Commodities Daily Report

Wednesday| August 7, 7 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Reena Rohit Chief Manager Non-Agri Currencies and Commodities Reena.rohit@angelbroking.com (022) 2921 2000 Extn :6134 Anish Vyas Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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International Commodities
Overview
Indian Rupee touched all time low of 61.87-mark mark in yesterdays trade. US Trade Balance was at a deficit of $34.2 billion in month of June June. German Factory Orders gained by 3.8 percent in the prior month. UKs Manufacturing Production grew by 1.9 percent in month of June.

Market Highlights (% change)

as on 6 August, 2013 w-o-w 0.0 m-o-m -0.9 y-o-y -9.4

Asian markets are trading lower today on the back of statement from Federal Reserve member Charles Evans that it is quite likely the central bank will pullback its stimulus measures in current year. US Trade Balance was at a deficit of $34.2 billion in June as against a earlier deficit of $44.1 billion a month ago. Job Openings and Labor Turnover Summary (JOLTS) Job Openings was at 3.94 million in June from 3.83 million a month earlier. Investor's Business Daily (IBD) / TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism fell by 2 points to 45.1-mark mark in August with respect to 47.1 47.1-level in July. The US Dollar Index (DX) declined around 0.3 percent in yesterdays trade on the back of favorable economic data which showed signs of economic growth. However, positive economic data led to expectations that the Fed will pullback its stimulus measures coupled with rise in r risk aversion in global market sentiments in later part of the trade cushioned sharp fall in the currency. Additionally, statement from Federal Reserve member Evans that there is probability of central bank cutting its stimulus measures in current year prevented ented fall in currency currency. The DX touched an intra-day day low of 81.56 and closed at 81.66 on Tuesday. The Indian Rupee depreciated around 0.1 percent in yesterdays trading session. The currency depreciated on the back of weak global and domestic markets coupled led with strength in the DX in early part of the trade. Further, heavy dollar demand from importers also exerted downside pressure on the currency. However, sharp downside in the currency was cushioned as a result of appointment of Raghuram Rajan as new governor of Reserve Bank of India (RBI) raising hopes of new approach towards currency management. Additionally, expectations that RBI will announce measures to attract foreign inflows by way of raising debt through state run banks and companies prevented fall in the currency. The Rupee touched an all time low of 61.866 and closed at 60.78 on Tuesday. For the month of August 2013, FII inflows totaled at Rs.440.30 crores th ($72.42 million) as on 5 August 2013. Year to date basis, net capital th inflows stood d at Rs.66,990.90 crores ($12,633.50 million) till 5 August 2013. UKs Halifax House Price Index (HPI) increased by 0.9 percent in July as against a rise of 0.7 percent in June. Manufacturing Production grew by 1.9 percent in June from decline of 0.7 percent a month ago. Industrial Production increased by 1.1 percent in the month of June.

$/Euro (Spot)

1.3305

0.4

0.3

3.7

7.3

Dollar Index NIFTY

81.66

-0.3 0.3

-0.3

-3.7

2.8

5542.3

-2.5 2.5

-3.7

-5.5

4.9

SENSEX

18733.0

-2.3 2.3

-3.2

-3.9

2.4

DJIA

15518.7

-0.6 0.6

0.0

1.5

18.3

S&P

1697.4

-0.6 0.6

4.0

4.0

21.7

Source: Reuters

The Euro appreciated around 0.4 percent in the yesterdays trading session on the back of weakness in the DX coupled with favorable economic data from the region. However, sharp upside in the currency was capped as result of weak global markets in later part of the e trade. The Euro touched an intraintra day high of 1.3323 and closed at 1.33305 against the dollar on Tuesday. Italian Industrial Production rose by 0.3 percent in June as against a rise of 0.1 percent a month ago. Italian Prelim Gross Domestic Product (GDP) fell by 0.2 percent in Q2 of 2013 from earlier decline of 0.6 percent in Q1 of 2013. German Factory Orders gained by 3.8 percent in June with respect to decline of 0.5 percent a month earlier.

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Commodities Daily Report

International Commodities
Bullion Gold
Spot gold prices declined around 1.7 percent in the yesterdays trade on the back of weak global market sentiments in later part of the trade. Further, fall in SPDR gold holdings by 0.23 percent to 915.04 tonnes, marking the lowest level since February 200 2009 exerted downside pressure on prices. However, weakness in the DX cushioned sharp fall in the prices. The yellow metal touched an intra-day low of $1279.24/oz /oz and closed at $1281.3/oz in the yesterdays trading session. In the Indian markets, prices traded on a negative note and slipped around 3.2 percent and closed at Rs.27,614/10 /10 gms after touching a low of Rs.27,562/10 gms on Tuesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1281.3 Prev. day -1.7 as on 6 August, 2013 WoW -3.4 MoM 4.7 YoY -20.5

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (Oct13) MCX Gold (Oct13)

Rs/10 gms $/oz

28050.0

1.3

-1.6

7.6

-5.9

1280.5

-1.9

-3.3

5.6

-20.5

$/oz

1283.2

-1.5

-2.2

0.2

-20.4

Rs /10 gms

27614.0

-3.2

-3.8

6.9

-7.2

Silver
Taking cues from fall in gold prices along with downside in base metals complex, Spot silver prices declined by more than 1 percent in yesterdays trade. However, sharp downside in prices was cushioned on account of weakness in the DX. The white metal touched an intra intraday low of $19.44/oz and closed at $19.50 in yesterdays trading session. On the domestic front, prices fell around 0.5 percent on account of depreciation in the Rupee and closed at Rs.41,533/kg /kg after touching a low of Rs.41,460/kg on Tuesday. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Sept13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 19.5 42300.0 Prev day -1.1 0.0

Source: Reuters

as on 6 August, 2013 WoW -1.2 1.1 MoM 3.6 1.5 YoY -30.6 -21.3

$/oz $/ oz

1978.0 19.7

0.1 -1.0

0.5 0.2

2.4 2.9

-29.4 -29.2

Outlook
In todays session, we expect precious metals to trade lower on the back of weak global market sentiments. Additionally, declining trend in SPDR gold holdings will also exert downside pressure on prices. Further, strength in the DX will act as a negative factor actor. In the Indian markets, depreciation in the Rupee will prevent sharp fall in prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Oct13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for August 7, 2013 Support 1271/1266 27500/27400 19.20/19.0 41200/40700 Resistance 1285/1292 27800/27950 19.50/19.75 41900/42300

Rs / kg

41533.0

-0.5

-0.3

5.4

-22.2

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 1.2 percent in yesterdays trade taking cues from expectations that US Federal Reserve will reduce its bond buying program after statement from Federal Reserve member Evans said that tapering form central bank is quite e likely in current year. year.. However, decline in API crude oil inventories along with weakness in the DX cushioned sharp fall in prices. . Crude oil prices touched an intra intra-day low of $104.86/bbl and closed at $105.30/oz /oz in yesterdays trading session. On the domestic bourses, MCX crude August contract fell around 1.3 percent and crude oil prices touched an intra-day low of Rs.6,450/bbl and closed at Rs.6,459/bbl on Tuesday. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories declined more than expectations by 3.66 million barrels to 366.30 million barrels for the week ending on 2nd August 2013. Gasoline inventories fell by 971,000 barrels ls to 222.22 million barrels and whereas distillate inventories rose by 1.5 million barrels to 126.16 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at t 8:00pm IST and US crude oil inventories is expected to fall by 1.2 million barrels for the week ending on 2nd August 2013. Gasoline stocks are expected to drop by 0.8 million barrels whereas distillate inventories are expected to decline by 0.1 million barrels for the same period. Outlook From the intra-day day perspective, we expect crude oil prices to trade on a lower note on the back of expectations of cut in stimulus measures by Federal Reserve. . Further, weak global market sentiments coupled with strength in the DX will exert downside pressure on prices. However, sharp downside in prices will be cushioned on account of decline in API crude oil inventories in yesterdays trade and forecast for fall in US crude oil inventories. In the Indian dian markets, depreciation in the Rupee will prevent sharp fall in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Aug13 $/bbl Rs/bbl valid for August 7, 2013 Support 104.40/103.42 6400/6340 Resistance 106.03/107.01 6500/6560
Source: Telequote

Market Highlights - Crude Oil (% change)

as on 6 August, 2013 MoM 2.3 -1.1 YoY -2.9 14.2

$/bbl

108.2

-0.5

1.2

0.4

-3.4

Rs/bbl

6459.0

-1.3

2.8

2.6

24.9

Source: Reuters

Market Highlights - Natural Gas (% change)

as on 6 August, 2013 MoM -8.76 -6.63 YoY 12.65 27.23

WoW -8.76 -6.63

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

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International Commodities
Base Metals
The base metals complex traded on a negative note in the yesterdays trading session as a result of weak global market sentiments in later part of the trade. Further, favorable economic data from US led to expectations of pullback in stimulus measures which acted as a negative factor. Additionally, , mixed LME inventories scenario exerted downside pressure on prices. However, sharp downside in prices was cushioned on the back of weakness in the DX. In the Indian markets, depreciation in the Rupee cushioned sharp fall in prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Aug13) LME Aluminum (3 month) MCX Aluminum (Aug13) LME Nickel (3 month) MCX Nickel (Aug13) LME Lead (3 month) MCX Lead (Aug13) LME Zinc (3 month) MCX Zinc (Aug13)
Source: Reuters

as on 6 August, 2013 WoW MoM YoY

Last

Prev. day

$/tonne

6997.0 430.8 1786.5 108.3 13774.0 847.2 2106.3 129.3 1853.0

0.1 0.6 -1.0 -0.6 -0.7 -0.2 -1.1 -0.7 -0.9

4.0 4.8 0.4 2.6 1.4 3.0 3.7 4.9 1.0

-10.8 3.6 0.9 1.4 3.5 3.9 3.7 4.3 0.7

-7.8 3.0 -6.3 4.3 -12.8 -3.1 10.5 23.1 -0.7

Rs/kg

$/tonne

Rs /kg

$/tonne

Copper
Copper the leader of the base metals group gained marginally around 0.1 percent yesterday on the back of decline in LME Copper inventories by 0.3 percent which stood at 605,125 tonnes. Further, weakness in the DX coupled with favourable economic data from UK and Euro Zone supported an upside in prices. However, sharp upside in prices was capped on account of weak global market sentiments. Further, expectations of cut in stimulus measures by Federal Reserve also prevented fall in prices. The red metal touched an intra-day high of $7079.5/oz /oz and closed at $6997/oz in yesterdays trade. In the Indian markets, prices rose around 0.6 percent on account of depreciation in the Rupee and closed at Rs.430.20/kg .20/kg after touching an intra-day high of Rs.437.30/kg on Tuesday. Outlook For todays session, we expect base metals group to trade lower on the back of weak global market sentiments. Further Further, expectations that Federal Reserve will pullback its stimulus measures will also exert downside pressure on prices. Additionally, a stronger DX will act as a negative factor for prices. However, sharp downside will be cushioned on account of forecast for favorable industrial production from Germany. . In the Indian markets, depreciation in the Rupee will cushion sharp fall in prices on the MCX. Technical Outlook
Unit MCX Copper Aug13 MCX Zinc Aug 13 MCX Lead Aug 13 MCX Aluminum Aug13 MCX Nickel Aug 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for August 7, 201 2013 Support 427/424 112.0/111.20 128.50/127.80 107.50/106.80 842/835 Resistance 432/435 113.75/114.50 130.0/130.80 109.0/109.80 854/860

Rs /kg

$/tonne

Rs /kg

$/tonne

Rs /kg

112.8

-0.5

2.8

1.1

9.8

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 6th August 5th August Actual Change (%) Change

605,125 5,480,625 204,906 1,055,300 200,200

606,900 5,466,675 204,210 1,058,400 199,775

-1,775 13,950 696 -3,100 425

-0.3 0.3 0.3 -0.3 0.2

Technical Chart LME Copper

Source: Telequote

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International Commodities
Important Events for Today
Indicator Country Time (IST) Actual Forecast Previous Impact

BOE Gov Carney Speaks BOE Inflation Report German Industrial Production m/m Crude Oil Inventories 10-y Bond Auction

UK UK Euro US US

3:00pm 3:00pm 3:30pm 8:00pm 10:30pm

0.3% -1.2M -

-1.0% 1.0% 0.4M 2.67/2.6

High High Medium Medium Medium

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