Commodities Evening Update

Friday | July 12, 2013

International Commodities

Content
Days overview Market Highlights Outlook Important Events for Today

Research Team
Reena Rohit Chief Manager Non-Agri Commodities and Currencies 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 Evening Update

Friday | July 12, 2013

International Commodities
News and Analysis European Industrial Production declined by 0.3 percent in May. Precious metals, base metals & crude oil heading for weekly gain. Global central bankers indicate accommodative monetary policies, thereby boosting sentiments. But comments by the Chinese officials that they were comfortable with below 7 percent growth rates poured highlight over expected quarterly results of China at the beginning of next week. Despite decline industrial production in the Euro Zone for the month of May13, European equities are trading higher today as sentiments are positive on account of accommodative policy indications by global policymakers. US stock futures are also trading in the green on account of recent remarks by Fed Chairman at the Cambridge University. European Industrial Production declined by 0.3 percent in May as against a rise of 0.5 percent a month ago. Precious metals, base metals and crude oil are headed for their biggest weekly gain post the announcement by Federal Reserve in May that the central banker would begin its tapering program. Reemergence in market sentiments has been seen during the week after Fed Chairman reiterated concerns over the unemployment rate in the US and said that an easy monetary policy would continue until the scenario in the job market stabilizes. This provided a boost to market sentiments and led commodity prices higher. Gold prices in the international and domestic markets are currently trading in the negative territory but prices have increased more than 4 percent in dollar terms and about 2 percent on the MCX over the week. Spot Gold prices are currently trading around $1270.80/oz and on the MCX, prices are hovering around Rs26,534/10gm. Copper prices touched an intra-day high of $7036/tonne but slipped below the crucial $7000/tonne mark. Prices are currently hovering around $6940/tonne. On the MCX however, prices are trading lower around 1 percent despite depreciation in the Rupee. Inventories on the LME declined 2.7 percent, by 4645 tonnes to 168,376 tonnes day and this factor supported prices to cross the $7000/tonne mark. Crude oil prices traded on a flat note on the Nymex and the MCX and gains in prices were capped as latest projections by the IEA (International Energy Agency) indicated that demand in the coming year would be weak, while supply is expected to rise. On the back of slowing consumption growth especially in the developed economies, overall fundamentals for the coming year are weak. Crude oil prices on the Nymex had touched a weekly high of $107.45/bbl but prices could not sustain around these levels as demand-side concerns impacted prices. Performance during the day
Index Nifty Sensex Nikkei Kospi FTSE Open High

as at 4.30 pm 12 July 13
Low Last % Chg from Prev day

6000.50 19898.69 14475.17 1873.66 15702.47

6019.00 19991.94 14574.17 1873.66 15727.13

5951.15 19785.59 14417.30 1863.40 15571.44

6009.00 19958.47 14506.25 1869.98 15571.44

1.25 1.44 0.23 -0.41 0.04

Source: Reuters

as at 4.30 pm 12 July 13
Currency Dollar Index Euro/$ Spot INR/$ Spot Open High Low Current % Chg from Prev day

82.93 1.3095 59.75

83.32 1.3101 60.20

82.885 1.3022 59.74

83.245 1.3028 59.81

0.40 -0.50 -0.02

Source: Reuters

as at 4.30 pm 12 July 13
Commodity Spot Gold Comex Gold Aug13 MCX Gold Aug13 Spot Silver Comex Silver Sept13 MCX Silver Sept13 Crude Oil Nymex Aug 13 ICE -Brent Crude Oil MCX Crude Oil Aug 13 Copper LME - 3 Month MCX Copper Aug13 Zinc LME - 3 Month Zinc MCX - July13 Lead LME - 3 Month Lead MCX - July13 Nickel LME - 3 Month Nickel MCX July13 Aluminum LME - 3 Month Aluminum MCX July13 Unit Open High Low Last % Chg from Prev day

$/oz $/oz Rs/10 gms $/oz $/oz

1286.06 1282.30 26693.00 20.13 0.20075 41561 104.58 107.33 6283 7005.00 422.00 1903.00 112.20 2076 123.65 13700 820.70 1835.00 107.75

1288.25 1282.30 26693.0 20.21 0.20135 41689 104.98 107.90 6304 7036.00 422.10 1906.00 112.70 2076 124.40 13715 821.40 1837.00 108.50

1267.29 1274.30 26520.0 19.62 0.1971 41181 104.36 107.28 6267 6910.00 418.20 1880.00 111.60 2050 122.70 13558 812.80 1815.00 107.30

1270.80 1276.30 26534.00 19.69 0.1971 41223 104.78 107.79 6281 6940.00 418.95 1895.00 112.20 2070 123.50 13630 817.20 1830.50 108.10

-1.08 -0.30 -0.54 -2.04 -1.17 -1.14 -0.12 0.06 -0.03 -0.89 -0.97 -0.17 -0.27 -0.05 -0.28 -0.09 -0.21 -0.05 0.00

Rs/kg $/bbl

$/bbl Rs/bbl $/tonne Rs/kg $/tonne Rs/kg $/tonne

Rs/kg $/tonne Rs/kg $/tonne Rs/kg

Source: Reuters

Commodities Evening Update

Friday | July 12, 2013

International Commodities
Outlook

Taking cues from indications by global central bankers to continue with accommodative monetary policies, we expect precious metal prices to trade higher today. European Central Bank executive board member indicated that slow recovery in the Euro Zone continues to demand an easy monetary policy. Similar comments have been seen over the week from the US and Japan, thus supporting sentiments further. Copper prices have slipped below the crucial $7000/tonne mark today and prices are expected to trade lower on the back of comments by Chinese Finance Minister that the Chinese economy would grow lower than the governments target for 2013 and growth as low as 6.5 percent would be considered tolerable. The country is now looking forward to more sustainable expansion and this sudden reversal from high growth rates could be detrimental for base metals.

Technical Outook for evening session 12 July 13 ( CMP as of 5.00 pm)

Commodity Gold Aug'13 Spot Gold Silver Sept13 Spot Silver Crude Oil Aug13 Nymex Crude Oil Aug13 Natural Gas July13 LME Copper Copper Aug13 Zinc July13 Lead July13 Aluminum July13 Nickel July13 Unit Rs/10 gm $/oz Rs /kg $/oz Rs /bbl $/bbl Rs /mmBtu $/tonne Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg Support 2 Support 1 CMP Resistance1 Resistance 2

26300 1260 40700 19.45 6170 102.8 213 6830 413 110.3 121.2 106.5 806

26450 1269 41000 19.6 6220 103.7 216 6880 416 111.4 122.4 107.3 812

26560 1275 41265 19.78 6280 104.7 219.1 6940 419.3 112.25 123.7 108.25 817.4

26700 1282 41600 19.95 6310 105.2 222 6990 422 113.4 124.6 109 826

26910 1293 42000 20.15 6360 106.1 224 7050 426 114.3 125.7 109.8 834

Important Events for Today

Indicator Country Time (IST) Actual Forecast Previous Impact

New Loans Industrial Production m/m PPI m/m Core PPI m/m Prelim UoM Consumer Sentiment FOMC Member Bullard Speaks

China Euro US US US US

1:30pm 2:30pm 6:00pm 6:00pm 7:25pm 10:30pm

861B -0.3% -

800B -0.2% 0.5% 0.2% 85.3 -

667B 0.5% 0.5% 0.1% 84.1 -

Medium Medium High Medium High Medium