Commodities Daily Report

Monday November 26, 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 Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Monday November 26, 2012

International Commodities
Overview
German Ifo Business Climate rose to 101.4 levels in November UK BBA Mortgage Approvals rose to 33.0 K in the month of October. Indian rupee depreciated 0.5 percent in the last week and is trading around 55.44. German Ifo Business Climate rose to 101.4 levels in the month of November as compared to 100 levels in the month of October. Asian markets are trading on a mixed note taking cues from upbeat global market sentiments as spending in US is witnessing a boost at the start of the holiday season as South Korea consumer confidence rose. The US Dollar Index (DX) declined 1.3 percent on a weekly basis on the back of rise in the risk appetite in the global markets resulting from speculation that European policy makers might agree upon providing aid to Greece. This reduced the demand for the low yielding currency that is US Dollar Index (DX). Further, positive data from the US also created upbeat market sentiments thereby weighing on the index.

Market Highlights (% change)

Last INR/$ (Spot)
55.44

as on 23 November, 2012

Prev day
-0.6

w-o-w
-0.5

m-o-m
-3.2

y-o-y
-5.8

$/Euro (Spot)

1.2975

0.7

1.8

0.0

-2.7

Dollar Index

80.24

-0.9

-1.3

0.3

1.1

NIFTY

5626.6

-0.02

0.94

-1.14

18.54

SENSEX

18506.57

-0.06

1.08

-1.09

16.70

DJIA

13009.68

1.4

3.4

-0.71

15.6

US equities settled on a firm note on the back of positive economic data from the nation. US housing sector are witnessing signs of improvement where as unemployment claims declined showing signs that the nation is on the path of recovery. The index touched a weekly low of 80.16 and closed at 80.24 on Friday. The Indian Rupee depreciated 0.5 percent in the last week taking cues from dollar demand from the oil importers and banks. Sustained capital inflows by the FII also caused rupee to depreciate in the last week. Sentiments in the domestic markets became weak as the parliament was adjourned for the second day without discussions over the reforms. Despite positive global market sentiments and weakness in the DX, domestic rupee fell due to month end dollar demand. It touched a weekly low of 55.60 and closed at 55.44 on Friday. For the current month FII inflows totaled at Rs. 5710.80 crores till 23 November 2012. While year to date basis, net capital inflows stood at Rs. rd 99405.70 crores till 23 November 2012.
rd

S&P

1409.2

1.3

3.6

-0.3

21.3

Source: Reuters

The Euro swung between gains and losses and settled 0.7 percent higher week on week. Speculation that European policy makers might agree to provide aid to Greece in the coming week created bullish market sentiments. Further, weakness in the DX also supported an upside in the currency. Additionally positive data from the Germany also added to the gains of the currency. The currency touched a weekly high of 1.2991 and closed at 1.2975 on Friday.

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Commodities Daily Report

Monday November 26, 2012

Bullion Gold

International Commodities

Spot gold prices swung between gains and losses and finally settled 2.3 percent higher on the back of speculation that Greece might be able to receive a bailout along with unexpected rise in the business sentiment of the Germany. This strengthened Euro thereby pressurizing US Dollar Index. A weaker dollar supported an upside in the gold prices. Further, reports of improved buying by the central bankers in the wake of persistent concerns of the Euro zone also added to the gains of the gold prices. The yellow metal touched weekly high of $1,754.10/oz and closed at $1,752.50 on Friday. On the MCX, Gold December contract ended 2 percent higher taking cues from strength in the spot gold prices along with depreciation in the Indian rupee. Gold prices on the MCX closed at Rs.32,281/10 gms on Friday after touching a weekly high of Rs. 32,309/ 10gms. Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, declined 0.03 percent to 1342.197 tonnes till November 23rd, 2012 as compared to 1342.63 tonnes till November 16th, 2012

Market Highlights - Gold (% change)

Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Dec12) MCX Gold (Dec12) Unit $/oz Rs/10 gms $/oz 1751.3 $/oz Rs /10 gms
32281.0 1.4 32050.0 0.5

as on 23 November, 2012 Prev day

1.4

Last
1752.5

WoW
2.3

MoM
2.6

YoY
3.5

#N/A

4.4

11.8

1734.5

0.2

1.2

1.4

3.2

1.35

2.22

2.52

3.28

2.0

4.2

12.2

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz
63240.0 1.0

as on 22 November, 2012 WoW

5.6

Silver
Spot silver gained 5.6 percent tracking strength in the spot gold prices along with firmness in the base metals pack. Additionally, weakness in the DX also supported an upside in the silver prices. The white metal touched a weekly high of $34.13/oz and closed at $34.10/oz on Friday. In the Indian markets, MCX silver prices gained 2.2 percent and closed at Rs. 63,526/kg on Friday and touched a weekly high of Rs. 63,620 /kg. MCX silver prices continued to extend gains of the previous week on the back of depreciation in the Indian rupee. On a weekly basis, holdings in the iShares Silver Trust fell by 1.2 percent to 9,818 tonnes till November 23rd, 2012 from previous week holdings of 9940.01 tonnes till November 16th, 2012.

Last
34.1

Prev day
2.5

MoM
7.7

YoY
7.5

2.6

5.6

13.5

Rs/1 kg
33.4 0.4 3.5 5.4 6.0

$/oz 34.11 $/ oz
63526.0 2.2 4.1 7.3 #N/A

2.31

4.41

7.37

6.99

Rs / kg
Source: Reuters

Technical Chart Spot Gold

Outlook
In todays session we expect precious metals to trade on a firm note due to mixed global market sentiments. Market participants are awaiting outcome of the European Finance Ministers meeting to be scheduled today to negotiate on aid for Greece. However, strength in the DX is expected to cap sharp gains in the gold prices. In the domestic markets appreciation in the Indian rupee will however cap sharp upside in the precious metals on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for November 26, 2012 Support 1745/1740 32180/32080 33.81/33.60 62900/62500 Resistance 1753/1757 32320/32400 34.13/34.81 63500/63900
Source: Telequote

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Commodities Daily Report

Monday November 26, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices witnessed a volatile session throughout the week and ended 1.9 percent higher week on week. Prices fell on Tuesday as cease fire amongst the Israel and Palestinian leaders eased concerns of supply disruption. However, prices gained towards the end as economic data from the US and China indicated that the economy was on the path of recovery. Further, less than expected decline in the US crude oil inventories also pushed prices upwards. Weakness in the DX also supported an upside in the crude oil prices. Crude oil prices touched a weekly high of $89.80/bbl and closed at $88.28/bbl on Friday. On the domestic bourses, prices gained 1.6 percent and closed at Rs.4,906/bbl after touching a high of Rs.4,941/bbl on Friday. Depreciation in the Indian rupee also supported an upside in the crude prices in the last week on MCX Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Dec12) ICE Brent Crude (Dec12) MCX Crude (Dec12) Unit $/bbl $/bbl Last
87.0 111.8 88.3

as on 23 November, 2012 WoW

0.5 3.6 1.9

Prev. day
#N/A 0.5 1.3

MoM
0.4 3.2 1.9

YoY
-9.2 4.1 -8.2

$/bbl
111.4 0.8 2.2 2.9 4.1

$/bbl
4906.0 1.4 1.6 5.1 #N/A

Rs/bbl
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Nov 12)

as on23 November, 2012

Unit $/mmbtu Rs/ mmbtu

Last 3.901 216.1

Prev. day -0.31 -0.05

WoW 2.90 3.45

MoM 10.64 13.26

YoY 12.36 19.86

Natural Gas
Nymex Natural Gas prices gained 2.9 percent in the last week due to expectation of cooler weather in the coming days which might improve the demand for gas. Additionally, weakness in the DX also supported an upside in the natural gas prices. Prices touched a weekly high of $3.933 mmbtu and closed at $3.901 mmbtu. In the domestic markets prices remained firm tracking firmness in the international prices along with depreciation in the Indian rupee.

Source: Reuters

Technical Chart Nymex Crude Oil

Outlook In the intra-day, we expect crude oil prices to trade on a weak note on the back of mixed global market sentiments along with strength in the DX. However, sharp downside in the prices are expected to be capped taking cues from positive data from the US and Chinese economy in the last week. In the domestic markets appreciation in the Indian rupee will exert downside pressure on the crude oil prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Nov 12 $/bbl Rs/bbl valid for November 26, 2012 Support 87.35/86.82 4870/4840 Resistance 88.61/89.51 4940/4990
Source: Telequote

Technical Chart Nymex Natural Gas

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Commodities Daily Report

Monday November 26, 2012

International Commodities
Base Metals
The base metal pack traded on a positive note on the back of rise in risk appetite in the global market in the last week. Prices witnessed an uptrend on optimism that US President Barack Obama might be able to resolve the fiscal cliff issue of the nation. Additionally, weakness in the DX also added to the gains in the prices. Expectation that the European finance ministers might be able to negotiate and agree on providing aid to Greece also created supportive market sentiments. In the Indian markets depreciation in the Indian Rupee acted as a supportive factor for the base metal prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum (Nov12) Rs /kg
108.9 2.0 1.4 4.5 #N/A

as on 23 November, 2012 WoW

2.2

Last
7779.8

Prev. day
0.7

MoM
-0.9

YoY
6.9

$/tonne

Rs/kg

431.0

1.0

2.2

1.0

#N/A

$/tonne

1979.5

1.7

1.3

1.4

-2.6

Copper
Copper, the leader of the base metals complex gained 2.2 percent taking cues from positive economic data from the US and China along with weakness in the DX. Decline in LME Copper inventories by 1.7 percent acted as a supportive factor for the copper prices in the last week. LME Copper stocks stood at 2,49,825 tonnes. The red metal closed at $7,779.8/tonne on Friday. On the domestic front, prices gained 2.2 percent and closed at Rs.431 per kg after touching a weekly high of Rs.432.50 /kg tracing firmness in the international prices along with depreciation in the Indian rupee. Outlook From the intraday perspective, base metal prices are expected to trade on a positive note taking cues from mixed global market sentiments. Strength in the DX might however cap sharp gains in the base metals prices. Investors are also awaiting outcome from the European finance ministers meeting in the later part of the day today to decide on aid for Greece. Appreciation in the Rupee will however cap sharp gains in the base metal prices on the MCX. Technical Outlook
Unit MCX Copper Nov12 MCX Zinc Nov12 MCX Lead Nov12 MCX Aluminum Nov12 MCX Nickel Nov12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for November 26, 2012 Support 428/425 107.2/106.4 121.5/120.6 108.2/107.5 911/904 Resistance

LME Nickel (3 month) MCX Nickel (Nov12) LME Lead (3 month) MCX Lead (Nov12) LME Zinc (3 month) MCX Zinc (Nov12)

$/tonne

16626.0

0.6

3.8

1.3

-3.4

Rs /kg

920.1

0.8

4.2

4.3

#N/A

$/tonne

2201.0

1.7

1.8

8.2

9.2

Rs /kg

121.9

2.0

1.5

11.3

#N/A

$/tonne

1956.5

1.7

1.5

5.5

2.1

Rs /kg

107.7

2.4

2.1

9.9

#N/A

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 22nd November
249825 5177425 133812 1200550 361525

21st November
251100 5159425 133908 1200825 361625

Actual Change -1,275 18,000 -96 -275 -100

(%) Change -0.5 0.3 -0.1 0.0 0.0

Source: Reuters

Technical Chart MCX Copper

433/436 108.5/109.3 122.9/123.6 109.5/110.2 927/935

Source: Telequote

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Commodities Daily Report

Monday November 26, 2012

International Commodities
Important Events for Today

Indicator Monetary Policy Meeting Minutes BOJ Gov Shirakawa Speaks GfK German Consumer Climate Eurogroup Meetings

Country JPY JPY EUR EUR

Time (IST) 5:20am 6:30am 12:30pm All Day

Actual

Forecast

Previous

Impact Medium Medium

6.3

6.3

Medium High

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