Commodities Daily Report

Friday| May 31, 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

Friday| May 31, 2013

International Commodities
Overview
US Prelim GDP declined to 2.4 percent in first quarter of 2013. UKs Nationwide HPI gained by 0.4 percent in the current month. th US Unemployment Claims increased to 354,000 for w/e 24 May. Asian markets are trading on a positive note today on the back of more than expected rise in Japans industrial production coupled with favorable manufacturing data. However, sharp upside was capped as a result slow growth in US GDP. US Prelim Gross Domestic Product (GDP) declined to 2.4 percent in first quarter of 2013 as against a rise of 2.5 percent in fourth quarter of 2012. Unemployment Claims increased by 10,000 to 354,000 for week ending th 24 May from earlier rise of 344,000 in prior week. Prelim GDP Price Index fell to 1.1 percent in Q1 of 2013 as compared to rise of 1.2 percent in Q4 of 2012. Pending Home Sales dropped to 0.3 percent in April with respect to rise of 1.5 percent a month ago. The US Dollar Index (DX) declined by 0.8 percent in the yesterdays trading session on the back of rise in risk appetite in the global market sentiments which led to fall in demand for the low yielding currency. Further, US equities traded on a positive note which also exerted downside pressure on the currency. However, sharp downside in the currency was cushioned as a result of US GDP growing at a slower pace. The currency touched an intra-day low of 83.01 and closed at 83.07 on Thursday. The Indian Rupee depreciated by 0.2 percent in the yesterdays trading session. The currency depreciated on account of statement from countrys central bank chief Subbarao that inflation is still on higher side coupled with worries over current account deficit. Additionally, heavy dollar buying from defense related companies and month end needs of oil importers exerted downside pressure on the currency. However, sharp downside was cushioned as a result of upbeat domestic market sentiments. Further, weakness in the DX also prevented sharp fall in the Indian Rupee. The currency touched an intra-day low of 56.465 and closed at 56.38 against dollar on Thursday. For the month of May 2013, FII inflows totaled at Rs.20,671.60 crores th ($3,775.79 million) as on 30 May 2013. Year to date basis, net capital th inflows stood at Rs.81,708.10 crores ($15,086.10 million) till 30 May 2013.

Market Highlights (% change)

Last INR/$ (Spot) 56.38 Prev day -0.2

as on 30 May, 2013 w-o-w -1.2 m-o-m -4.8 y-o-y -0.4

$/Euro (Spot)

1.3048

0.9

0.9

-0.1

5.5

Dollar Index NIFTY

83.07

-0.8

-0.9

1.0

4.5

6124.1

0.3

2.6

2.1

22.7

SENSEX

20215.4

0.3

2.8

2.4

10.5

DJIA

15324.5

0.1

0.1

3.3

23.4

S&P

1654.4

0.4

0.2

3.6

26.0

Source: Reuters

The Euro appreciated by 0.9 percent in the yesterdays trading session on the back of weakness in DX. Further, rise in risk appetite in the global market sentiments supported Euro to trade in green. Additionally, weak economic data from the US dampened the expectations among the investors that the US Federal Reserve may start trimming bond buying programme soon. Japans Manufacturing Purchasing Managers' Index (PMI) increased by 0.4 points to 51.5-mark in May as against a rise of 51.1-level in April. Household Spending grew at slower pace of 1.5 percent in April from earlier rise of 5.2 percent in March. Prelim Industrial Production grew more than expected by 1.7 percent in April when compared to increase of 0.2 percent in March.

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Commodities Daily Report

Friday| May 31, 2013

Bullion Gold

International Commodities

Spot gold prices increased by 1.5 percent in the yesterdays trading session on the back of weakness in Dollar index. Further, weaker economic data from US dampened the expectation among the investors that the US Federal Reserve may start trimming bond buying programme soon supported prices to trade in green. The yellow metal touched an intra-day high of $1417.81/oz and closed at $1413.3/oz in yesterdays trading session. In the Indian markets, prices ended on positive note in the yesterday trading session taking cues from spot gold prices and closed at Rs.27158/10 gms after touching an intra-day high of Rs. 27198/10 gms on Thursday. Depreciation in the Indian rupee supported prices to trade in green.

Market Highlights - Gold (% change)

Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June13) MCX Gold (June13) Unit $/oz Rs/10 gms $/oz Last 1413.3 26850.0 Prev. day 1.5 1.3

as on 30 May, 2013 WoW 1.6 1.5 MoM -3.6 0.0 YoY -9.5 -7.3

1413.5

2.2

2.4

-3.8

-8.2

$/oz

1411.5

1.5

1.4

-3.6

-9.7

Rs /10 gms

27158.0

2.0

2.7

0.9

-6.7

Silver
Taking cues from rise in spot gold prices along with upside in base metal packs, Spot silver prices increased by 1.2 percent in the yesterdays trading session. Further, weakness in DX coupled with rise in risk appetite in the global market sentiments supported prices to trade positive. However, a sharp rally in the prices was capped on the back of weaker economic data from US. The white metal prices touched an intra-day high of $23.09 /oz and closed at $22.7/oz in yesterdays trade. On the domestic front, prices increased by 1.6 percent taking cues from spot silver prices and closed at Rs. 44421/kg after touching an intra-day high of Rs. 44925/kg on Thursday. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 22.7 45500.0 Prev day 1.2 1.9

Source: Reuters

as on 30 May, 2013 WoW 0.8 0.0 MoM -4.5 -0.1 YoY -18.4 -15.9

$/oz $/ oz

2268.0 22.7

1.4 1.0

0.9 1.0

-4.3 -4.7

-18.1 -18.9

Rs / kg

44421.0

1.6

2.0

-0.3

-18.5

Source: Reuters

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of weakness in DX. Further, weaker economic data from US boosted expectations among the investors that the US Federal Reserve may continue with its bond buying programme, which may support prices to trade in green. Additionally, expectation of rise in Europes inflation data may act as a positive factor for the prices. Technical Outlook
Unit Spot Gold MCX Gold June13 Spot Silver MCX Silver July13 $/oz Rs/10 gms $/oz Rs/kg valid for May 31, 2013 Support 1412/1404 27000/26850 22.60/22.40 44000/43600 Resistance 1427/1435 27300/27450 23.05/23.25 44800/45200

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Friday| May 31, 2013

Energy

International Commodities
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 Last 93.6 102.2 93.6 Prev. day 0.5 -0.3 0.5 WoW -0.6 1.3 -0.7 as on 30 May, 2013 MoM 0.4 1.1 -0.4 YoY 6.6 -2.2 6.6

Crude Oil
Nymex crude oil prices increased around 0.5 percent yesterday taking cues from expectations that US Federal Reserve will continue with its stimulus measures after unfavorable economic data from the world s largest economy. Additionally, weakness in the DX supported an upside in the oil prices. However, sharp upside in the prices was capped on account of unexpected rise in the US crude oil inventories. Further, US GDP grew at slower pace which raised concerns over the demand for the fuel. Crude oil prices touched an intra-day high of $93.99/bbl and closed at $93.60/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.6 percent as a result of depreciation in the Indian Rupee and closed at Rs.5,298/bbl after touching an intra-day high of Rs.5320/bbl on Thursday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories increased unexpectedly by 3.0 million barrels to 397.60 million barrels th for the week ending on 24 May 2013. Gasoline stocks fell by 1.5 million barrels to 219.20 million barrels and whereas distillate stockpiles rose by 1.9 million barrels to 120.70 million barrels for the last week.

$/bbl

102.2

-0.2

-0.2

-0.6

-1.2

Rs/bbl

5298.0

0.6

1.6

5.6

6.8
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (May 13) Unit $/mmbtu Rs/ mmbtu Last 4.027 229.2 Prev. day -3.8 -2.2

as on 30 May, 2013

WoW -5.56 -3.21

MoM -7.32 -1.46

YoY 64.37 65.37

Source: Reuters

Technical Chart NYMEX Crude Oil

Natural Gas
EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory increased more than expectations by 88 billion cubic feet (bcf) which stood at 2.141 trillion cubic feet for the week ending on 24th May 2013. Outlook From the intra-day perspective, we expect crude oil prices to trade lower on the back of unexpected rise in the US crude oil inventories. Further, unfavorable economic data from US and GDP growing at slower pace will also exert downside pressure on the oil prices. Additionally, expectations of weak economic data from Euro Zone and OPEC to maintain its supply target in todays meeting will add downside pressure on the crude prices. However, sharp downside in the crude oil prices will be cushioned on account of rise in risk appetite in the global market sentiments coupled with weakness in the DX. In the Indian markets, depreciation in the Rupee will restrict sharp fall in the oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude June13 $/bbl Rs/bbl valid for May 31, 2013 Support 92.80/92.10 5250/5210 Resistance 94.40/95.30 5340/5390
Source: Telequote

Source: Telequote

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Friday| May 31, 2013

International Commodities
Base Metals
Market Highlights - Base Metals (% change) The base metals pack traded on a positive note on the back of rise in risk appetite in the global markets coupled with weakness in DX. However, weak economic data from US capped sharp rise in the prices. Further, worries over demand for industrial metal from the largest consumer, China also prevented sharp rallies in the prices. In the Indian market depreciation in the Indian rupee supported prices to trade in green on MCX, platform.
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 Rs /kg 123.0 2.8 8.2 17.4 14.0 $/tonne 2164.8 1.8 6.0 11.2 12.4 Rs /kg 832.3 0.3 0.2 4.7 -9.1 $/tonne 14790.0 -0.1 -1.0 0.3 -9.5 Rs /kg 105.7 2.5 3.8 8.6 -4.8 $/tonne 1897.3 1.7 2.4 4.2 -5.6 Rs/kg 414.6 0.8 1.5 11.4 -2.0 $/tonne Last 7303.8 Prev. day 0.2 as on 30 May, 2013 WoW 0.0 MoM -6.9 YoY -2.7

Copper
Copper, the leader of the base metal pack increased by 0.2 percent on the back of rise in risk appetite in the global market sentiments coupled with weakness in DX. Further, decline in LME inventories by 0.4 percent to 611,125 tonnes supported prices to trade in green. However, weak economic data from US capped sharp gains in the prices. The red metal touched an intra-day high of $7345/tonne and closed at $7303.75/tonne yesterdays trading session. On the domestic front, prices ended on positive note and closed at Rs. 414.6/kg on Thursday after touching an intra-day high of Rs 416.2/ kg. Outlook In the intra-day, we expect base metals prices to trade on the negative note on the back of unfavourable US pending home sales data. Further rise in US unemployment claims along with decline in US GDP data may add to downside pressure on the prices. Additionally, expectation of weaker economic data from Euro Zone may keep prices under pressure. However, weakness in DX coupled with rise in risk appetite in the global market sentiments may cushion sharp fall in the prices. Technical Outlook
Unit MCX Copper May13 MCX Zinc May 13 MCX Lead May 13 MCX Aluminum May13 MCX Nickel May 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for May 31, 2013 Support 412/409 105.5/104.5 122.2/121.5 104.8/104 827/820 Resistance 416/419 107/107.8 123.8/124.8 106.4/107.2 840/848

(April13) LME Zinc (3 month) MCX Zinc (April13)

Source: Reuters

$/tonne

1907.0

1.2

3.0

4.3

0.8

Rs /kg

106.2

1.8

4.2

8.4

-0.1

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 30th May 611,125 5,209,975 180,492 1,090,050 222,225 29th May 613,725 5,203,150 179,832 1,095,350 225,150 Actual Change -2,600 6,825 660 -5,300 -2,925 (%) Change -0.4 0.1 0.4 -0.5 -1.3
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| May 31, 2013

International Commodities
Important Events for Today
Indicator Household Spending y/y Tokyo Core CPI y/y Prelim Industrial Production m/m German Retail Sales m/m French Consumer Spending m/m OPEC Meetings Net Lending to Individuals m/m CPI Flash Estimate y/y Unemployment Rate Core PCE Price Index m/m Personal Spending m/m Chicago PMI Revised UoM Consumer Sentiment Country Japan Japan Japan Europe Europe All UK Europe Europe US US US US Time (IST) 5:00am 5:00am 5:20am 11:30am 12:15pm All Day 2:00pm 2:30pm 2:30pm 6:00pm 6:00pm 7:15pm 7:25pm Actual 1.5% 0.1% 1.7% Forecast 3.1% -0.2% 0.8% 0.3% -0.5% 0.9B 1.4% 1.2% 0.1% 0.2% 50.3 84.1 Previous 5.2% -0.3% 0.2% -0.5% 1.3% 0.9B 1.2% 12.1% 0.0% 0.2% 49.0 83.7 Impact Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium

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