Commodities Daily Report

Thursday| September 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

Thursday| September 5, 2013

International Commodities
Overview
US Trade Balance was at a deficit of $39.1 billion in month of July. Indian HSBC Services PMI declined to 47.6-mark mark in the last month. European Retail Sales gained 0.1 percent in the month of July. UKs Services PMI rose by 0.3 points to 60.5-mark mark in month of August. Sharp Rupee appreciation led to fall in MCX prices in yesterdays trade trade.

Market Highlights (% change)

Last INR/$ (Spot) Prev day

as on September 4, 2013 w-o-w m-o-m y-o-y

67.065

0.8

2.5

-10.2

-17.1

Asian markets are trading on a mixed note today ahead of the monetary policy meeting from Japan to Euro Zone. Further, downside in markets was seen as a result of favorable economic data from US increased concerns of QE tapering from Federal Reserve in current month. US Trade Balance was at a deficit of $39.1 billion in Jul July as against a deficit of $34.5 billion a month ago. Investor's Business Daily (IBD) / TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism increased by 0.9 points to 46-mark mark in September from 45.1 45.1-level in August. Indian HSBC Services PMI declined to 47.6-mark mark in August from 47.9 47.9-level in July.

$/Euro (Spot)

1.3207

0.3

-1.0

-0.4

5.1

Dollar Index NIFTY

82.21

-0.2 0.2

0.9

1.1

3.5

5448.1

2.0

-4.2

-4.2

3.7

SENSEX

18567.6

1.8

-3.2

-3.2

1.5

DJIA

The US Dollar Index (DX) declined around 0.2 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. However, sharp downside in the currency was cushioned as a result of favorable economic data from US increased concerns regarding QE tapering from the Federal Reserve in this month. The currency touched an intra-day low of 82.11 and d closed at 82.21 on Wednesday. The Indian Rupee appreciated around 0.8 percent in yesterdays trading session. The currency appreciated on the back of aggressive selling of dollars from the Reserve Bank of India (RBI). Further, appointment of new RBI governor ernor Raghuram Rajan said that central banks primary role will be stable monetary policy which means low and stable inflation rates. It also raised hopes of new measures to be taken by the governor which supported an upside in the currency. Also, easing of norms by RBI for External Commercial Borrowing (ECB) to allow companies to use overseas loans acted as a positive factor. The currency touched an intra-day day high of 66.81 and closed at 67.07 on Wednesday. For the month of September 2013, FII outflows totaled at Rs.324.6 crores th ($47.44 million) as on 4 September 2013. Year to date basis, net capital th inflows stood at Rs.59845.20 crores ($11535.80 million) till 4 September 2013. UKs Services Purchasing Managers' Index (PMI) rose by 0.3 points to 60.5-mark in August as against a rise of 60.2-level level in July.

14930.9

0.7

1.0

-3.5

14.5

S&P

1653.1

0.8

-3.3

-3.3

17.7

Source: Reuters

The Euro gained around 0.3 percent in the yesterdays trading session taking cues from weakness in the DX. Further, favorable economic data from the region along with upbeat global market sentiments supported an upside in the currency. The Euro touched an intra-day day high of 1.3218 and closed at 1.3207 on Wednesday. Spanish Services PMI jumped into expansion in August to 50.450.4 mark from 48.5 level in July. Italian Services PMI rose marginally to 48.8 level in August from 48.7-mark 48.7 in July. Euro Zone Final Services rvices PMI declined to 50.7-mark 50.7 in August from 51 level in July. European Retail Sales gained 0.1 percent in July as against a decline of 0.7 percent in June. European Revised GDP for the quarter ended June remained unchanged at 0.3 percent.

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Commodities Daily Report

Thursday| September 5, 2013

International Commodities
Bullion Gold
Spot gold prices declined around 1.5 percent in yesterdays trade on the back of decline in SPDR gold holdings at 919.23 tonnes tonnes. However, sharp downside in prices was cushioned as result of upbeat global market sentiments coupled with strength in the DX. The yellow metal touched an intra-day low of $1384.24/oz /oz and closed at $1390.80/oz in yesterdays trading session. In the Indian markets, prices traded on a negative note by 5.3 percent as a result of sharp appreciation in n the Rupee and closed at Rs.32,604/10 gms after touching an intra-day low of Rs.34,4 Rs.34,410/10 gms on Wednesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1390.8 Prev. day -1.5 as on September 4, 2013 WoW -1.9 MoM 6.7 YoY -17.9

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (Oct13) MCX Gold (Oct13)

Rs/10 gms $/oz

32400.0

-2.3

17.0

17.0

8.7

1390.0

-0.7

-2.1

6.5

-18.1

$/oz

1389.9

-1.6

-2.1

6.0

-17.9

Rs /10 gms

32604.0

-5.3

-2.4

14.2

3.7

Silver
Taking cues from fall in gold prices along with downside in base metals complex, Spot silver prices declined around 3 percent in the yesterdays trade. However, weakness in the DX capped sharp fall in $23.31/oz and prices. The white metal touched an intra-day low of $2 closed at $23.40 in yesterdays trading session. On the domestic front, prices fell around 7.3 .3 percent o on account of sharp appreciation preciation in the Rupee and closed at Rs.5 Rs.53,141/kg after touching a low of Rs.52,800/kg on Wednesday. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Dec13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 23.4 56300.0 Prev day -3.0 -3.4

Source: Reuters

as on September 4, 2013 WoW -3.7 33.1 MoM 19.0 33.1 YoY -27.5 2.9

$/oz $/ oz

2371.0 23.4

-2.1 -4.2

-4.2 -4.2

20.0 15.8

-26.1 -27.6

Outlook
In the Indian markets, Rupee appreciation preciation is expected to exert downside pressure in gold and silver prices both. In the international markets, gold prices are expected to trade on a negative note on the back of weak global market sentiments. Additionally, decline in SPDR gold holdings will act as a negative factor. Further, strength in the DX will add downside pressure in p prices. Technical Outlook
Unit Spot Gold MCX Gold Oct13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for September 5 5, 2013 Support 1384/1376 32400/32200 23.20/22.90 54400/53900 Resistance 1406/1418 32900/33200 23.60/23.90

Rs / kg

53141.0

-7.3

-4.7

27.3

-12.3

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

55400/55900

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Commodities Daily Report

Thursday| September 5, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 1.2 percent in the yesterdays trading session taking cues from estimates of limited military action by US on Syria. Further, favorable economic data from US has increased concerns of QE tapering from Federal Reserve in this month which exerted downside pressure on prices. However, sharp downside in prices was cushioned as result of weakness in the DX along with upbeat global market sentiments sentiments. Crude oil prices touched an intra-day low of $106.77/bbl /bbl and closed at $10 $107.20/oz in yesterdays trading session. On the domestic bourses, MCX crude September contract slipped around 5.1 percent as a result of Rupee appreciation preciation and prices touched an intra-day low of Rs.7,104/bbl /bbl and closed at Rs.7, Rs.7,127/bbl on Wednesday. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories declined by 4.2 million barrels to 362.0 million barrels for the week ending on 30th August 2013. Gasoline inventories dropped by 387,000 barrels to 218.72 million barrels and whereas distillate inventories slipped by 109,000 barrels to 129.08 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 ude oil inventories is expected to fall by 1.3 million barrels for the week ending on 30th August 2013. Gasoline stocks are expected to drop by 0.3 million barrels whereas distillate inventories are expected to shoot up by 0.6 million barrels for the same period. Outlook From the intra-day day perspective, we expect crude oil prices to trade lower on the back of weak global markets sentiments coupled with strength in the DX. Further, expectations of limited military actions against Syria will exert downside ide pressure on prices prices. However, sharp upside in the prices will be prevented as a result of decline in API crude oil inventories in yesterdays trade and forecast for fall in US crude oil inventories in todays trade. In the Indian markets, ap appreciation in the Rupee will add downside pressure in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Sep13 $/bbl Rs/bbl valid for September 5 5, 2013 Support 106.40/105.50 7060/7000 Resistance 108.50/109.75 7200/7280
Source: Telequote Source: Telequote

Market Highlights - Crude Oil (% change)

Crude Oil Brent (Spot) Nymex Crude (Oct 13) ICE Brent Crude (Sep13) MCX Crude (Sep 13) Unit $/bbl $/bbl Last 117.6 107.2 Prev. day 0.1 -1.2

as on September 4, 2013 WoW -0.5 -1.6 MoM 6.1 2.7 YoY 1.9 12.5

$/bbl

114.9

-0.7

-1.5

5.7

0.6

Rs/bbl

7127.0

-5.1

-3.0

8.9

34.1

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Sep 13) Unit $/mmbtu Rs/ mmbtu Last 3.674 244.1 Prev. day 0.2 -3.8

as on September 4, 2013 MoM 10.16 19.31 YoY 31.21 56.07

Source: Reuters

WoW 2.74 2.39

Technical Chart NYMEX Crude Oil

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Thursday| September 5, 2013

International Commodities
Base Metals
Base metals pack declined in the yesterdays trade taking cues from favorable economic data from US had increased concerns of QE tapering from the Federal Reserve. Further, mixed LME inventories exerted downside pressure on the prices. However, sharp downside in prices was cushioned as a result of weakness in the DX, , favorable economic data from Euro Zone and UK along with upbeat global market sentiments. In the Indian markets, appreciation preciation in the Rupee acted as a negative factor for prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov13) LME Aluminum (3 month) MCX Aluminum (Sep13) LME Nickel (3 month) MCX Nickel (Sep13) LME Lead (3 month) MCX Lead (Sep13) LME Zinc (3 month) MCX Zinc (Sep13)
Source: Reuters

as on September 4, 2013 WoW -1.7 MoM -9.1 YoY -6.5

Last 7135.8

Prev. day -1.6

$/tonne

Rs/kg

483.7

-5.1

-0.1

13.0

12.6

$/tonne

1791.0

-1.8

-3.9

-0.7

-7.5

Rs /kg

117.3

-5.3

-2.8

7.7

9.0

Copper
LME Copper declined 1.6 percent yesterday on account of favourable economic data from the US increased concerns of pullback in stimulus measures from the Federal Reserve. Further, rise in LME copper inventories by 0.2 percent which stood at 603,900 tonnes acted as negative factor. However, sharp downside in prices was cushioned on account of upbeat global market sentiments coupled with weakness in the DX DX. The red metal touched an intraday low of $7087 087/tonne before closing at $7135.80/tonne on Wednesday. The near month copper contract on the MCX dropped 5.1 percent on account of appreciation preciation in the Rupee and closed at Rs. Rs.483.70/kg in the last trading session. Outlook In todays session, we expect base metals prices to trade on a negative note on the back of weak global market sentiments along with strength in the DX. Further, expectations of un unfavorable economic data from Euro Zone will exert downside pressure on prices. Additionally, non-manufacturing manufacturing data and other economic data from US in evening session will add downside pressure in prices. In the Indian markets, appreciation preciation in the Rupee will add downside pressure in prices on the MCX. Technical Outlook
Unit MCX Copper Nov13 MCX Zinc Sep13 MCX Lead Sep 13 MCX Aluminum Sep13 MCX Nickel Sep 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for September 5 5, 2013 Support 478/474 122.0/121.0 140.0/139.0 116.0/115.0 902/894 Resistance 487/492 124.50/125.50 142.50/144.0 118.50/119.80 917/925

$/tonne

13670.0

-0.7

-3.9

-1.4

-14.6

Rs /kg

910.2

-4.0

-3.3

7.2

1.5

$/tonne

2136.5

-0.9

-3.5

0.3

7.4

Rs /kg

141.7

-4.5

-3.4

8.8

28.0

$/tonne

1873.0

-1.7

-4.2

0.2

0.0

Rs /kg

123.4

-5.2

-3.5

8.9

18.7

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 4th September 603,900 5,386,625 213,804 992,600 185,350 3rd September 602,850 5,389,175 213,270 997,600 184,725 Actual Change 1,050 -2,550 534 -5,000 625 (%) Change 0.2 0.0 0.3 -0.5 0.3

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Thursday| September 5, 2013

International Commodities
Important Events for Today
Indicator Country Time (IST) Actual Forecast Previous Impact

Monetary Policy Statement BOJ Press Conference Halifax HPI m/m French 10-y Bond Auction Spanish 10-y Bond Auction German Factory Orders m/m Asset Purchase Facility Official Bank Rate MPC Rate Statement Minimum Bid Rate ADP Non-Farm Employment Change ECB Press Conference Unemployment Claims Revised Nonfarm Productivity q/q ISM Non-Manufacturing PMI Factory Orders m/m Crude Oil Inventories G20 Meetings

Japan Japan UK Euro Euro Euro UK UK UK Euro US Euro US US US US US All

Tentative Tentative 5 -7
th th

-0.7% 375B 0.5% 0.5% 175K 332K 1.6% 55.2 -3.4% -1.3M -

0.9% 2.32/1.7 4.72/2.3 3.6% 375B 0.5% 0.5% 200K 331K 0.9% 56.0 1.5% 3.0M -

High High Medium Medium Medium Medium High High High High High High High Medium High Medium Medium Medium

Tentative Tentative 3:30pm 4:30pm 4:30pm Tentative 5:15pm 5:45pm 6:00pm 6:00pm 6:00pm 7:30pm 7:30pm 8:30pm Day 1

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