Commodities Daily Report

Tuesday| August 7, 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 Associate anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Tuesday| August 7, 2012

International Commodities
Overview
European Sentix Investor Confidence declined 30.3-mark in August. UKs Halifax House Price Index (HPI) declined by 0.6 percent in July. LME Copper inventories declined by 0.5 percent yesterday. Japans Leading Indicators increased to 92.6 percent in the last month. US Dollar Index (DX) declined by 0.2 percent in yesterdays trade.
INR/$ (Spot) 55.52 0.4 -0.2 0.6 -19.5 Last Prev day w-o-w m-o-m y-o-y

Market Highlights (% change)

as on 6 August, 2012

Asian markets are trading on a firm note taking cues from upbeat global market sentiments triggered by the optimism that positive efforts by the European leaders might curtail the Euro zone debt. US Dollar Index weakened 0.2 percent amidst positive global market sentiments and rise in the risk appetite after German chancellor Angela Merkel government backed the European Central banks (ECB) bond buying programme to curtail Euro zone debt. This led to decline in the low yielding currency that is US Dollar Index. US equities also ended on a positive note eyeing better results in the Euro group and optimism that German government will back the bond buying plan of the ECB to trim the Euro zone debt. The currency touched an intra-day low of 82.13 and closed at 82.29. The Indian Rupee appreciated by 0.4 percent yesterday taking cues from upbeat global market sentiments along with more expected increase in the US non-farm employment payrolls. Additionally, Indian equities also ended on a positive note which supported upside in the currency. However, sharp positive aspect in the currency was capped on the back of negative outlook by the Fitch credit ratings for retail sector and real estate sector. It touched an intra-day high of 55.23 in yesterdays trading session and closed at 55.52 on Monday. For the current month, FII inflows totaled at Rs 1,906.70 crores till 6th August 2012. While on a year to date basis, net capital inflows stood at th Rs 54,172.50 crores till 6 August 2012. UKs Halifax House Price Index (HPI) declined by 0.6 percent in July as compared to rise of 0.8 percent in June. British Retail Consortium (BRC) Retail Sales Monitor increased at slow pace of 0.1 percent in July from previous rise of 1.4 percent in June. Japans Leading Indicators increased at slow pace of 92.6 percent in June from previous rise of 95.2 percent a month ago.

$/Euro (Spot)

1.24

0.1

1.1

0.7

-13.2

Dollar Index

82.30

-0.2

-0.7

-1.3

10.0

NIFTY

5282.6

1.3

1.6

0.1

1.4

SENSEX

17413.0

1.3

1.6

0.1

0.6

DJIA

13117.5

0.2

0.3

3.0

14.6

S&P

1394.23

0.2

0.6

2.9

16.2

Source: Reuters

Euro appreciated 0.1 percent due to optimism that German chancellor Angela Merkel backed government backed ECBs bond buying plan to curb the Euro zone debt. However sharp rise in the currency was capped due to unfavorable economic data from the region. The currency touched a high of 1.2404 and closed at 1.2385 on Friday. European Sentix Investor Confidence declined further to 30.3mark in August with respect to previous decline of 29.6-level in July.

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Commodities Daily Report

Tuesday| August 7, 2012

International Commodities
Bullion
Gold
Spot gold prices increased 0.4 percent due to weak upbeat global market sentiments after reports that German government would back ECBs bond buying programme. Additionally, weakness in the DX also acted as a supportive factor for the gold prices. The yellow metal touched an intraday high of $1615oz and settled at $1,610.39/oz in yesterdays session. In the domestic markets gold prices gained 0.9 percent tracking firmness in the spot prices and closed at Rs.29,928/10gms after touching a high of Rs.30004/10 gms on Monday. However, appreciation in the Indian rupee capped sharp gains in the domestic markets. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMAPM Fix) Comex (Dec12) MCX (Oct12) Unit $/oz Rs/10 gms $/oz $/oz Rs /10 gms Last 1610.4 29825.0 Prev day 0.4 0.3 as on 6 August, 2012 WoW -0.6 0.0 MoM 1.5 1.0 YoY -3.3 23.4

1610.0 1612.9 29928.0

0.5 0.4 0.9

-0.5 -0.4 0.5

1.6 1.5 0.9

-2.9 -2.2 24.6

Source: Reuters

Silver
Spot silver prices gained 0.3 percent taking cues from firmness in the gold prices along with strength in the base metals pack. Additionally weakness in the DX also provided support to the white metal prices. The white metal touched an intraday high of $28/oz and settled at $27.9/oz on Monday. In the domestic markets MCX Silver prices gained 0.9 percent after touching a high of Rs.53,445/kg and closed at Rs.53,344/kg in yesterdays trade.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex (Sep12) MCX (Sep12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last 27.9 53700.0 2772.0 2785.2 53344.0 Prev day 0.3 1.7 1.7 0.2 0.1

as on 6 August, 2012 WoW -1.0 2.4 0.3 -0.6 -0.9 MoM 2.0 0.9 1.8 1.6 -0.4 YoY -27.3 -9.7 -29.4 -27.1 -6.6

Outlook
In todays trade we expect precious metals to trade sideways to up due to positive global market sentiments along with weakness in the DX. In the domestic markets appreciation in the Indian rupee might cap sharp gains. Technical Outlook
Unit valid for August 7, 2012 Support Resistance

Source: Reuters

Technical Chart Spot Gold

Spot Gold MCX Gold Oct12 Spot Silver MCX Silver Sep12

$/oz Rs/10 gms $/oz Rs/kg

1605/1599 29820/29700 27.65/27.50 53100/52800

1615/1620 30000/30080 27.95/28.10 53600/53900

Source: Telequote

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Commodities Daily Report

Tuesday| August 7, 2012

International Commodities
Energy
Crude Oil
Nymex crude oil prices gained around 1 percent yesterday taking cues from optimistic statement of German Chancellor Angela Merkels that it will back the European Central Banks (ECB) bond-buying plan. Additionally, a weaker DX along with positive global market sentiments also supported upside in the crude oil prices. Crude prices touched an intra-day high of $92.33/bbl and closed at $92.20/bbl in yesterdays trading session. On the domestic bourses, prices increased by 0.2 percent and closed at Rs.5,082/bbl after touching an intra-day high of Rs.5095/bbl on Monday. However, appreciation in the Indian Rupee capped sharp upside movement in the prices. News Tropical Storm Ernesto has strengthened in the western Caribbean Sea on Monday and it is forecasted to become a hurricane. Also, it is expected that it can enter into Mexicos Yucatan Peninsula but it is too early to say whether it will disrupt oil and gas operations as per the US forecast experts. It is the fifth largest storm of Atlantic hurricane season and travelling at a speed of 65 miles per hour (mph) which has increased from 50 mph since yesterday. API Inventories Forecast The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to decline by 1.6 million barrels for the week ending on 3rd August 2012. Outlook From the intra-day perspective, we expect crude oil prices to trade on positive note on the back of upbeat global market sentiments along with weakness in the DX. Additionally, expectations of storm Ernesto gaining its momentum coupled with forecast of decline in US crude oil inventories will support upside in the prices. Technical Outlook
Unit valid for August 7, 2012

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Aug12) ICE Brent Crude (Aug12) MCX Crude (Aug12) Unit $/bbl $/bbl Last 92.3 110.8 Prev. day 1.0 0.4 WoW 2.8 3.2

as on 6 August, 2012 MoM 7.4 10.3 YoY 6.2 2.8

$/bbl

92.2

0.9

2.7

7.2

6.1

$/bbl

109.6

0.6

3.2

9.2

0.2

Rs/bbl

5082.0

0.2

2.1

5.8

30.3

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Aug12) Unit $/mmbtu Rs/ mmbtu Last 2.932 160.2

(% change)

as on 6 August, 2012

Prev. day 1.45 -0.87

WoW -8.89 -9.85

MoM 5.09 1.59

YoY -25.75 -9.80

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

Support

Resistance

NYMEX Crude Oil

$/bbl

91.30/90.60

92.90/93.70

MCX Crude Aug12

Rs/bbl

5040/5000

5130/5170

Source: Telequote

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Commodities Daily Report

Tuesday| August 7, 2012

International Commodities
Base Metals
The base metals pack traded on a positive note yesterday on the back of rise in risk appetite in the global markets coupled with weakness in the DX. However, sharp upside in the prices was capped on account of increase in LME inventories. In the Indian markets appreciation in the Rupee restricted sharp upside in the prices. Copper Copper, the leader of the base metals pack increased by 0.7 percent yesterday taking cues from upbeat global market sentiments. Additionally, a weaker DX also acted as a positive factor for the copper prices. However, sharp upside in the prices was capped on account of rise in LME copper inventories by 0.5 percent which stood at 245,950 tonnes. The red metal touched an intra-day high of $7494/tonne and closed at $7,480/tonne in yesterdays trading session. In the Indian markets prices gained by 0.2 percent and closed at Rs.414.50/kg after touching an intra-day high of Rs.414.80/kg on Monday. However, appreciation in the Indian Rupee prevented further gains in prices on the MCX. Outlook We expect base metals pack to trade higher on the back of positive market sentiments along with weakness in the DX which will support an upside in the prices. Additionally, expectations of bound buying by the ECB will also act as a positive factor for the prices. Appreciation in the Indian Rupee will cap sharp gains in prices on the MCX. Technical Outlook
Unit valid for August 7, 2012 Support Resistance

Market Highlights - Base Metals (% change)

Unit LME Copper (3 month) MCX Copper (Aug12) LME Aluminum (3 month) MCX Aluminum (Aug12) LME Nickel (3 month) MCX Nickel (Aug12) LME Lead (3 month) MCX Lead (Aug12) LME Zinc (3 month) MCX Zinc (Aug12) Rs /kg 102.4 $/tonne 1848.5 Rs /kg 104.8 $/tonne 1891.0 Rs /kg 876.5 $/tonne 15720.0 Rs /kg 103.2 $/tonne 1877.3 Rs/kg 414.5 $/tonne Last 7480.0

as on 6 August, 2012 WoW -0.8 MoM -1.2 YoY -17.9

Prev. day 0.7

0.2

-1.3

-2.6

1.2

1.0

-1.1

-2.5

-22.8

0.2

0.0

-3.1

-5.2

0.8

-2.7

-4.0

-30.7

0.3

-1.9

-4.4

-14.1

0.1

-2.7

0.5

-20.7

-0.5

-2.3

-0.1

-2.5

0.5

-0.5

-0.4

-16.9

0.0

-0.1

-1.3

3.1

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 6 August 245,950 4,880,425 115,992 989,875 326,550
th

3 August 244,725 4,864,450 115,314 992,300 327,100

rd

Actual Change 1,225 15,975 678 -2,425 -550

(%) Change 0.5 0.3 0.6 -0.2 -0.2

Source: Reuters

Technical Chart LME Copper

MCX Copper Aug12

Rs /kg

411/409

416/418

MCX Zinc Aug12

Rs /kg

101.80/101.0

102.80/103.40

MCX Lead Aug12

Rs /kg

104.20/103.50

105.40/106.0

MCX Aluminum Aug12

Rs /kg

102.70/102.0

103.80/104.30

MCX Nickel Aug12

Rs /kg

868/863

882/889

Source: Telequote

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Commodities Daily Report

Tuesday| August 7, 2012

International Commodities
Important Events for Today

Indicator BRC Retail Sales Monitor y/y Italian Industrial Production m/m Manufacturing Production m/m Italian Prelim GDP q/q German Factory Orders m/m NIESR GDP Estimate

Country UK Euro UK Euro Euro UK

Time (IST) 4:31am 1:30pm 2:00pm 2:30pm 3:30pm 7:30pm

Actual 0.1% -

Forecast -1.0% -3.9% -0.7% -0.8% -

Previous 1.4% 0.8% 1.2% -0.8% 0.6% -0.2%

Impact Medium Medium High Medium Medium Medium

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