. Additionally, decline in the House price Index of UK which was released yesterday also added to the losses in the red metal. Continued rise in the LME inventories of copper also acted as a bearish factor for the copper prices. LME Copper inventories increased 0.37 percent yesterday and stood at 386,500 tonnes on Wednesday as against 38,050 tonnes on 05th February 2013 Copper prices on LME touched an intra-day low of $8,207 per tonne and closed at $8,235 per tonne on Wednesday. In the domestic markets MCX copper fell 0.7 percent and closed at Rs. 439.7 per kg on Wednesday. Weakness in the international copper prices caused MCX copper to remain lower. However, depreciation in the rupee cushioned fall in the MCX copper prices in yesterdays session. Outlook In todays session, we expect base metals to trade lower due to weak global market sentiments along with strength in the DX. Investors are adopting a cautious approach ahead of the European Central Bank meeting which commences today. Subdued trading activity in China ahead of Lunar New Year festival in the next week is also expected to weigh on the prices. Depreciation in the Indian Rupee will cushion fall in the base metals prices on the MCX. Technical Outlook
Unit MCX Copper Feb13 MCX Zinc Feb 13 MCX Lead Feb 13 MCX Aluminum Feb13 MCX Nickel Feb 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for February 7, 2013 Support 438.20/436.70 114.05/113.65 127.80/127.10 110.15/109.70 967/960 Resistance 440.80/442.20 114.95/115.45 129.15/129.85

$/tonne

18350.0

-2.1

0.1

5.2

-1.2

Rs /kg

974.1

-2.0

-0.2

1.3

-8.1

$/tonne

2420.3

5.4

-1.0

3.3

19.5

Rs /kg

128.6

-1.3

-1.1

0.1

20.6

$/tonne

2166.0

6.5

-0.6

6.0

16.7

Rs /kg

114.5

-0.6

0.7

2.3

10.2

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 6th February 386500 5147750 150672 1197075 289900 5th February 385050.00 5158200 150834 1199675 290000 Actual Change 1,450 -10,450 -162 -2,600 -100 (%) Change 0.38 -0.20 -0.11 -0.22 -0.03
Source: Reuters

Technical Chart LME Copper

Source: Telequote

111.25/111.90 980.40/987.60

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Commodities Daily Report

International Commodities
Important Events for Today

Indicator Core Machinery Orders m/m EU Economic Summit Manufacturing Production m/m Trade Balance Industrial Production m/m BOE Gov-Designate Carney Speaks French 10-y Bond Auction German Industrial Production m/m Asset Purchase Facility Official Bank Rate MPC Rate Statement Minimum Bid Rate ECB Press Conference Unemployment Claims Prelim Nonfarm Productivity q/q Prelim Unit Labor Costs q/q FOMC Member Stein Speaks NIESR GDP Estimate Natural Gas Storage

Country Japan EU UK UK UK UK EU EU UK UK UK EU EU US US US US UK UK

Time (IST) 5:20 am Day 1 3:00 pm 3:00 pm 3:00 pm 3:15pm Tentative 4:30 pm 5:30 pm 5:30 pm Tentative 6:15 pm 7:00 pm 7:00 pm 7:00 pm 7:00 pm 8:00 pm 8:30 pm 9:00pm

Actual 2.8% -

Forecast -0.7% 0.7% -8.9B 0.7% 0.2% 375B 0.50% 0.75% 361K -1.3% 3.1% -135B

Previous 3.9% -0.3% -9.2B 0.3% 2.07|1.7 0.2% 375B 0.50% 0.75% 368K 2.9% -1.9% -0.3% -194B

Impact Medium High High Medium Low High Medium Medium High High High High High High Medium Medium Medium Medium Low

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