Commodities Daily Report

Tuesday| September 11, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Overview:

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135 Anish Vyas - Research Associate anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Tuesday| September 11, 2012

International Commodities
Overview
US Consumer Credit declined by $3.3 billion in July. European Sentix Investor Confidence was at -23.2-mark in September. UKs RICS House Price Balance was at -19 percent in the last month. Chinas New Loans increased to 704 billion Yuan in August. LME Copper inventories declined by 0.6 percent in yesterdays trade.
INR/$ (Spot) Last 55.44 Prev day -0.1 w-o-w 0.2 m-o-m -0.2 y-o-y -16.2

Market Highlights (% change)

as on 10 September, 2012

Asian markets are trading on a bearish note due to rise in the risk aversion amongst market participants after concerns rose that European leaders might not be able to resolve the crisis soon. US Consumer Credit declined by $3.3 billion in July as against a rise of $9.8 billion a month ago Chinas New Loans increased to 704 billion Yuan in August from previous rise of 540 billion Yuan in July The US Dollar Index (DX) declined 0.1 percent as concerns again revived that European leaders might not be able to contain the debt crisis. Also investors awaited the decision with respect to further stimulus measures to be announced in the Federal Reserve meeting to be held on Thursday this week. This led to rise in the risk aversion amongst market participants thereby increasing the demand for the low yielding currency that is DX. US equities traded on a mixed note with investors following a wait and watch stance ahead of the policy meeting to be held on September 13, 2012. Investors are expecting stimulus measures to be announced in the meeting. The currency closed at 80.34 after touching a high of 80.14 on Monday. The Indian Rupee depreciated by 0.15 percent in the yesterdays trading session. The currency depreciated taking cues from mixed global market sentiments along with dollar demand from the oil companies. Additionally, a stronger DX also added downside pressure on the currency. However, expectations of stimulus measures from US and China cushioned sharp fall in the currency. It touched an intra-day low of 55.48 in yesterdays trade and closed at 55.44 on Monday. For the current month, FII inflows totaled at Rs 613.80 crores till 10 September 2012. While year to date basis, net capital inflows stood at Rs 63,683.40 crores till 10th September 2012.
th

$/Euro (Spot)

1.2757

-0.5

1.3

3.5

-6.5

Dollar Index

80.34

0.1

-1.1

-2.6

3.9

NIFTY

5363.5

0.4

2.1

0.3

6.0

SENSEX

17766.8

0.5

2.2

0.8

5.3

DJIA

13254.3

-0.4

1.2

0.6

20.6

S&P

1429.08

-0.6

1.6

1.7

19.2

Source: Reuters

The Euro declined 0.5 percent in yesterday session as there were concerns that Greece struggled to qualify for the aid payments along with strength in the DX. However, favorable economic data from the region cushioned sharp fall in the currency. It touched a low of 1.2754 and closed at 1.2757 on Monday. French Industrial Production increased by 0.2 percent for the month of July. European Sentix Investor Confidence was at 23.2-mark in September from previous decline of 30.3-level in August. Japans Business Survey Index (BSI) Manufacturing Index was at 2.5-mark in current quarter of 2012 as against a decline of 5.7level in Q2 of 2012. M2 Money Stock rose by 2.4 percent in August from previous rise of 2.2 percent in July. Japans Household Confidence increased by 0.8 points to 40.5mark in August when compared to rise of 39.7-level in July. Economy Watchers Sentiment declined by 0.6 points to 43.6level in last month from previous rise of 44.2-mark in July.

UKs Royal Institution of Chartered Surveyors (RICS) House Price Balance was at -19 percent in August from previous decline of 23 percent in July.

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Commodities Daily Report

Tuesday| September 11, 2012

Bullion Gold

International Commodities

Market Highlights - Gold (% change) Spot gold prices declined around 0.6 percent yesterday taking cues from rise in risk aversion in the global markets. Additionally, strength in the US Dollar Index (DX) also exerted downside pressure on the gold prices. The yellow metal touched an intra-day low of $1,724.3/oz and closed at $1,725.20/oz in yesterdays trading session. On the MCX, Gold October contract declined by 0.1 percent and closed at Rs31,900/10 gms after touching an intra-day low of Rs.31851/10 gms on Monday. However, depreciation in the Indian Rupee cushioned sharp fall in the prices on the MCX.
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMAPM Fix) Comex Gold (Dec12) MCX Gold (Oct12) Unit $/oz Rs/10 gms $/oz Last 1725.2 31900.0 Prev day -0.6 1.8

as on 10 September, 2012 WoW 2.0 2.1 MoM 7.2 6.2 YoY -7.1 15.4

1732.0

0.2

2.4

6.7

-6.4

$/oz Rs /10 gms

1728.7

-0.5

2.6

7.4

-6.9

31924.0

-0.1

2.0

6.2

13.2

Silver
Taking cues from fall in gold prices along with strength in the DX, Spot silver prices declined by more than 1 percent in yesterdays trading session. However, sharp downside in the prices was cushioned on account of upside in the base metals complex. The white metal touched an intra-day low of $33.22/oz and closed at $33.3/oz on Monday. In the Indian markets depreciation in the Rupee restricted sharp downside in the prices which declined by 0.1 percent and closed at Rs.64,024/kg after touching an intra-day low of Rs.63,759/kg in yesterdays trading session.

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last 33.3 63080.0 3357.0 3357.4 64024.0 Prev day -1.1 2.7 4.2 -0.2 -0.1

as on 10 September, 2012 WoW 3.7 4.6 5.8 7.0 7.2 MoM 19.8 16.0 19.7 20.9 20.0 YoY -19.7 -2.3 -18.9 -19.2 -1.9

Outlook
In todays session we expect precious metals to trade with negative bias on the back of rise in risk aversion in the global markets along with strength in the DX. Additionally, re-emergence of European debt crisis that European policymakers will not be able to solve it debt crisis will add downside pressure on the prices. In the Indian markets depreciation in the Rupee will cushion sharp fall in the prices. Technical Outlook
Unit Spot Gold MCX Gold Oct12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for September 11, 2012 Support 1726/1720 31820/31700 33.46/33.27 63750/63400 Resistance 1736/1741 32000/32100 33.80/34.01 64400/64800

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Tuesday| September 11, 2012

International Commodities
Energy
Market Highlights - Crude Oil (% change)
as on 10 September, 2012 WoW -0.6 -2.1 MoM 4.0 -1.4 YoY 10.6 -2.9

Crude Oil
Crude Oil Unit $/bbl $/bbl Last 96.5 113.6

Prev. day 0.1 0.2

Nymex crude oil prices swung between gains and losses but gained marginally around 0.1 percent in the yesterday trading session taking cues from expectations of stimulus measures from US and China. However, sharp upside in the prices was capped on the back of speculation of slowdown in the crude oil as prices are trading very high coupled with strength in the DX. Crude oil prices touched a high of $96.63/bbl and closed at $96.50/bbl in the yesterdays trading session. On the domestic bourses, prices increased by 0.63 percent on the back of depreciation in the Indian Rupee and closed at Rs.5,324/bbl after touching a high of Rs 5,354./bbl on Monday. API Inventories Forecast The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to decline by 2.1 million barrels for the week ending on 7th September 2012. Gasoline stocks are expected to fall by 1.9 million barrels and distillate inventories are expected to drop by 0.9 million barrels for the same week. Outlook In todays trade, we expect crude oil prices to trade on a sideways note on the back of expectations of stimulus measures from US and China along with expectations of decline in US crude oil inventories. While on the other hand, expectations that Euro Zone policymakers will not be able to solve Euro region debt crisis coupled with stronger DX will add downside pressure on the prices. Depreciation in the Indian Rupee will support upside on the crude oil prices on the MCX. Technical Outlook
Unit valid for September 11, 2012 Support Resistance

WTI (Spot) Brent (Spot) Nymex Crude (Oct12) ICE Brent Crude (Oct12) MCX Crude (Sept12)

$/bbl

96.5

0.1

0.1

4.1

10.7

$/bbl

114.8

0.5

-0.8

1.1

1.8

Rs/bbl

5324.0

0.3

-1.2

3.1

31.2

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Sept12) Unit $/mmbtu Rs/ mmbtu Last 2.665 148.3

(% change)

as on 10 September, 2012

Prev. day -0.93 -0.20

WoW -4.34 -4.63

MoM -4.24 -3.95

YoY -32.39 -19.92

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

NYMEX Crude Oil

$/bbl

95.83/95.25

97.28/98.01

MCX Crude Sept12

Rs/bbl

5290/5258

5370/5410

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Commodities Daily Report

Tuesday| September 11, 2012

International Commodities
Base Metals
The base metals pack traded on a positive note in the yesterdays trading session on the back of decline in LME inventories However; sharp upside in the prices was restricted on account of rise in risk aversion in the global markets along with strength in the DX. In the Indian markets depreciation in the Rupee supported upside in the prices. Copper Copper, the leader of the base metals complex gained by 1.1 percent in the yesterdays trading session on the back of decline in LME copper inventories by 0.6 percent which stood at 214,650 tonnes. However, weak global market sentiments along with strength in the DX capped sharp upside in the prices. The red metal touched a high of $8,054/tonne in yesterdays trade and closed at $8,069.30/tonne on Monday. On the domestic front, prices gained by 1.4 percent as a result of depreciation in the Indian Rupee and closed at Rs.453.0/kg on after touching a high Rs454.90/kg in the yesterdays trading session. Outlook From the intra-day perspective, we expect base metal prices to trade on a bearish note on the back of weak global market sentiments coupled with strength in the DX. Additionally, expectations that Euro Zone policymakers will not be able to solve Euro region debt crisis will add downside pressure on the prices. Depreciation in the Rupee will support upside in the prices in the Indian markets. Technical Outlook
Unit valid for September 11, 2012 Support Resistance

Market Highlights - Base Metals (% change)

Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum (Sept12) LME Nickel (3 month) MCX Nickel (Sept12) LME Lead (3 month) MCX Lead (Sept12) LME Zinc (3 month) MCX Zinc (Sept12) Rs /kg 110.5 $/tonne 2009.0 Rs /kg 117.1 $/tonne 2122.0 Rs /kg 928.0 $/tonne 16750.0 Rs /kg 112.2 $/tonne 2064.0 Rs/kg 453.0 $/tonne Last 8069.3

as on 10 September, 2012 WoW 5.3 MoM 9.0 YoY -8.7

Prev. day 1.1

1.4

5.4

10.0

8.9

2.2

7.2

11.2

-12.8

1.5

5.5

9.7

2.1

2.0

3.4

9.0

-21.2

2.1

2.6

8.0

-6.9

1.1

6.7

14.2

-13.0

1.7

6.3

12.7

1.7

2.4

7.5

10.3

-8.2

2.8

6.8

9.1

8.2

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 10 September 214,650 4,869,925 120,816 938,275 303,150
th

7 September 215,950 4,871,425 121,080 942,200 303,450

th

Actual Change -1,300 -1,500 -264 -3,925 -300

(%) Change -0.6 0.0 -0.2 -0.4 -0.1

Source: Reuters

Technical Chart LME Copper

MCX Copper Nov12

Rs /kg

449/444

456/460

MCX Zinc Sept12

Rs /kg

109.60/108.90

111.30/112.0

MCX Lead Sept12

Rs /kg

116.40/115.80

117.80/118.40

MCX Aluminum Sept12

Rs /kg

112.80/112.30

114.20/115.0

MCX Nickel Sept12

Rs /kg

921/914

938/950

Source: Telequote

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Commodities Daily Report

Tuesday| September 11, 2012

International Commodities
Important Events for Today

Indicator RICS House Price Balance BSI Manufacturing Index New Loans Trade Balance Trade Balance MPC Member Miles Speaks

Country UK Japan China UK US UK

Time (IST) 4:31am 5:20am 7:30am 2:00pm 6:00pm 10:45pm

Actual -19% 2.5 704B -

Forecast -22% -6.1 605B -8.9B -44.2B -

Previous -24% -5.7 540B -10.1B -42.9B -

Impact Medium Medium Medium Medium High Medium

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