Commodities Daily Report

Wednesday| June 5, 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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Commodities Daily Report

Wednesday| June 5, 2013

Overview

International Commodities
RBI moves forward to restrict gold imports. Asian stocks trading lower on expectations Fed will withdraw stimulus. US Trade Balance was at a deficit of $40.3 billion in April. UKs Construction PMI gained by 1.4 points to 50.8-mark in May.

Market Highlights (% change)

Last INR/$ (Spot) 56.48 Prev day 0.3

as on 4 June, 2013 w-o-w -1.6 m-o-m -4.4 y-o-y -1.5

The Reserve Bank of India (RBI) imposed restriction on imports on gold on consignment basis by banks to all nominated agencies and trading houses. The central banks earlier imposed restrictions on gold for banks on 13th May. The restriction will now include 100 percent cash margin basis wherein imports need to have documents against payment basis and not documents against acceptance. Asian markets are trading lower today on the back of expectations that US Federal Reserve will reduce its stimulus measures as the economy is showing signs of progress. US Trade Balance was at a deficit of $40.3 billion in April as against a earlier deficit of $37.1 billion a month ago. Investor's Business Daily (IBD) / TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism rose by 3.9 points to 49-mark in June from rise of 45.1-level in May. The US Dollar Index (DX) gained by 0.1 percent in yesterdays trading session on the back of rise in risk aversion in the global market sentiments in the later part of the trade which led to increase in demand for the low yielding currency. Further, expectations that US Federal Reserve will trim its bond buying program also supported an upside in the currency. The currency touched an intra-day high of 83.0 and closed at 82.80 on Tuesday. However, sharp upside in the currency was capped as a result of favorable economic data from the US. The Indian Rupee appreciated by 0.3 percent in the yesterdays trading session. The currency appreciated on account of restrictions imposed by the central bank of India on gold imports which eased the concerns over the countrys current account deficit. Additionally, upbeat domestic market sentiments in the early part of the trade supported an upside in the currency. The currency touched an intra-day high of 56.40 and closed at 56.48 against dollar on Tuesday. However, sharp upside was capped as result of strength in the DX. Further, weak global markets in the later part of the trade restricted positive movement in the Rupee. For the month of June 2013, FII outflows totaled at Rs.81.90 crores ($14.60 million) as on 4th June 2013. Year to date basis, net capital inflows stood at Rs.83,123.20 crores ($15,338.40 million) till 4th June 2013.

$/Euro (Spot)

1.3078

0.0

1.2

0.0

4.7

Dollar Index NIFTY

82.80

0.1

-1.1

0.6

4.2

5919.5

-0.3

-2.7

-0.9

22.3

SENSEX

19545.8

-0.3

-2.4

-0.6

6.9

DJIA

15177.5

-0.5

-1.5

0.8

25.4

S&P

1631.4

-0.6

-1.7

1.1

27.6

Source: Reuters

The Euro appreciated marginally by 0.01 percent in yesterdays trade on the back of favorable Spanish unemployment change data. Further, mixed global market sentiments also acted as a positive factor for the currency. The Euro touched an intra-day high of 1.3101 and closed at 1.3078 against dollar on Tuesday. However, sharp upside in the currency was capped on account of strength in the DX. Spanish Unemployment Change declined by 98,300 in May as against a earlier fall of 46,100 in April. European Producer Price Index (PPI) declined by 0.6 percent in April from previous decline of 0.2 percent a month ago.

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Commodities Daily Report

Wednesday| June 5, 2013

International Commodities
Bullion Gold
Spot gold prices declined around 0.9 percent in yesterdays trading session on the back of rise in risk aversion in the global market sentiments. Further, strength in the DX also exerted downside pressure on prices. Additionally, expectations of cut in the stimulus spending by the Fed acted as a negative factor. The yellow metal touched an intra-day low of $1389/oz and closed at $1399/oz in yesterdays trading session. In the Indian markets, prices ended on negative note by 0.6 percent and closed at Rs.27007/10 gms after touching an intra-day low of Rs. 26900/10 gms on Tuesday. Appreciation in the Indian Rupee added downside pressure on the prices. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (August13) MCX Gold (August13) Unit $/oz Rs/10 gms $/oz Last 1399.0 26860.0 Prev. day -0.9 -0.2 as on 4 June, 2013 WoW 0.3 1.6 MoM -4.8 -1.6 YoY -13.4 -9.9

1399.5

-0.2

1.7

-4.7

-12.9

$/oz

1397.1

-1.0

0.4

-5.2

-13.3

Rs /10 gms

27007.0

-0.6

2.1

-0.3

-9.0

Source: Reuters

Silver
Taking cues from fall in gold prices along with strength in the DX, Spot silver prices fell by 1.1 percent in yesterdays trading session. The white metal prices touched an intra-day low of $22.26/oz and closed at $22.50/oz in yesterdays trade. However, sharp downside in the prices was cushioned as a result of upbeat performance in the base metals group. On the domestic front, prices declined 1.5 percent on account of appreciation in the Indian Rupee and closed at Rs.43763/kg after touching an intra-day low of Rs.43500/kg on Tuesday.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (July13) MCX Silver (July13) Unit $/oz Rs/1 kg Last 22.5 44900.0 Prev day -1.1 -0.5

as on 4 June, 2013 WoW -0.8 -0.1 MoM -6.4 -3.1 YoY -20.4 -18.0

$/oz $/ oz

2251.0 22.4

0.4 0.0

0.7 -0.2

-7.2 -6.2

-17.8 -21.1

Rs / kg

43763.0

-1.5

0.4

-3.1

-18.7

Outlook
In intraday trade, we expect precious metals to trade on a rangebound note on the back of weak global markets, strength in the DX coupled with expectations that the Federal Reserve will reduce stimulus measures. In the Indian markets, depreciation in the Rupee will support an upside in prices. Technical Outlook
Unit Spot Gold MCX Gold Aug13 Spot Silver MCX Silver July13 $/oz Rs/10 gms $/oz Rs/kg valid for June 5, 2013 Support 1386/1374 26902/26712 22.20/21.96 43402/43041 Resistance 1412/1427 27335/27585 22.74/23.02 44220/44680

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Wednesday| June 5, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined marginally by around 0.1 percent yesterday, taking cues from strength in the DX. Crude oil prices touched an intra-day low of $92.38/bbl and closed at $93.30/bbl on Tuesday. Sharp downside however in oil prices, was cushioned on account of surprise fall in API crude oil inventories. On the domestic bourses, prices gained 0.2 percent and closed at Rs.5,300/bbl, after touching a days high of Rs.5335/bbl in yesterdays trading session. Appreciation in the Rupee capped sharp gains in prices on the MCX. API Inventories Data The American Petroleum Institutes (API) report last night showed that US crude oil inventories declined unexpectedly by 7.8 million barrels to 387.35 million barrels for the week ending on 31st May 2013. Gasoline inventories fell by 1.3 million barrels to 220.11 million barrels and whereas distillate inventories shoot up by 241,000 barrels to 121.73 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories are expected to fall by 0.4 million barrels for the week ending on 31st May13. Gasoline stocks are expected to gain by 0.5 million barrels whereas distillate inventories are expected to rise by 1.2 million barrels for the same period. Outlook In intra-day trade, we expect crude oil prices to trade higher on the back of surprise fall in the API crude oil inventories. Further, forecast of decline in EIA crude oil inventories will also support upside in prices. However, sharp upside will be capped on account of expectations that the Federal Reserve will cut its bond buying program. Weak global markets along with strength in the DX will also add pressure. In the Indian markets, depreciation in the Rupee will support upside in prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude June13 $/bbl Rs/bbl valid for June 5, 2013 Support 92.35/91.35 5217/5161 Resistance 94.40/95.40 5333/5390

Market Highlights - Crude Oil (% change)

Crude Oil Brent (Spot) Nymex Crude (July 13) ICE Brent Crude (July13) MCX Crude (June 13) Unit $/bbl $/bbl Last 102.3 93.3 Prev. day 0.3 -0.1 WoW -1.8 -1.8

as on 4 June, 2013 MoM -2.9 -2.4 YoY 3.0 11.1

$/bbl

103.2

1.2

0.6

-2.1

4.4

Rs/bbl

5300.0

0.2

1.6

2.0

13.7
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (June 13) Unit $/mmbtu Rs/ mmbtu Last 3.996 227.5 Prev. day 0.3 0.6

as on 4 June, 2013

WoW -5.17 -2.36

MoM -1.38 4.50

YoY 64.11 69.52

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Wednesday| June 5, 2013

Base Metals

International Commodities
Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) $/tonne Last 7430.8 Prev. day 1.1 as on 4 June, 2013 WoW 1.7 MoM -5.3 YoY 1.2

The base metals pack traded on a positive note yesterday on the back of favourable economic data from the Euro Zone. Additionally, mixed global markets and LME inventories scenario supported an upside in prices. However, sharp upside in prices was capped on account of expectations of cut in stimulus spending by Fed. In the Indian markets, appreciation in the Rupee capped sharp upside.

MCX Copper (June13) LME Aluminum (3 month) MCX Aluminum (June13) LME Nickel (3 month) MCX Nickel (June13)

Rs/kg

420.5

1.2

3.2

6.0

3.0

$/tonne

1943.0

1.1

5.0

2.8

-1.5

Copper
Copper prices gained 1.1 percent in yesterdays trade on the back of upbeat Spanish unemployment data. Further, decline in LME copper inventories by 0.5 percent which stood at 614,075 tonnes also supported an upside in prices. However, sharp upside in prices was capped on account of factors like expectations of cut in stimulus measures by Fed, weak global markets and a stronger DX. The red metal touched an intra-day high of $7456/tonne and closed at $7430/tonne on Tuesday. On the domestic front, prices gained 1.2 percent and closed at Rs. 420.5/kg, after touching an intra-day high of Rs 421.50/kg yesterday. Outlook In intra-day trading, we expect base metal prices to trade on a negative note on the back of strength in the DX coupled with expectations that the Federal Reserve may stop its bond buying program. However, sharp downside can be cushioned or reversal can be seen if data from the Euro Zone comes on a favourable note. Depreciation in the Rupee will support an upside in prices on the domestic bourses. Technical Outlook
Unit MCX Copper June13 MCX Zinc June 13 MCX Lead June 13 MCX Aluminum June13 MCX Nickel June 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for June 5, 2013 Support 419.0/416.80 109.25/108.65 126.0/125.30 108.50/107.90 856/850 Resistance 422.80/425.0 110.20/110.80 127.30/128.0 109.55/110.20 870/876

Rs /kg

109.0

1.1

7.8

8.0

0.5

$/tonne

15241.0

0.6

2.5

0.5

-5.2

Rs /kg

863.4

0.7

5.5

5.5

-2.2

LME Lead (3 month) MCX Lead (June13) LME Zinc (3 month) MCX Zinc (June13)

$/tonne

2235.5

0.9

5.6

9.2

17.5

Rs /kg

126.6

0.9

9.6

14.7

20.1

$/tonne

1953.8

0.4

4.5

3.4

3.5

Rs /kg

109.6

0.4

7.7

8.2

5.2

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 4th June 614,075 5,196,400 180,432 1,082,325 213,550 3rd June 617,225 5,198,375 180,072 1,086,350 217,000 Actual Change -3,150 -1,975 360 -4,025 -3,450 (%) Change -0.5 0.0 0.2 -0.4 -1.6
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Wednesday| June 5, 2013

International Commodities
Important Events for Today
Indicator Spanish Services PMI Italian Services PMI Services PMI Retail Sales m/m ADP Non-Farm Employment Change Revised Nonfarm Productivity q/q ISM Non-Manufacturing PMI Factory Orders m/m Crude Oil Inventories Beige Book Country Euro Euro UK Euro US US US US US US Time (IST) 12:45pm 1:15pm 2:00pm 2:30pm 5:45pm 6:00pm 7:30pm 7:30pm 8:00pm 11:30pm Actual Forecast 45.3 47.5 53.1 -0.2% 171K 0.7% 53.4 1.6% Previous 44.4 47.0 52.9 -0.1% 119K 0.7% 53.1 -4.9% 3.0M Impact Medium Medium High Medium High Medium High Medium Medium Medium

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