Commodities Daily Report

Tuesday| June 25, 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

International Commodities
Overview
Indian Rupee depreciated around 0.9 percent in yesterdays trade. AIGJTF urged jewelers to stop sales of coins and bars to curb CAD. German Ifo Business Climate rose by 0.2 points to 105.9-mark in June. Japans CSPI increased by 0.3 percent in the last month. Although Asian markets opened todays trade in the negative territory, markets are currently trading marginally higher as a weaker Yen coupled with slightly positive economic data release from Japan in the morning help provide some respite to sentiments. However, over the trade concerns with respect to economic growth could come to the forefront again and lead to risk aversion. Following Reliance Capital's move to restrict sale of gold coins and bars, the All India Gems and Jewelry Trade Federation (AIGJTF) urged jewelers to stop the sales of coins and bars and support the government's measures to curb the high Current Account Deficit (CAD). This move in our opinion would secure the jewelers from further restrictions by the central bank, if any. Proactive decision-making by the jewelers themselves would stave off any demand-reducing efforts by the government. Reliance Capital, much ahead of the decision of others decided to stop new subscriptions to its gold plan in order to help the government in its efforts. Government efforts to curb gold imports and demand had already impacted Indian listed companies in the jewelry manufacturing business. Yesterday too, a sharp decline was seen in gold-related equity stocks as concerns over slowdown in demand made investors shun these stocks. Sentiment in the domestic gold market is expected to be weak and the international gold mining sector is also under pressure as miners writedown the value of their gold assets due to a sharp correction in prices. In view of a continuous fall in gold prices, the Central Board of Excise and Customs (CBEC) cut the import tariff value of gold and silver $421 per 10 gram and $709 per kg. Tariff value is the base price on which the customs duty is determined in order to prevent under-invoicing. The US Dollar Index (DX) gained around 0.1 percent in the yesterdays trading session on the back of rise in risk aversion in global markets which led to increase in demand for low yielding currency. Further, concerns about the Federal Reserves plan to reduce its stimulus spending supported an upside in the currency. The DX touched an intraday high of 83.05 and closed at 82.63 on Monday. For the month of June 2013, FII outflows totaled at Rs.6,776.0 crores ($1,142.57 million) as on 24th June 2013. Year to date basis, net capital inflows stood at Rs.76,429.10 crores ($14,210.40 million) till 24th June 2013.

Market Highlights (% change)

as on 24 June, 2013 w-o-w -2.9 m-o-m -7.4 y-o-y -4.7

$/Euro (Spot)

1.3117

0.0

-1.9

1.4

4.9

Dollar Index NIFTY

82.63

0.1

2.4

-1.3

4.0

5590.3

-1.4

-4.4

-6.3

8.2

SENSEX

18540.9

-1.2

-4.1

-5.8

1.4

DJIA

14659.6

-0.9

-3.4

-4.9

16.0

S&P

1573.1

-1.2

-4.0

-4.6

17.8

Source: Reuters

The Euro traded on a flat note and depreciated marginally in yesterdays trade on the back of weak global markets. Further, strength in the DX exerted downside pressure on the currency. The Euro touched an intra-day low of 1.3058 and closed at 1.3117 against the dollar on Monday. However, sharp downside in the currency was cushioned on account of favourable economic data from Germany. German Ifo Business Climate rose by 0.2 points to 105.9-mark in June as against a rise of 105.7-level in May. The Indian Rupee depreciated 0.9 percent in the yesterdays trading session. The currency depreciated on account of month end dollar demand from importers coupled with strength in the DX. Further, weak global and domestic markets also acted as a negative factor. Additionally, outflows of dollars from debt and equity markets exerted downside pressure on the currency. The Reserve Bank of India intervened and tried to provide respite to the fall in the Rupee, but the currency continued to depreciate. Indian Rupee touched an intra-day low of 59.825 and closed at 59.80 against dollar on Monday.

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Commodities Daily Report

International Commodities
Bullion Gold
Market Highlights - Gold (% change) Spot gold prices fell around 1.2 percent in the yesterdays trading session on account of strength in the DX. Further, concerns about the Fed plans for reduction in its bond buying program also exerted downside pressure on the prices. Additionally, weak global markets coupled with fall in SPDR holdings which is at lowest level since February 2009 acted as a negative factor. The yellow metal touched an intra-day low of $1275.74/oz and closed at $1281.30/oz in yesterdays trading session. In the Indian markets, prices ended on a negative note, declining 0.8 percent. The commodity closed at Rs.26725/10 gms after touching a low of Rs. 26650/10 gms on Monday. Depreciation in the Rupee prevented sharp fall in prices on the MCX.
Gold Gold (Spot) Unit $/oz Last 1281.3 Prev. day -1.2 as on 24 June, 2013 WoW -7.4 MoM -7.9 YoY -19.1

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (August13) MCX Gold (August13)

Rs/10 gms $/oz

26740.0

0.0

-4.0

1.1

-10.7

1286.8

-0.7

-7.1

-6.8

-18.0

$/oz

1276.8

-1.1

-6.6

-8.2

-18.5

Rs /10 gms

26725.0

-0.8

-4.1

1.1

-11.2

Silver
Taking cues from fall in gold prices along with downside in the base metals group, Spot silver prices fell around 2.1 percent in the yesterdays trade. Further, strength in the DX along with weak global markets added downside pressure on the prices. The white metal touched an intra-day low of $19.43/oz and closed at $19.70/oz in yesterdays trade. On the domestic front, prices fell 1.6 percent and closed at Rs.40,834/kg after touching a low of Rs.40,570/kg on Monday. Depreciation in the Rupee provided some respite to fall in prices on the MCX. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (July13) MCX Silver (July13) Unit $/oz Rs/1 kg Last 19.7 42140.0 Prev day -2.1 -0.4

Source: Reuters

as on 24 June, 2013 WoW -10.0 -6.1 MoM -12.9 -7.4 YoY -28.5 -21.1

$/oz $/ oz

1965.0 19.5

-1.1 -2.3

-10.2 -10.4

-12.6 -12.1

-26.5 -26.9

Outlook
From the intra-day perspective, we expect precious metals to trade lower on the back of weak global markets. Further, a stronger DX will act as a negative factor. In the Indian markets, depreciation in the Rupee will provide respite to fall in prices. Further, investment demand for gold on the domestic front will take a hit and figures in the coming month will show a decline trend as a result of measures taken by jewellers association to support government and curb the CAD. Jewellery demand will be majorly dependent on the wedding and festive demand coming ahead. Technical Outlook
Unit Spot Gold MCX Gold Aug13 Spot Silver MCX Silver July13 $/oz Rs/10 gms $/oz Rs/kg valid for June 25, 2013 Support 1279/1274 26600/26500 19.50/19.31 40500/40100 Resistance 1293/1301 26900/27050 19.86/20.08 41250/41700

Rs / kg

40834.0

-1.6

-6.3

-6.3

-23.9

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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International Commodities
Energy
Market Highlights - Crude Oil (% change)
as on 24 June, 2013 WoW -1.8 -2.6 MoM 3.2 0.2 YoY 17.1 19.3

Crude Oil
Crude Oil Unit $/bbl $/bbl Last 104.1 95.2

Nymex crude oil prices increased around 1.6 percent in the yesterdays trade; taking cues from shutdown of three pipelines by Enbridge Oil Corporation which ships crude oil from Canada to US. This created supply concerns and supported an upside in the oil prices. Crude oil prices touched an intra-day high of $95.59/bbl and closed at $95.20/bbl in yesterdays trading session. However, sharp upside in prices was capped on account of strength in the DX coupled with economic growth concerns from China which is world s second largest consumer of crude oil. On the domestic bourses, prices gained 1.6 percent as a result of depreciation in the Rupee. The commodity closed at Rs.5,702/bbl after touching a high of Rs.5,722/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 million barrels for the week ending on 21st June 2013. Gasoline stocks are expected to gain by 0.8 million barrels and distillate inventories are expected to shoot up by 1.3 million barrels for the same week. Outlook From the intra-day perspective, we expect crude oil prices to trade higher on the back of expectations of decline in API crude oil inventories. Further, shutdown in the three pipelines by Enbridge Oil Corporation will also support an upside in oil prices. However, strength in the DX coupled with weak global markets will cap sharp gain in prices. Also weak economic data in evening session from US can add downside pressure on prices. In the Indian markets, depreciation in the Rupee will act as a positive factor for oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude July13 $/bbl Rs/bbl valid for June 25, 2013 Support 94.0/93.10 5650/5600 Resistance 95.80/96.80 5760/5820

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

Prev. day -0.2 1.6

$/bbl

101.2

0.2

-4.1

-1.2

11.2

Rs/bbl

5702.0

1.6

0.4

9.3

26.0
Source: Reuters

Market Highlights - Natural Gas

(% change)

as on 24 June, 2013

Prev. day -1.7 -1.2

WoW -4.17 -0.31

MoM -11.34 -5.16

YoY 41.82 48.48

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Base Metals
Market Highlights - Base Metals (% change) The base metals pack traded on negative note in the yesterdays trade on the back of weak global markets coupled with strength in the DX. Additionally, economic growth concerns in China exerted downside pressure. Further, mixed LME inventories scenario acted as a negative factor. In the Indian markets, depreciation in the Rupee cushioned sharp downside in prices on the MCX.
Unit LME Copper (3 month) MCX Copper (June13) LME Aluminum (3 month) MCX Aluminum (June13) Rs /kg 103.8 -1.1 -1.6 1.9 -0.7 $/tonne 1770.0 -1.4 -4.3 -4.4 -5.2 Rs/kg 400.8 -1.6 -2.1 -1.9 -3.9 $/tonne Last 6705.5 Prev. day -2.0 as on 24 June, 2013 WoW -5.4 MoM -14.5 YoY -9.2

Copper
Copper prices fell 2 percent in the yesterdays trade on the back of sharp rise in LME copper inventories around 2 percent and stood at 678,225 tonnes. Further, growth concerns in China also exerted downside pressure on the prices. Additionally, weak global markets coupled with strength in the DX acted as a negative factor. The red metal touched an intra-day low of $6613/tonne and closed at $6705.50/tonne in yesterdays trading session. On the domestic front, prices fell 1.6 percent and closed at Rs. 400.80/kg, after touching an intra-day low of Rs.394.60/kg. Depreciation in the Rupee prevented fall in prices on the MCX. Outlook In todays session, we expect base metals prices to trade lower on the back of weak global markets. Further, strength in the DX acted as a negative factor for the prices. Additionally, forecast for unfavourable economic data from US in the evening session will add downside pressure on prices. In the Indian markets, depreciation in the Rupee will cushion sharp fall in prices. Technical Outlook
Unit MCX Copper June13 MCX Zinc June 13 MCX Lead June 13 MCX Aluminum June13 MCX Nickel June 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for June 25, 2013 Support 396/393 106.80/105.80 119.0/118.20 103.0/102.20 807/800 Resistance 403/405 108.0/108.80 120.50/121.50 104.50/105.20 824/833

LME Nickel (3 month) MCX Nickel (June13) LME Lead (3 month) MCX Lead (June13) LME Zinc (3 month) MCX Zinc (June13)

$/tonne

13660.0

-3.0

-3.9

-8.6

-16.8

Rs /kg

816.6

-2.5

-0.9

-1.7

-12.4

$/tonne

2005.0

-1.1

-5.0

-1.8

11.4

Rs /kg

119.8

-0.8

-1.8

5.4

17.2

$/tonne

1822.5

-1.5

-2.2

-1.6

0.8

Rs /kg

107.4

-0.9

0.8

5.3

4.4

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 24 June 678,225 5,440,325 186,198 1,065,850 195,875
th

21 June 664,850 5,433,950 185,412 1,071,425 199,025

st

Actual Change 13,375 6,375 786 -5,575 -3,150

(%) Change 2.0 0.1 0.4 -0.5 -1.6

Technical Chart LME Copper

Source: Telequote

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International Commodities
Important Events for Today
Indicator Inflation Report Hearings BBA Mortgage Approvals Core Durable Goods Orders m/m Durable Goods Orders m/m S&P/CS Composite-20 HPI y/y CB Consumer Confidence New Home Sales Country UK UK US US US US US Time (IST) 2:00pm 2:00pm 6:00pm 6:00pm 6:30pm 7:30pm 7:30pm Actual Forecast 33.1K -0.1% 3.0% 10.6% 75.6 462K Previous 32.2K 1.5% 3.5% 10.9% 76.2 454K Impact High Medium High Medium Medium High High

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