Commodities Daily Report

Thursday| June 20, 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

Thursday| June 20, 2013

International Commodities
Overview
US Federal Reserve may reduce its stimulus measures later this year. US Federal Funds Rate kept at 0.25 percent in the current month. Chinas HSBC Flash Manufacturing PMI declined to 48.3-mark in June. Asian markets are trading lower today on the back of statement from Federal Reserve Chairman Ben Bernanke that central bank may taper its bond buying program later this year depending on the growth in the US economy. US Federal Funds Rate kept unchanged at 0.25 percent in the current month. Chinas HSBC Flash Manufacturing Purchasing Managers' Index (PMI) declined by 0.9 points to 48.3-mark in June as against a rise of 49.2-level in May. The US Dollar Index (DX) gained sharply 1 percent in yesterdays trading session on the back of rise in risk aversion in global markets which led to increase in demand for low yielding currency. Additionally, statement from Federal Reserve Chairman Ben Bernanke that central bank will reduce its bond buying program by end of this year as US economy is growing at a stronger pace exerted downside pressure on the currency. The DX touched an intra-day high of 81.67 and closed at 81.60 on Wednesday. The Indian Rupee appreciated 0.2 percent in yesterdays trading session. The currency appreciated on account of auction of $7.15 billion of government debt quotas for foreigners. Further, upbeat domestic markets in the later part of the trade supported an upside in the currency. However, sharp upside in currency was capped as a result of concerns that US Federal Reserve will taper its bond buying program. The currency touched an intra-day high of 58.605 and closed at 58.71 against dollar on Wednesday. For the month of June 2013, FII outflows totaled at Rs.2,433.70 crores ($412.24 million) as on 19th June 2013. Year to date basis, net capital inflows stood at Rs.80,771.40 crores ($14,940.70 million) till 19th June 2013.

Market Highlights (% change)

Last INR/$ (Spot) 58.705 Prev day 0.2

as on 19 June, 2013 w-o-w -1.5 m-o-m -6.7 y-o-y -4.4

$/Euro (Spot)

1.3294

-0.7

-0.3

3.2

4.6

Dollar Index NIFTY

81.60

1.0

0.8

-3.4

2.7

5822.3

0.1

1.1

-5.4

15.0

SENSEX

19245.7

0.1

1.1

-4.8

5.2

DJIA

15112.2

-1.3

0.8

-1.3

17.7

S&P

1628.9

-1.4

1.0

-2.3

20.0

Source: Reuters

The Euro depreciated 0.7 percent in the yesterdays trading session on the back of weak global markets. Further, strength in the DX after the Feds statement exerted downside pressure on the currency. The Euro touched an intra-day low of 1.326 and closed at 1.3294 against the dollar on Wednesday.

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Commodities Daily Report

Thursday| June 20, 2013

International Commodities
Bullion Gold
Spot gold prices declined 1.3 percent in yesterdays trading session on the back of rise in risk aversion in the global markets. Further, strength in the DX exerted downside pressure on the prices. The yellow metal touched an intra-day low of $1348.74/oz and closed at $1350.70/oz in yesterdays trading session. SPDR gold holding slipped below 1000 tonnes yesterday and this eroded more than $29 billion from the funds. Over the year, holdings have slipped by 26 percent to 999.56 tonnes marking lowest since February 2009. In the Indian markets, prices ended on a positive note, increasing 0.2 percent. The commodity closed at Rs.28011/10 gms after touching an intra-day high of Rs. 28066/10 gms on Wednesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1350.7 Prev. day -1.3 as on 19 June, 2013 WoW -2.7 MoM -3.1 YoY -15.9

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (August13) MCX Gold (August13)

Rs/10 gms $/oz

27900.0

-0.4

1.0

9.2

-7.6

1372.8

0.4

-0.7

1.3

-14.3

$/oz

1373.6

0.5

-0.3

-1.3

-15.3

Rs /10 gms

28011.0

0.2

0.2

7.4

-7.5

Source: Reuters

Silver
Taking cues from fall in gold prices along with mixed performance in the base metals group, Spot silver prices fell 1.5 percent yesterday. Further, strength in the DX added downside pressure on the prices. The white metal touched an intra-day low of $21.23/oz and closed at $21.30/oz in yesterdays trade. On the domestic front, prices fell 0.2 percent and closed at Rs.43,954/kg after touching an intra-day low of Rs.43,675/kg on Wednesday.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (July13) MCX Silver (July13) Unit $/oz Rs/1 kg Last 21.3 45000.0 Prev day -1.5 -0.5

as on 19 June, 2013 WoW -2.5 1.1 MoM -7.0 4.7 YoY -24.1 -18.3

$/oz $/ oz

2162.0 21.6

-0.8 0.0

-0.7 0.2

-0.2 -3.9

-23.6 -23.8

Rs / kg

43954.0

-0.2

0.9

1.6

-19.5

Outlook
In todays trade, we expect precious metals to trade lower on the back of weak global markets. Further, sharp upside in the DX coupled with fall in the SPDR holdings below the 1000 tonnes will exert downside pressure on the prices. Additionally, statement from Fed to reduce its bond buying program by end of this year as US economy is growing at a stronger pace will act as a negative factor. Depreciation in the Rupee will prevent sharp fall in prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Aug13 Spot Silver MCX Silver July13 $/oz Rs/10 gms $/oz Rs/kg valid for June 20, 2013 Support 1339/1332 27850/27700 21.0/20.80 43400/43000 Resistance 1351/1356

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

28100/28200 21.45/21.60 44300/44700

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Commodities Daily Report

Thursday| June 20, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 0.2 percent yesterday, taking cues from unexpected rise in US crude oil inventories. Further, statement from Fed regarding reducing its bond buying program around end of this year exerted downside pressure on the prices. Strength in the DX acted as a negative factor for prices. Crude oil prices touched an intra-day low of $97.57/bbl and closed at $98.20/bbl in yesterdays trading session. However, sharp downside in prices was cushioned as a result of supply concerns from Syria. On the domestic bourses, prices traded on a flat note and the commodity closed at Rs.5,780/bbl after touching an intra-day low of Rs.5,758/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories increased unexpectedly by 0.3 million barrels to 394.10 million barrels for the week ending on 14th June 2013. Gasoline stocks rose by 0.2 million barrels to 221.70 million barrels and whereas distillate stockpiles fell by 0.5 million barrels to 121.60 million barrels for the last week. 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 104.1 98.2 Prev. day -0.2 -0.2 WoW 0.7 2.5 as on 19 June, 2013 MoM -0.9 4.2 YoY 11.0 16.9

$/bbl

106.1

0.1

2.5

1.3

14.5

Rs/bbl

5780.0

0.0

4.0

8.5

24.4
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (June 13) Unit $/mmbtu Rs/ mmbtu Last 3.947 233.6

(% change)

as on 19 June, 2013

Prev. day 0.9 2.2

WoW 4.45 6.91

MoM -2.74 3.36

YoY 53.88 64.16

Source: Reuters

Technical Chart NYMEX Crude Oil

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 increase by 89 billion cubic feet (bcf) for the week ending on 14th June 2013. Outlook From the intra-day perspective, we expect crude oil prices to trade lower on the back of rise in US crude oil inventories. Additionally, weak global markets coupled with sharp upside in the DX will exert downside pressure on the prices. Further, statement from Fed regarding curtailing its bond buying program by end of this year will act as a negative factor. In the Indian markets, depreciation in the Rupee will cushion sharp downside in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude June13 $/bbl Rs/bbl valid for June 20, 2013 Support 96.70/96.0 5760/5720 Resistance 98.20/99.0 5850/5900

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Thursday| June 20, 2013

International Commodities
Base Metals
The base metals pack traded on mixed note in the yesterdays trading session on the back of weak global markets coupled with strength in the DX. Additionally, statement from Federal Reserve Chairman to reduce its stimulus spending by end of the year exerted downside pressure. Further, rise in LME inventories apart from Zinc acted as a negative factor. In the Indian markets, appreciation in the Rupee added downside pressure in prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (June13) LME Aluminum (3 month) MCX Aluminum (June13) LME Nickel (3 month) MCX Nickel (June13) LME Lead (3 month) $/tonne 2070.3 -1.7 -2.4 1.4 10.3 Rs /kg 834.3 0.3 0.9 0.8 -13.1 $/tonne 14235.0 0.7 -0.2 -5.5 -16.7 Rs /kg 105.6 -0.8 -0.9 4.1 -0.1 $/tonne 1834.3 -0.4 -2.0 -1.5 -3.6 Rs/kg 408.3 -0.4 -0.8 -0.2 -3.1 $/tonne Last 6976.0 Prev. day -0.2 as on 19 June, 2013 WoW -2.2 MoM -11.1 YoY -7.0

Copper
Copper prices fell 0.2 percent in yesterdays trade on the back of statement by Fed to curtail its stimulus measures added downside pressure on prices. Further, rise in LME copper inventories by 1 percent which stood at 638,325 tonnes acted as a negative factor. Additionally, weak global markets and strength in the DX added downside pressure on prices. The red metal touched an intra-day low of $6925/tonne and closed at $6986/tonne in yesterdays trading session. On the domestic front, prices fell around 0.4 percent as a result of appreciation in the Rupee and closed at Rs. 408.30/kg, after touching an intra-day low of Rs 405.90/kg on Wednesday. Outlook

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

Rs /kg

121.2

-1.9

-1.0

8.1

14.7

$/tonne

1862.8

0.3

-0.4

0.4

-0.3

Rs /kg

107.5

-0.3

0.6

6.3

2.3

Source: Reuters

LME Inventories
Unit Copper tonnes tonnes tonnes tonnes tonnes 19 June 638,325 5,414,250 185,688 1,078,025 204,625
th

18 June 632,150 5,348,150 185,748 1,081,575 189,050

th

Actual Change 6,175 66,100 -60 -3,550 15,575

(%) Change 1.0 1.2 0.0 -0.3 8.2

Source: Reuters

In todays session, we expect base metal prices to trade with a negative note on the back of statement from Fed regarding reduction in its bond buying program, weak global markets coupled with sharp rise in the DX. Further, unfavourable manufacturing data from China will exert more downside pressure on the prices. In the Indian markets, depreciation in the Rupee will prevent sharp fall in prices on the MCX. 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 20, 2013 Support 405/403 106.80/105.80 120.20/119.20 104.80/104.0 827/820 Resistance 410/412 108.20/109.0 122.0/122.80 106.20/107.0 840/848

Aluminum Nickel Zinc Lead

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Thursday| June 20, 2013

International Commodities
Important Events for Today
Indicator FOMC Press Conference BOE Gov King Speaks HSBC Flash Manufacturing PMI German PPI m/m French Flash Manufacturing PMI French Flash Services PMI German Flash Manufacturing PMI German Flash Services PMI Flash Manufacturing PMI Flash Services PMI Retail Sales m/m Spanish 10-y Bond Auction Eurogroup Meetings CBI Industrial Order Expectations Unemployment Claims Flash Manufacturing PMI MPC Member Fisher Speaks Existing Home Sales Philly Fed Manufacturing Index Country US UK China Euro Euro Euro Euro Euro Euro Euro UK Euro Euro UK US US UK US US Time (IST) 12:00am 1:30am 7:15am 11:30am 12:30pm 12:30pm 1:00pm 1:00pm 1:30pm 1:30pm 2:00pm Tentative All Day 3:30pm 6:00pm 6:30pm 6:45pm 7:30pm 7:30pm Actual 48.3 Forecast 49.4 0.0% 47.1 45.0 49.9 50.1 48.6 47.7 0.8% -15 343K 52.5 5.01M -0.6 Previous 49.2 -0.2% 46.4 44.3 49.4 49.7 48.3 47.2 -1.3% 4.52/2.5 -20 334K 52.3 4.97M -5.2 Impact High High High Medium High Medium High Medium Medium Medium High High High Medium High Medium Medium High High

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