Commodities Daily Report

Monday| May 27, 27 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

Monday| May 27, 27 2013

International Commodities
Overview
US markets closed today on the eve of Memorial Day. US Core Durable Goods Orders increased by 1.3 percent in April. German Ifo Business Climate gained to 105.7-mark mark in current month. UKs BBA Mortgage Approvals rose by 32,200 in the last month. US Durable Goods Orders improved by 3.3 percent in month of April. LME markets shut down on account of Spring Bank Holiday.

Market Highlights (% change)

Last INR/$ (Spot) 55.81 Prev day -0.2 0.2

as on 24 May, 2013 w-o-w -1.7 m-o-m -2.6 y-o-y -0.5

US Core Durable Goods Orders increased by 1.3 percent in April as against a decline of 1.5 percent in March. Durable Goods Orders rose by 3.3 percent in last month from fall of 6.9 percent a month ago. The US Dollar Index (DX) declined by 0.7 percent in the last week on the back of favorable jobless claims, new homes sales and other economic data from the US and Euro Zone. However, sharp downside in the currency was cushioned as a result of rise in risk aversion in the global market sentiments which led to increase in demand for the low yielding currency. Further, expectations that US Federal Reserve will reduce its bond buying program coupled with weak US equities markets also prevented sharp fall in the DX. The currency touched a weekly low of 83.50 and closed at 83.76 on Friday. ted by 1.7 percent. The On a weekly basis, The Indian Rupee depreciated currency depreciated on account of expectations that US Federal Reserve may reduce its bond buying program coupled with increase in dollar demand from gold and crude oil importers. Additionally, weak domestic and global market sentiments ments also exerted downside pressure on the currency. However, sharp downside was cushioned as exporters took advantage of the sharp depreciation in the Indian Rupee and sold few dollars along with weakness in the DX. The currency touched a low of 56.01 in the last week and closed at 55.81 against dollar on Friday. For the month of May 2013, FII inflows totaled at Rs.18,517.80 crores th ($3,415.63 million) as on 24 May 2013. Year to date basis, net capital th inflows stood at Rs.79,554.20 crores ($14,726.0 mi million) till 24 May 2013. UKs British Bankers' Association (BBA) Mortgage Approvals increased by 32,200 in April as against a rise of 31,400 a month ago.

$/Euro (Spot)

1.2929

0.0

0.7

-0.7

3.1

Dollar Index NIFTY

83.76

-0.1 0.1

-0.7

1.4

5.4

5983.6

0.3

-3.3

1.9

21.6

SENSEX

19704.3

0.2

-2.9

2.2

7.7

DJIA

15303.1

0.1

-0.3

3.3

22.1

S&P

1649.6

-0.1 0.1

-1.1

4.5

24.9

Source: Reuters

The Euro appreciated by 0.7 percent in the last week on the back of favorable manufacturing and services economic data from the region. Further, weakness in the DX also supported an upside in the currency. However, sharp upside in the currency was capped as a result of rise in risk aversion in the global market sentiments. GfK German Consumer Climate increased by 0.3 points to 6.56.5 mark in May as against a rise of 6.2-level 6.2 in April. German Final Gross Domestic Product (GDP) remained unchanged at 0.1 percent in the Q1 of 2013. German Ifo Business Climate increased by 1.3 points to 105.7-mark 105.7 in May from earlier rise of 104.4-level level in April. The Euro touched a weekly high of 1.2998 and closed at 1.2929 against dollar on Friday. Friday

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Commodities Daily Report

Monday| May 27, 27 2013

Bullion Gold

International Commodities

Spot gold prices increased around 2 percent in the last week on the back of rise in risk aversion in the global market sentiments which led to increase in safe haven demand from the investors for the gold. Further, weakness in the DX also supported an upside in the prices. However, sharp upside in the prices was capped apped on account of expectations that US Federal Reserve will reduce its bond buying programme. The yellow metal touched a high of $1,414.25/oz in last week and closed at $1385.55/oz in last trading session of the week. In the Indian markets, prices ended on positive note in the prior week taking cues from spot gold prices and closed at Rs.26,406/10 gms on Friday after touching a weekly high of Rs. 26,677/10 gms gms. Depreciation in the Indian Rupee also supported an upside in the prices. Holdings in the SPDR Gold Trust, the world's largest gold gold-backed exchange-traded fund, declined by 2.1 percent to 1,0 1,016.16 tonnes as th th on 24 May 2013 from previous level of 1,038.41 tonnes as on 17 May 2013.

Market Highlights - Gold (% change)

Gold Gold (Spot) Unit $/oz Last 1385.6 Prev. day -0.4

as on 24 May, 2013 WoW 2.0 MoM -5.3 YoY -11.0

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June13) MCX Gold (June13)

Rs/10 gms $/oz

26290.0

-0.6

1.8

-2.6

-9.3

1390.3

0.7

1.6

-5.5

-11.4

$/oz

1386.8

1.4

1.6

-5.5

-12.0

Rs /10 gms

26406.0

-0.1

2.0

-2.4

-8.6

Source: Reuters

Silver
Taking cues from rise in spot gold prices along with the weakness in DX, Spot silver prices increased by 0.7 percent in the last week week. Further, favourable economic data from US and Euro Zone also acted as a positive factor for the prices. However, sharp upside in the prices was prevented as a result of mixed performance in the base metals group. The white metal prices touched a high of $23.30/oz in the last week and closed at $22.38/oz in last trade of the week. On the domestic front, prices increased by 1.5 percent taking cues from depreciation ciation in the Indian Rupee and closed at Rs. 43,473/kg on Friday after touching a high of Rs.44,600/kg in the prior week week. Holdings in the iShares Silver Trust, the world's largest silver silver-backed exchange-traded fund, declined by 2.24 percent to 10, 10,022.95 tonnes th th as on 24 May 2013 from previous level of 10,252.69 tonnes as on 17 May 2013.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 22.4 44720.0 Prev day -0.8 -1.7

as on 24 May, 2013 WoW 0.7 1.6 MoM -6.7 -3.6 YoY -20.8 -

$/oz $/ oz

2238.0 22.5

-0.4 -0.1

-0.6 0.6

-6.8 -6.8

-20.3 -20.1

Rs / kg

43473.0

-0.2

1.5

-3.0

-20.0

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of rise in risk aversion in the global market sentiments which will lead to increase in safe haven demand from the investors. However, SPDR gold holding shares is at the lowest level in last four years will cap sharp gains. Further, strength in DX coupled with less volatility in the markets as US and UK markets closed today will prevent upside in the prices. In the Indian markets, depreciation in the Indian Rupee may support prices to trade in green. Technical Outlook
Spot Gold MCX Gold June13 Spot Silver MCX Silver May13 Unit $/oz Rs/10 gms $/oz Rs/kg valid for May 27, 2013 Support 1387/1381 26320/26200 22.40/22.25 43200/42900 Resistance 1398/1402 26520/26600 22.60/22.90 43700/44100

Source: Telequote

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Commodities Daily Report

Monday| May 27, 27 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by 2 percent in the last week taking cues from expectations that US Federal Reserve will reduce its bond buying program. Additionally, less than expected decline in US crude oil inventories acted as a negative factor for the crude prices. Further, unfavorable manufacturing data from China and US also exerted downside pressure on the crude oil prices. However, sharp downside in the prices was cushioned as a result of fall in the jobless claims and rise in core durable goods orders from US coupled with positive economic data from the Euro Zone. Weakness in the DX also prevented fall in the oil prices. Crude oil prices touched a low of $92.21/bbl in the last week and closed at $94.15/bbl in the last trading session of the week. On the domestic bourses, prices fell by 0.5 percent and closed at Rs.5,268/bbl on Friday after touching a low of Rs.5167/bbl in the last week. Depreciation in the Indian Rupee restricted further fall in the prices on the MCX. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (May13) MCX Crude (May 13) Unit $/bbl $/bbl $/bbl 101.6 94.2 Last Prev. day 0.8 -0.1 WoW -2.6 -1.1 as on 24 May, 2013 MoM -1.8 1.2 -5.8 4.7 YoY

$/bbl

102.6

0.2

-1.9

-0.5

-3.7

Rs/bbl

5268.0

1.0

-0.5

3.8

3.5

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (May 13)

as on 24 May, 2013

Unit $/mmbtu Rs/ mmbtu

Last 4.223 236.4

Prev. day -1.0 -0.2

WoW 4.07 4.60

MoM 1.32 4.00

YoY 59.48 58.98

Source: Reuters

Natural Gas
On a weekly basis, Nymex natural gas prices increased around 4.07 percent on the back of less than expected rise in US natural gas inventories. Further, weakness in the DX also supported an upside in the gas prices. However, sharp upside in the prices was capped as a result of forecast for warm conditions which will lead to decline in demand for the fuel. Gas prices touched a weekly high of $4.295/mmbtu and closed at $4.223/mmbtu in the last trade of the prior week. On the domestic front, prices gained by 4.6 percent as a result of depreciation in the Indian Rupee and closed at Rs.236.40/mmbtu on Friday after touching a high of Rs.239.0/mmbtu in the previous week. Outlook From the intra-day day perspective, we expect crude oil prices to trade lower on the back of expectations that demand from China which is the worlds second largest crude oil importer will decline. Additionally, weak global market sentiments will exert downside pressure on the oil prices prices. Further, strength in the DX will also act as a negative ative factor for the crude oil prices. However, sharp downside in the prices will be cushioned as a result of less volatility in the markets on account of closure of US and UK markets today. In the Indian markets, depreciation in the Rupee will restrict fall in the oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude May13 $/bbl Rs/bbl valid for May 27, 2013 Support 92.70/92.0 5230/5190 Resistance 93.80/94.50 5290/5330

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Monday| May 27, 27 2013

Base Metals

International Commodities
Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (April13) LME Nickel (3 month) MCX Nickel (April13) LME Lead (3 month) MCX Lead (April13) LME Zinc (3 month) MCX Zinc (April13)
Source: Reuters

The base metals pack traded on a mixed note in the last week on the back of rise in risk aversion in the global market sentiments. Further, decline in HSBC manufacturing PMI from China increased the worries over demand for industrial metal which kept prices s under pressure. Additionally, US Federal Reserve Chairman Bernanke hinted at reducing a bond buying programme exerted downside pressure. However, favourable economic data from US and Euro Zone prevented sharp fall in the prices. Weakness in the DX also cushioned fall in the prices. In the Indian market depreciation in the Indian rupee prevented sharp decline in the prices.

as on 24 May, 2013 WoW -0.4 MoM -7.2 YoY -3.7

Last 7283.3

Prev. day -0.3

$/tonne

Rs/kg

407.9

-0.1

0.5

6.7

-3.8

$/tonne

1839.0

-0.7

-0.9

-1.9

-8.5

Rs /kg

101.2

-0.6

-0.2

0.7

-8.4

Copper
Copper, the leader of the base metal pack decreased by 0.4 percent in the last week on the back of weak global market sent sentiments coupled with unfavourable economic data from China. Additionally, US Federal Reserve Chairman Bernanke hinted at reducing a bond buying programme exerted downside pressure. However, weakness in DX along with decline in LME and Shanghai copper inventories ntories cushioned sharp fall in the prices. Further, favourable economic data from US and Euro Zone prevented downside in the prices. The red metal touched a weekly low of $7,215/tonne in the last week and closed at $7,283.25/tonne in the last trading session of the week. On the domestic front, prices gained by 0.5 percent on account of depreciation in the Indian Rupee and closed at Rs.407.85/kg on Friday after touching a high of Rs 420.5/ kg in the prior week. Copper Inventories LME copper inventories declined by 1.4 percent in n the last week and stood at 621,175 tonnes as on 24th th May, 2013 as against 629,950 tonnes as on 17th May, 2013. Copper inventories in the warehouse monitored by the Shanghai fell by 7.2 percent and stood at 176,624 tonnes for the week ending on 24th May, 2013. Outlook In the intra-day, day, we expect base metals prices to trade on the lower note on the back of rise in risk aversion in the global market sentiments coupled with strength in the DX. However, sharp downside will be cushioned as a result of less volatility in the markets on account of closure of US and UK markets. . In the Indian markets, depreciation in the Indian rupee may support prices to trade in green. valid for May 27, 201 2013 Technical Outlook
MCX Copper April13 MCX Zinc April 13 MCX Lead April 13 MCX Aluminum April13 MCX Nickel April 13 Unit Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg Support 404/401 101.30/100.50 114.80/114.0 100.50/99.80 817/811 Resistance 410/412 102.80/103.50 116.20/117.0 102.0/102.60 830/837

$/tonne

14814.0

-0.8

-0.1

-2.5

-12.6

Rs /kg

822.5

-1.0

0.7

-0.2

-13.0

$/tonne

2074.0

1.6

3.0

2.1

6.4

Rs /kg

115.5

1.6

4.0

5.4

6.7

$/tonne

1853.5

0.1

0.6

-1.7

-1.3

Rs /kg

102.0

0.1

1.4

1.1

-2.5

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 24th May 621,175 5,213,275 179,616 1,099,850 232,550 23rd May 623,875 5,221,525 180,024 1,103,225 234,525 Actual Change -2,700 -8,250 -408 -3,375 -1,975 (%) Change -0.4 -0.2 -0.2 -0.3 -0.8
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Monday| May 27, 27 2013

International Commodities
Important Events for Today
Indicator Monetary Policy Meeting Minutes Bank Holiday Bank Holiday Country Japan UK US Time (IST) 5:20am All Day All Day Actual Forecast Previous Impact Medium -

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