Commodities Daily Report

Friday| July 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

Friday| July 5, 2013

International Commodities
Overview
US markets were shut yesterday on eve of Independence Day Holiday. European Final GDP contracted by 0.3 percent in Q1 of 2013. UKs Halifax House Price Index (HPI) increased 0.6 percent in June. European Minimum Bid Rate was at 0.5 percent in the month of July. UK Official Bank Rate unchanged at 0.5 percent in the current month. Asian markets are trading higher today on the back of statement from European Central Bank (ECB) officials that borrowing costs will be kept lower for a longer span of time. Further, investors are awaiting the US jobs data to be released in the evening session today which is expected to come on a positive note. The US Dollar Index (DX) gained marginally in the yesterdays trade on the back of expectations that favorable jobs data from the US on Friday will lead to expectations that Fed will pullback its stimulus measures. Further, less volatility was observed in yesterdays trading session on account of closure of US markets on eve of Independence Day holiday. The DX touched an intra-day high of 84.16 and closed at 83.45 on Thursday. The Indian Rupee appreciated around 0.3 in yesterdays trading session. The currency appreciated on account of expectations of favorable jobs data from US on Friday coupled with weakness in the DX in the early part of the trade. Further, upbeat domestic market sentiments acted as a positive factor for the currency. However, during the day the currency came under pressure and depreciated on the back of comments from Reserve Bank of India (RBI) chief Subbarao that central bank will not defend any particular exchange rate. Additionally, outflow of foreign funds from equities and debt also capped sharp gains in the Rupee. The currency touched an intra-day high of 59.90 and closed at 60.06 on Thursday. For the month of June 2013, FII inflows totaled at Rs.619.40 crores th ($106.28 million) as on 4 July 2013. Year to date basis, net capital inflows stood at Rs.72,797.60 crores ($13,607.10 million) till 4th July 2013. UKs Halifax House Price Index (HPI) increased 0.6 percent in June as against a rise of 0.4 percent a month ago. Asset Purchase Facility unchanged at 375 billion Pounds in July. Official Bank Rate also remained unchanged at 0.5 percent in the current month.

Market Highlights (% change)

Last INR/$ (Spot) 60.06 Prev day 0.3

as on 4 July, 2013 w-o-w 0.2 m-o-m -6.3 y-o-y -8.5

$/Euro (Spot)

1.2913

-0.7

-0.9

-1.3

4.2

Dollar Index NIFTY

83.45

0.0

0.4

2.3

5.0

5837.0

1.1

2.7

-1.4

10.4

SENSEX

19410.8

1.2

2.8

-0.7

6.1

DJIA**

14988.6

0.4

0.5

-0.3

15.8

S&P**

1615.1

0.1

0.1

-1.0

17.5

Source: Reuters

(**Prices as on 4 July 2013 as markets closed on the eve of Independence Day holiday)

th

The Euro depreciated around 0.7 percent in the yesterdays trade on the back of statement from the European Central Bank (ECB) that it will continue with lower borrowing costs for a longer period which pushed the bond yields at the higher levels. Further, strength in the DX coupled with contraction in the GDP data of the region exerted downside pressure on the currency. The Euro touched an intra-day low of 1.2882 and closed at 1.2913 against the dollar on Thursday. European Final Gross Domestic Product (GDP) fell by 0.3 percent in Q1 of 2013 from earlier fall of 0.2 percent in Q4 of 2012. Minimum Bid Rate was at 0.5 percent in the month of July.

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Commodities Daily Report

Friday| July 5, 2013

International Commodities
Bullion Gold
Spot gold prices declined around 0.2 percent in yesterdays trading session on the back of strength in the DX. Further, SPDR gold holdings at the lowest level since February 2009 also exerted downside pressure on prices. The yellow metal touched an intra-day low of $1244.29/oz and closed at $1249.20/oz in yesterdays trade. In the Indian markets, prices ended on a negative note, declining 0.6 percent on account of appreciation in the Indian Rupee. The commodity closed at Rs.26143/10 gms after touching an intra-day low of Rs.26109/10 gms on Thursday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1249.2 Prev. day -0.2 as on 4 July, 2013 WoW 4.1 MoM -10.7 YoY -22.1

Gold (Spot Mumbai) Gold (LBMAPM Fix) Comex Gold (August13)** MCX Gold (August13)

Rs/10 gms $/oz

26175.0

12.5

0.9

-2.6

-11.7

1251.8

0.1

1.5

-10.6

-22.0

$/oz

1252.1

0.7

1.8

-11.6

-21.6

Silver
Taking cues from fall in gold prices along with downside in the base metals complex, Spot silver prices fell around 1 percent in yesterdays trading session. Further, strength in the DX coupled with contraction in the Euro Zone GDP exerted downside pressure on the currency. The white metal touched an intra-day low of $19.37/oz and closed at $19.50/oz in yesterdays trading session. On the domestic front, prices dropped 1.2 percent on the back of appreciation in the Rupee and closed at Rs.40,484/kg after touching an intra-day low of Rs.40,400/kg on Thursday.

Rs /10 gms

26143.0

-0.6

3.0

-3.2

-12.1

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Sept13)** MCX Silver (Sept13) Unit $/oz Rs/1 kg $/oz $/ oz Last 19.5 42000.0 1957.0 19.7 Prev day -0.9 -0.4 0.1 2.0

as on 4 July, 2013 WoW 5.7 4.0 5.2 6.2 MoM -13.1 -6.5 -13.1 -9.4 YoY -29.4 -22.4 -30.9 -28.8

Outlook
Precious metals prices in todays trade are expected to trade on a lower note taking cues from expectations of favourable US jobs data which lead to concerns that Fed will pullback its stimulus spending. Further, SPDR gold holdings at lowest level since February 2009 coupled with stronger DX will also add downside pressure on the prices. In the Indian markets, appreciation in the Rupee will exert downside in prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Aug13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for July 5, 2013 Support 1236/1230 26000/25900 19.10/18.90 40500/40100 Resistance 1248/1255 26250/26400 19.50/19.70 41300/41700

Rs / kg

40484.0

-1.2

4.4

-7.5

-23.0

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Friday| July 5, 2013

International Commodities
Energy
Market Highlights - Crude Oil (% change)
as on 4 July, 2013 WoW 1.1 6.0 MoM 1.8 6.8 YoY 2.2 15.5

Crude Oil
Crude Oil Unit $/bbl $/bbl Last 104.1 101.2

Less volatility was observed in yesterdays trade as US markets were closed yesterday on the back of Independence Day holiday. On the fundamental front, prices traded on a mixed note on account of sharp decline in inventories during the week along with unrest in Egypt. However, strength in the DX capped sharp gains in the prices. On the domestic bourses, prices declined 0.6 percent as a result of appreciation in the Indian Rupee. The commodity closed at Rs.6,075/bbl after touching an intra-day low of Rs.6,060/bbl on Thursday.

Brent (Spot) Nymex Crude (Aug 13)** ICE Brent Crude (Aug13) MCX Crude (July 13)

Prev. day -0.2 1.6

$/bbl

105.5

-0.2

2.6

2.2

4.8

Rs/bbl

6075.0

-0.6

3.9

14.6

25.9
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (July 13) Unit $/mmbtu Rs/ mmbtu Last 3.669 220.8

(% change)

as on 4 July, 2013

Natural Gas
Nymex natural gas prices fell around 0.6 percent yesterday on the back of strength in the DX. However, warm weather conditions will lead to rise in air conditioners demand coupled with less than expected rise in natural gas inventories cushioned sharp fall in the prices. Gas prices touched an intra-day low of $3.616/mmbtu and closed at $3.669/mmbtu in yesterdays trade. On the MCX July contract, gas prices slipped 0.1 percent and closed at Rs.220.80/mmbtu after touching an intra-day low of Rs.218.80/mmbtu on Thursday. Outlook From the intra-day perspective, we expect crude oil prices to trade mixed on the back of more than forecast of decline in US crude oil inventories during the week, unrest in Egypt along with weakness in the DX. However, expectations of favorable jobs data from the US will lead to concerns that Fed will pullback its stimulus measures and thereby correction can be seen in the later part of the trade. In the Indian markets, appreciation in the Rupee will add downside pressure in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude July13 $/bbl Rs/bbl valid for July 5, 2013 Support 100.30/99.30 6030/5970 Resistance 101.80/102.60 6120/6170

Prev. day -0.6 -0.1

WoW 1.94 2.32

MoM -8.18 -2.95

YoY 25.01 36.80

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Friday| July 5, 2013

International Commodities
Base Metals
The base metals pack traded on a lower note in yesterdays trading session on the back of contraction in the Euro Zone GDP data coupled with stronger DX. Additionally, concerns that Chinese economy will not be able to meet its target of 7.5 percent growth in this year added downside pressure. Further, mixed LME inventories scenario exerted downside pressure on the prices. However, sharp downside in prices was cushioned as a result of recovery in the global market sentiments. In the Indian markets, appreciation in the Rupee acted as a negative factor for prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Aug13) LME Aluminum (3 month) MCX Aluminum (July13) LME Nickel (3 month) MCX Nickel (July13) LME Lead (3 month) MCX Lead (July13) LME Zinc (3 month) MCX Zinc (July13)
Source: Reuters

as on 4 July, 2013 WoW 2.8 MoM -11.7 YoY -9.9

Last 6925.0

Prev. day -1.0

$/tonne

Rs/kg

420.0

-1.4

4.0

-0.1

-2.0

$/tonne

1809.5

0.0

2.1

-6.9

-7.0

Rs /kg

107.5

-0.3

3.8

-1.3

0.9

Copper
Copper prices fell around 1 percent in yesterdays trade on the back of Freeport mine operating at full capacity which was closed due to accident. Further, contraction in the Euro Zone GDP also added downside pressure on the prices. Additionally, rise in LME copper inventories around 0.4 percent which stood at 663,175 tonnes coupled with stronger DX acted as a negative factor. The red metal touched an intra-day low of $6917.5/tonne and closed at $6925/tonne in yesterdays trading session. On the domestic front, prices dropped 1.4 percent as a result of appreciation in the Rupee and closed at Rs. 420/kg, after touching an intra-day low of Rs.419.50/kg on Thursday. Outlook In todays session, we expect base metals prices to trade on lower note on the back of expectation of positive jobs data from US will lead to concerns that Fed will reduce its bond buying program. Further, strength in the DX coupled with Freeport mine operating at full capacity will add downside pressure on prices. However, sharp downside will be cushioned on account of upbeat global markets along with favourable economic data from Euro Zone. In the Indian markets, appreciation in the Rupee will act as negative factor for prices on the MCX. Technical Outlook
Unit MCX Copper Aug13 MCX Zinc July 13 MCX Lead July 13 MCX Aluminum July13 MCX Nickel July 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for July 5, 2013 Support 416/413 110.0/109.0 123.50/122.50 106.80/105.80 826/820 Resistance 422/426 112.0/112.80 125.0/126.0 108.20/109.0 838/844

$/tonne

13817.0

-0.4

-0.1

-9.3

-17.4

Rs /kg

831.5

-0.8

0.7

-3.7

-10.6

$/tonne

2068.0

-0.7

1.0

-7.5

9.8

Rs /kg

124.3

-1.0

1.4

-1.9

18.8

$/tonne

1860.0

-0.8

0.6

-4.8

-0.3

Rs /kg

111.0

-1.1

1.8

1.3

7.2

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 4 July 663,175 5,428,450 190,512 1,038,450 197,575
th

3 July 660,725 5,436,400 190,590 1,043,700 197,750

rd

Actual Change 2,450 -7,950 -78 -5,250 -175

(%) Change 0.4 -0.1 0.0 -0.5 -0.1

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| July 5, 2013

International Commodities
Important Events for Today
Indicator German Factory Orders m/m Non-Farm Employment Change Unemployment Rate Average Hourly Earnings m/m Country Euro US US US Time (IST) 3:30pm 6:00pm 6:00pm 6:00pm Actual Forecast 1.3% 162K 7.5% 0.2% Previous -2.3% 175K 7.6% 0.0% Impact Medium High High Medium

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