Commodities Daily Report

Monday| August 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

International Commodities
Overview
Spot Gold and Spot Silver prices trade higher on stimulus expectations. WTI trades mixed as US economic data weighs on prices. Copper prices slip below $7000/tonne today. Asian equities are trading on a mixed note today but over the trade we expect sentiments to improve as major economic indicators today are likely to come on the positive side. While US jobs data missed market expectations, the fall in unemployment rate to 7.4 percent in July13 is a positive indicator and is also a point which could draw the Federal Reserve closer to the winding of its stimulus program. US Non-Farm Farm Employment Change grew at slow pace of 162, 162,000 in July as against a rise of 188,000 in June. Unemployment Rate fell to 7.4 percent in July from rise of 7.6 percent in June. Personal Income was at 0.3 percent in June when compared to 0.4 percent a month earlier. Personal Spending rose by 0.5 perce percent in June from 0.2 percent in prior month. Factory Orders grew at slow pace of 1.5 percent in June with respect to rise of 3 percent in previous month. Chinas Non-Manufacturing Manufacturing Purchasing Managers' Index (PMI) rose by 0.2 points to 54.1-mark in July as against a rise of 53.9 53.9-level a month ago. The US Dollar Index (DX) increased around 0.3 percent last week on the back of favorable economic data which showed signs of economic growth, thereby leading to expectations that the Fed will pullback its stimulus measures. However, rise in risk appetite in global market sentiments capped sharp gains in the currency. The DX touched a weekly high of 82.61 and closed at 81.978 on Friday. On a weekly basis, the Indian Rupee depreciated around 3.5 percent. The currency depreciated on the back of worries that central bank measures may not be sufficient to control volatility in the currency. Further, DX strength and weak domestic markets exerted pressure. The Reserve Bank of India (RBI) tightened rules to defend weakness in the Rupee by announcing that foreign institutional investors will require a mandate from promissory note holders to hedge on their behalf. The Rupee touched a weekly low of 61.185 and closed at 61.09 on Fri Friday. For the month of August 2013, FII inflows totaled at Rs.458.20 crores nd ($78.26 million) as on 2 August 2013. Year to date basis, net capital 2nd inflows stood at Rs.66,550.60 crores ($12,561million) till August 2013. Trend in the Rupee is expected ed to be largely bearish as domestic fundamentals remain weak and point towards depreciation in the currency. However, sharp losses in the Rupee could be prevented due to Dollar Weakness. www.angelcommodities.com

Market Highlights (% change)

as on 2 August, 2013 w-o-w -3.5 m-o-m -1.5 y-o-y -8.7

$/Euro (Spot)

1.3281

0.6

0.0

2.1

7.2

Dollar Index NIFTY

81.98

-0.5 0.5

0.3

-3.2

3.2

5677.9

-0.9 0.9

-3.5

-1.6

8.6

SENSEX

19164.0

-0.8 0.8

-3.0

-0.1

4.8

DJIA

15658.4

0.2

0.6

2.8

21.6

S&P

61.09

-0.9 0.9

-3.5

-1.5

-8.7

Source: Reuters

The Euro traded on a flat note and gained marginally in the last week on the back of upbeat global markets coupled with favorable economic data from the region. However, sharp upside in the currency was capped on account of strength in the DX. The Euro touched a weekly high of 1.3344 and closed at 1.3281 against the dollar on Friday. Friday Spanish Unemployment Change declined by 64,900 in July from earlier fall of 127,200 a month ago. The Euro is expected to trade on a positive note to expected upbeat economic data from the Euro Zone today. While retail sales in the Euro Zone are expected to show a fall, the services PMI of Spain and Italy is expected to show a rise. Euro Zone investor confidence is also expected to improve and this factor will support gains in the currency. urrency.

Commodities Daily Report

International Commodities
Bullion Gold
Spot gold prices declined around 1.6 percent in the last week on the back of sharp rise in the DX. Further, declining trend in SPDR gold holdings to 918.64 tonnes, marking the lowest level since February 2009 exerted downside pressure on prices. However, upbeat global markets cushioned sharp fall in the prices. The yellow metal touched a weekly low of $1282.69/oz /oz and closed at $1311.50/oz in the last trading session of the week. In the Indian markets, prices traded on a positive note and gained around 4 percent on account of depreciation preciation in the Rupee and closed at Rs.28,068/10 gms on Friday after touching a high of Rs.29,010/10 gms in the last week. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1311.5 Prev. day 0.2 as on 2 August, 2013 WoW -1.6 MoM 4.8 YoY -18.2

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

Rs/10 gms $/oz

27450.0

-2.8

-0.2

18.0

-7.9

1309.3

-0.4

-1.6

4.7

-18.3

$/oz

1310.6

0.0

-1.3

5.2

-17.4

Rs /10 gms

28486.0

0.9

3.9

8.3

-4.0

Silver
Taking cues from fall in gold prices along with strength in the DX, Spot silver prices declined around 0.3 percent in the last week week. However, sharp downside in prices was cushioned on account of positive movement in base metals complex. . The white metal touched a weekly low of $19.19/oz and closed at $19.90 in last trade of the week week. On the domestic front, prices rose around 3.1 percent on account of depreciation in the Rupee and closed at Rs.42,034/kg /kg on Friday after touching a high of Rs.42,600/kg in the prior week. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Sept13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 19.9 41820.0 Prev day 1.6 -0.1

Source: Reuters

as on 2 August, 2013 WoW -0.3 0.3 MoM 1.1 -0.9 YoY -28.3 -20.8

$/oz $/ oz

1946.0 19.6

-1.3 0.0

-2.8 -0.8

-0.5 3.1

-28.6 -27.3

Outlook
In the Indian markets, depreciation in the Rupee today is expected to support gains in the precious metals space today. Trend in the international markets is expected to remain up today as although the US unemployment rate has slipped, the number of job cr creation in the last month has been slower. Hence, expectations of continuation of the Feds stimulus until further stabilization of economic data will support gains in the international prices. Technical Outlook
Unit Spot Gold MCX Gold Oct13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for August 5, 2013 Support 1310/1302 27950/27780 19.70/19.50 41500/41200 Resistance 1322/1328 28200/28320 20.10/20.40

Rs / kg

42034.0

1.5

3.1

2.5

-21.2

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

42400/42900

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Commodities Daily Report

International Commodities
Energy Crude Oil
Nymex crude oil prices rose by more than 2 percent in the last week taking cues from favorable manufacturing data from across the globe that led to expectations of rise in demand for the fuel. Further, decline in US jobless claims and unemployment rate data also supported an upside in prices. Additionally, supply concerns from Libya as a result of shutdown in oil export terminals after labor protests acted as a positive factor for prices. Crude oil prices touched a weekly high of $108 8.82/bbl and closed at $106.94/oz in last trading session of the week. On the domestic bourses, MCX crude August contract gained around 5 percent as a result of depreciation in Rupee and crude oil prices touched a weekly high of Rs.6,637/bbl /bbl and closed at Rs.6, Rs.6,521/bbl on Friday. Market Highlights - Crude Oil (% change)
Crude Oil Brent (Spot) Nymex Crude (Sep 13) ICE Brent Crude (Sep13) MCX Crude (Aug 13) Unit $/bbl $/bbl Last 110.7 106.9 Prev. day -0.3 -0.9 WoW 1.9 2.1 as on 2 August, 2013 MoM 4.0 3.7 YoY 0.3 22.7

$/bbl

109.0

-0.5

1.7

3.0

0.0

Rs/bbl

6521.0

-0.5

5.0

6.7

28.6

Source: Reuters

Market Highlights - Natural Gas (% change)

as on 2 August, 2013 MoM 3.651 218.6 YoY 2.917 167.5

WoW 3.56 210.2

Natural Gas
Weak fundamentals on the back of sharp increase in inventories coupled with expectations of slow growth in demand due to weather changes led to sharp decline in natural gas prices last week. Prices on the Nymex slipped more than 6 percent and closed the last week at $3.33/mmbtu. In the Indian markets, sharp fall in prices was cushioned on account of Rupee depreciation. The near-month month contract on the MCX decline declined around 4 percent last week to close at Rs204.60/mmbtu. Over the week, downside pressure in prices is likely due to weak fundamentals. Outlook Slight downside in crude oil prices could be seen as news indicates that Libya has resumed exports from an export port terminal. Additionally, mixed economic data on the jobs front from the US has led to uncertainty in the global markets and this factor too will keep a check on rise in oil prices today. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Aug13 $/bbl Rs/bbl valid for August 5, 2013 Support 106.20/105.40 6480/6430 Resistance 107.70/108.50 6570/6620

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

International Commodities
Base Metals
The base metals complex traded on a positive note in the last week as a result of favorable economic data from major global economies economies. Further, upbeat global markets along with decline in LME inventories scenario supported an upside in prices. However, sharp upside in prices was capped as a result of surge in the DX. In the Indian markets, depreciation in the Rupee supported positive movement in prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Aug13) LME Aluminum (3 month) $/tonne Rs/kg $/tonne Last as on 2 August, 2013 WoW MoM YoY

Prev. day

7007.0 428.5 1814.0 109.4 13976.0 852.2 2114.0 129.1 1867.5

0.2 0.7 0.4 0.9 0.6 0.7 0.2 0.7 0.7

2.2 4.9 0.9 5.1 1.0 4.5 2.9 6.6 1.0

-10.7 0.6 0.2 1.4 0.8 1.7 1.5 2.9 -0.4

-5.6 3.6 -2.4 6.2 -10.4 -2.5 11.9 22.7 1.5

Copper
A positive trend was seen in copper prices last week, with prices on the LME rising more than 2 percent. The red metal touched a high of $7079/in the last week but prices could not sustain around these levels as uncertain sentiments continue. Firstly, stly, the concern on the Chinese economic front remains and secondly there is mixed sentiment with respect to the Feds decision on stimulus. In the Indian markets, prices of copper on the MCX rose sharply higher with gains more than that in the international markets on account of a weaker Rupee. The near-month month copper contract on the MCX gained around 5 percent and closed at Rs428.50/kg. Outlook Economic data from the Euro Zone and the US is expected to come on the positive side. While base metals are currently trading in the negative territory, we expect a bounce back in prices in late trade on the back of positive economic indicators. Technical Outlook
Unit MCX Copper Aug13 MCX Zinc Aug 13 MCX Lead Aug 13 MCX Aluminum Aug13 MCX Nickel Aug 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for August 5, 201 2013 Support 425/421 112/111 128/127 108.50/107.50 843/835 Resistance 431/435 114/115 130/131 110/111 857/865

MCX Aluminum (Aug13) LME Nickel (3 month) MCX Nickel (Aug13) LME Lead (3 month) MCX Lead (Aug13) LME Zinc (3 month) MCX Zinc (Aug13)

Rs /kg

$/tonne

Rs /kg

$/tonne

Rs /kg

$/tonne

Rs /kg

113.2

1.2

5.0

0.9

10.5

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 2nd August 1st August Actual Change (%) Change

608,675 5,472,375 204,336 1,041,400 200,125

610,725 5,471,100 204,330 1,045,400 200,225

-2,050 1,275 6 -4,000 -100

-0.3 0.0 0.0 -0.4 0.0

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

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

Halifax HPI m/m Spanish Services PMI Italian Services PMI Services PMI Retail Sales m/m ISM Non-Manufacturing PMI

UK Euro Euro UK Euro US

5 -7

th

th

0.3% 48.4 46.6 57.4 -0.6% 53.2

0.6% 47.8 45.8 56.9 1% 52.2

Medium Medium Medium High Medium High

12:45pm 1:15pm 2:00pm 2:30pm 7:30pm

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