Commodities Daily Report

Thursday| March 28, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn :6130 Saif Mukadam Research Analyst saif.mukadam@angelbroking.com (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report

Thursday| March 28, 2013

International Commodities
Overview
German gfk consumer climate remained unchanged in March UK current account deficit was at pound 14 billion in Q4. UK Final GDP for Q4 remained unchanged. US pending home sales declined by 0.4 percent in February Japans retail sales fell by 2.3 percent in February. Asian markets are trading lower on the back of wo rries over Europes debt crisis coupled with unfavorable pending home sales data from US in yesterdays trade. US pending home sales declined by 0.4 percent in the month of February as compared to rise of 3.8 percent in the month of January. The US Dollar Index (DX) gained by 0.4 percent yesterday on the back of rise in risk aversion in the global market sentiments which led to rise in demand for the low yielding currency. Additionally, worries over Cyprus bailout coupled with political uncertainty in Italy supported DX to gain strength. Further, negative economic data from US coupled with weak domestic markets supported DX to gain strength. The currency touched an intraday high of 83.52 and closed at 83.41 on Wednesday. The Indian Rupee depreciated by 0.3 percent on Tuesdays trading session. The currency depreciated on the back of weak global market sentiments coupled with strength in the DX. Further, expectations of Samajwadi Party (SP) may withdraw its support from the government added downside pressure. The Indian Rupee touched an intra-day low of 54.51 and closed at 54.47 against dollar on Tuesday. For the month of March 2013, FII inflows totaled at Rs 8,577.60.crores th ($1571.06million) as on 26 March 2013. Year to date basis, net capital th inflows stood at Rs 55,055.70.crores ($10205.7million) till 26 March 2013. United Kingdom (UK) current account deficit was at pound 14 billion in Q4 as compared to pound 15.1 billion in Q3. UK Final GDP for Q4 remained unchanged to -0.3 percent as compared to previous publication. Japans retail sales fell by 2.3 percent in February as compared to decline of 1.1 percent in January.

Market Highlights (% change)

Last INR/$ (Spot) 54.47 Prev day -0.3

as on 27 March, 2013 w-o-w -0.2 m-o-m -1.0 y-o-y -6.9

$/Euro (Spot)

1.278

-0.6

-1.2

-2.7

-4.0

Dollar Index NIFTY**

83.41

0.4

0.6

2.1

5.0

5641.6

0.0

-0.9

-2.7

8.6

SENSEX**

18704.5

0.0

-1.0

-2.3

2.3

DJIA

14526.2

-0.2

0.1

3.4

10.1

S&P

1562.9

-0.1

0.9

4.4

10.3

Source: Reuters (** Prices as on 26th March 2013 as markets were closed on eve of Holi festival)

The Euro depreciated by 0.6 percent in yesterdays trade on the back of the worries over Cyprus bailout coupled with political uncertainty in Italy. Further, weak global market sentiments coupled with strength in DX added downside pressure. Additionally, unfavorable Italian retail sales data acted as a negative factor. German gfk consumer climate remained unchanged in month of March as compared to 5.9-mark in February. German Import prices rose by 0.3 percent in February as compared to increase by 0.2 percent in January. Italian retail sales declined by 0.5 percent for the month of January as compared to rise of 0.4 percent in December. The Euro touched an intra-day low of 1.275 and closed at 1.278 against dollar on Wednesday.

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Commodities Daily Report

Thursday| March 28, 2013

International Commodities
Bullion Gold
Spot gold prices increased around 0.4 percent in the yesterdays trading session as the investors are worried that the Cyprus bank restructuring may be used as a model for other European nations which may endanger bondholders and depositors leading to rise in demand for safe haven. However, strength in DX capped sharp gains in prices. The yellow metal touched an intra-day high of $1608/oz and closed at $1604.8/oz in yesterdays trading session. In the Indian markets, prices ended on positive note in the yesterday trading session tracking spot gold prices and closed at Rs.29632/10 gms after touching an intra-day high of Rs. 29647/10 gms on Wednesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13) Unit $/oz Rs/10 gms $/oz Last 1604.8 Prev. day 0.4 as on 27 March, 2013 WoW -0.1 MoM 0.5 YoY -4.4 -

1603.0

0.3

-0.3

-0.1

-5.3

$/oz

1606.2

0.7

-0.5

2.2

-4.7

Rs /10 gms

29632.0

0.5

-0.2

-0.4

4.8

Source: Reuters

Silver
Taking cues from the fall in base metals pack coupled with strength in DX, Spot silver prices ended on negative note by 0.3 percent on Wednesday. Further worries over Cyprus bailout, political uncertainty along with rise in risk aversion added downside pressure. Additionally, Britains economy in Q4 contracted by 0.3 percent also exerted downside pressure. The white metal prices touched an intra-day low of $28.09 /oz and closed at $28.6/oz in yesterdays trade. On the domestic front, prices ended flat and closed at Rs. 54062/kg after touching an intra-day low of Rs. 53250/kg on Wednesday. Appreciation in the Rupee capped sharp rallies in prices.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 28.6 Prev day -0.3 -

as on 27 March, 2013 WoW -0.5 MoM -1.2 YoY -12.0 -

$/oz $/ oz

2833.0 2857.7

-1.7 -0.2

-2.0 -0.7

-2.5 0.6

-14.2 -12.3

Rs / kg

54062.0

0.0

-0.5

0.5

-5.8

Source: Reuters

Outlook
In the intraday, we expect precious metals to trade on a positive note as the investors are worried that the Cyprus bank restructuring may be used as a model for other European nations which may endanger bondholders and depositors leading to rise in demand for safe haven. Political uncertainty coupled with expectation of unfavorable US jobless claims data will support prices to trade green. However, strength in DX may cap sharp gains in prices. In the Indian markets, depreciation in the Indian rupee may support prices to trade positive. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for March 28, 2013 Support 1600/1594 29550/29450 28.55/28.35 53800/53500 Resistance 1609/1613 29720/29800 28.80/29.00 54300/54600

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Thursday| March 28, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 0.6 percent yesterday as the US government report showed that US refineries increased operating rates. However, worries over Cyprus bailout, uncertainty in Italy along with strength in DX capped sharp gains in prices. Further, rise in crude oil inventories prevented sharp rise in prices. Crude oil prices touched an intra-day high of $96.84/bbl and closed at $96.58/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.5 percent and closed at Rs.5,261/bbl after touching an intra-day high of Rs.5,268/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories increased unexpectedly by 3.3 million barrels for the week ending on nd 22 March 2013. Gasoline stocks fell by 1.5 million barrels and whereas distillate stockpiles dropped by 4.5 million barrels for the last week. Market Highlights - Natural Gas (% change)
Natural Gas (NG) Nymex NG MCX NG (April 13) Unit $/mmbtu Rs/ mmbtu Last 4.083 222.7 Prev. day 5.3 4.6 as on 27 March, 2013

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (April13) MCX Crude (April 13) Unit $/bbl $/bbl $/bbl Last 96.5 109.7 96.6 Prev. day 0.6 1.3 0.2 WoW 3.6 0.9 3.9

as on 27 March, 2013 MoM 4.0 -3.3 4.9 YoY -10.1 -13.0 -10.0

$/bbl

109.7

0.3

0.9

-1.9

-12.6

Rs/bbl

5261.0

0.5

3.3

5.1

-3.9
Source: Reuters

WoW 3.00 2.96

MoM 18.38 18.52

YoY 83.92 93.99

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 85 billion cubic feet (bcf) for the week ending on 22nd March 2013. Outlook From the intra-day perspective, we expect crude oil to trade on a negative note on the back of rise in risk aversion in the global market sentiments as a result of concerns over Cyprus bailout coupled with political uncertainty in Italy affecting the demand for the fuel. Further, strength in the DX coupled with rise in crude oil inventories will add downside pressure. However, as the US government report showed that US refineries increased operating rates will prevent sharp downfall in prices. In the Indian markets, depreciation in the Rupee will cushion sharp fall in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude April 13 $/bbl Rs/bbl valid for March 28, 2013 Support 95.90/95.00 5220/5170 Resistance 97.40/98.20 5300/5340

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Thursday| March 28, 2013

International Commodities
Base Metals
The base metals pack traded on a mixed note on the back of weak global market sentiments coupled with strength in DX. Further, worries over Cyprus bailout along with political uncertainty in the Italy added downside pressure. Additionally, negative pending home sales data from US coupled with unfavourable economic data from UK kept prices under pressure. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (Mar13) LME Nickel (3 month) MCX Nickel (Mar13) LME Lead (3 month) MCX Lead (Mar13) LME Zinc $/tonne 1917.8 0.2 -0.9 -8.0 -6.1 Rs /kg 114.8 -0.4 -2.9 -7.5 12.9 $/tonne 2133.0 -0.2 -2.3 -7.8 7.1 Rs /kg 916.6 0.4 0.1 2.3 1.0 $/tonne 16880.0 0.4 0.4 0.8 -5.2 Rs /kg 103.1 0.4 -1.0 -2.8 -6.2 $/tonne 1922.0 0.4 -1.1 -4.8 -12.4 Rs/kg 417.4 -0.1 0.1 -0.9 -4.6 $/tonne Last 7640.0 Prev. day 0.0 as on 27 March, 2013 WoW 0.3 MoM -2.6 YoY -10.4

Copper
Copper, the leader of the base metal pack ended flat in yesterdays trade on the back of rise in risk aversion in the global market sentiments coupled with strength in DX. Further, sharp rise in LME Copper inventories by 0.3 percent which stood at 567,900 tonnes kept the prices under pressure Additionally, worries over Cyprus, political uncertainty in Italy along with unfavourable economic data from UK added downside pressure. Negative pending home sales data from US also acted as negative factor. The red metal touched an intra-day low of $7576/tonne and closed at $7640/tonne yesterdays trading session. On the domestic front, prices ended on negative note and closed at Rs. 417.4/kg on Wednesday after touching an intra-day low of Rs 415.40/kg. Outlook In the intra-day, we expect base metals prices to trade on the negative note on the back of weak global market sentiments coupled with strength in DX. Further, worries among the investors that the Cyprus bank restructuring may be used as a model for other European nations which may endanger bondholders and depositors may also add downside pressure on the prices. Additionally, expectation of unfavorable economic data from US coupled with political uncertainty in Italy will keep prices under pressure. Depreciation in the Indian Rupee will cushion sharp fall in the prices on the MCX. Technical Outlook
Unit MCX Copper April13 MCX Zinc Mar 13 MCX Lead Mar 13 MCX Aluminum Mar13 MCX Nickel Mar 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for March 28, 2013 Support 415/412 101.8/100.8 114/113.2 102.4/101.5 909/900 Resistance 420/423 103.3/104 115.5/116.2 104/104.8 925/933

(3 month) MCX Zinc (Mar13)

Source: Reuters

Rs /kg

102.6

0.0

-1.3

-8.2

-0.7

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 27th March 567,900 5,230,650 164,652 1,182,700 264,475 26th March 566,325 5,239,150 162,498 1,184,700 265,975 Actual Change 1,575 -8,500 2,154 -2,000 -1,500 (%) Change 0.3 -0.2 1.3 -0.2 -0.6
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Thursday| March 28, 2013

International Commodities
Important Events for Today
Indicator Retail Sales y/y German Retail Sales m/m Nationwide HPI m/m German Unemployment Change M3 Money Supply y/y BOE Credit Conditions Survey Unemployment Claims Final GDP q/q Chicago PMI Country Japan Europe UK Europe Europe UK US US US Time (IST) 5:20am 12:30pm 12:30pm 2:25pm 2:30pm 3:00pm 6:00pm 6:00pm 7:15pm Actual Forecast 0.9% -0.5% 0.2% -2K 3.2% 340K 0.5% 56.5 Previous -1.1% 3.0% 0.2% -3K 3.5% 336K 0.1% 56.8 Impact Medium Medium Medium Medium Medium Medium High Medium Medium

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