Commodities Daily Report

Tuesday| June 5, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Overview:

Research Team
Reena Walia Nair - Sr. Research Analyst reena.walia@angelbroking.com (022) 2921 2000 Extn. 6134 Anish Vyas - Research Associate anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Tuesday| June 5, 2012

International Commodities
Overview
US Dollar Index (DX) slipped below the 83-mark in yesterdays trade. European investor confidence at -28.9-level in May. LME markets closed today on the back of Queens Diamond Jubilee. US crude oil inventories expected to decline by 0.9 mn bbl Reuters.
$/Euro (Spot) 1.2495 0.5 -0.4 -4.3 -14.6 INR/$ (Spot) Last 55.65 Prev day -0.2 w-o-w -0.8 m-o-m -5.3 y-o-y -19.5

Market Highlights (% change)

as on 4 June, 2012

Ahead of the Group of Seven (G7) meeting today, Asian equities have witnessed a bounce back on hopes that policymakers might be able to chalk out a strategy to ease the debt crisis. This sentiment will help support domestic equities too, but risk to the downside still persists. US Factory Orders declined by 0.6 percent in April from previous decline of 2.1 percent a month ago. The US Dollar Index (DX) weakened on Monday as optimism over actions or measures by European policymakers came as a positive factor. US equities also closed in the positive territory and this factor too led investors away from the low-yielding dollar. The DX declined around 0.4 percent and slipped below the 83-mark and closed at 82.66 in yesterdays trading session. Sharp depreciation in the Rupee was capped on Monday as expectations of a rate cut by the Reserve bank of India (RBI) in its upcoming monetary policy review on June 18 helped ease sentiments in the domestic markets. The currency retreated from a one-week high as oil importers bought dollars. The Indian Rupee depreciated by 0.2 percent yesterday and closed at 55.65 after touching an intra-day low of 55.67 on Monday. For the current month, FII outflows totaled at Rs 773.10 crores till 4th June 2012. While on a year to date basis, net capital inflows stood at Rs th 41,721.30 crores till 4 June 2012.

Dollar Index

82.66

-0.4

0.2

3.7

12.0

NIFTY

4848.2

0.1

-2.8

-5.2

-12.1

SENSEX

15988.4

0.1

-2.6

-5.5

-13.0

DJIA

12101.5

-0.1

-2.8

-7.0

-0.4

S&P

1278.18

0.0

-3.0

-6.6

-1.7

Source: Reuters

The Euro closed in the positive territory against the dollar on Monday as optimism increased that the European leaders would be able to come out with a plan in order to save the crisis from worsening further. European Sentix Investor Confidence declined by 4.4 points to 28.9-level in last month from previous decline of 24.5-mark in April.

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Commodities Daily Report

Tuesday| June 5, 2012

International Commodities
Bullion
Gold
Spot gold prices declined by 0.6 percent yesterday on the back of rise in risk aversion in the global markets. However, further downfall in prices was cushioned on account of weakness in the dollar index. The yellow metal touched an intra-day low of $1609/oz and closed at $1616/oz in yesterdays trading session. On the MCX Gold August contract prices declined by 0.2 percent and closed at Rs.29,668/10 gms on Monday. However, further downside in gold prices was restricted on account on depreciation in the Indian Rupee. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix)** Comex (Jun12) MCX (Aug12)
st

as on 4 June, 2012 Prev day -0.6 2.9 WoW 2.8 2.4 MoM -1.3 2.6 YoY 4.9 33.9

Unit $/oz Rs/10 gms $/oz $/oz Rs /10 gms

Last 1616.4 29800.0

1606.0 1612.2 29668.0

3.1 -0.5 -0.2

2.0 2.8 2.4

-2.3 -1.6 2.5

4.3 4.6 32.3

Silver
Taking cues from fall in gold prices, Spot silver prices declined by more than 1.5 percent in yesterdays trading session. However, further downfall in silver prices was prevented on the back of weakness in DX. The white metal touched an intra-day low of $27.96/oz and closed at $28.20/oz yesterday. On the domestic front, prices declined by more than 1 percent and closed at Rs.53,839/kg after touching an intra-day low of Rs.53,759/kg on Monday. However, depreciation in the Rupee cushioned further fall in silver prices.

Source: Reuters

(** Prices as on 1 June as markets closed on eve of Queens Diamond Jubilee and Spring holiday)

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA)** Comex (Jul12) MCX (Jul12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last 28.2 54740.0 2738.0 2799.2 53839.0 Prev day -1.6 2.0 -2.6 -1.8 -1.1

as on 4 June, 2012 WoW -0.7 -0.2 -4.0 -1.3 -0.9 MoM -6.1 -2.4 -8.4 -6.9 -3.5 YoY -22.1 1.7 -22.2 -22.6 -1.3

Outlook
From an intra-day perspective we expect precious metals to trade on a positive note on the back of ease in risk aversion in the global markets coupled with expectations of stimulus from global policymakers to ease European debt concerns. Additionally, weakness in the DX will help upside in prices. However, in the domestic markets appreciation in the Rupee will cap sharp upside in prices. Technical Outlook
Unit Spot Gold MCX Gold Aug12 Spot Silver MCX Silver Jul12 $/oz Rs/10 gms $/oz Rs/kg valid for June 5, 2012 Support 1608.0/1598.0 29830/29743 28.18/27.90 53544/53249 Resistance 1627.80/1637.70 30057/30197 28.60/28.98 54350/54860

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Tuesday| June 5, 2012

International Commodities
Energy
Crude Oil
Crude Oil Unit $/bbl $/bbl Last 83.9 99.3

Market Highlights - Crude Oil (% change)

Prev. day 0.9 -4.1 WoW -7.4 -8.8

as on 4 June, 2012 MoM -14.2 -11.5 YoY -16.3 -14.4

Nymex crude oil prices gained around 1 percent yesterday, taking cues from expectations of decline in US crude oil inventories coupled with ease in risk sentiments in the global markets. Additionally, a weaker DX also acted as a positive factor for the commodity. Crude oil prices touched an intra-day high of $84.38/bbl and closed at $83.90/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.6 percent and closed at Rs.4,661/bbl after touching an intra-day high of Rs.4,675/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 0.9 million barrels for the week ending on 1st June 2012. Gasoline stocks are expected to increase by 1.4 million barrels and distillate inventories are expected to gain by 1.1 million barrels for the same week.

WTI (Spot) Brent (Spot)** Nymex Crude (July12) ICE Brent Crude (May12) MCX Crude (June12)

$/bbl

84.0

0.9

-7.6

-14.3

-16.2

$/bbl

98.9

0.4

-7.7

-12.6

-14.7

Rs/bbl

4661.0

0.6

-8.1

-10.2

3.7

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (June12) Unit $/mmbtu Rs/ mmbtu Last 2.435 134.2

(% change)

as on 4 June, 2012

Prev. day 4.51 2.36

WoW -4.51 -5.69

MoM 6.66 8.75

YoY -48.07 -37.08

Source: Reuters

Technical Chart Nymex Crude Oil

Outlook
We expect crude oil prices to trade higher today on the back of expectations of decline in US crude oil inventories along with expectations of stimulus package from the global policymakers to ease the debt crisis. Additionally, a weaker DX will also support upside in crude oil prices. However, appreciation in the Indian Rupee will cap further gains in prices. Technical Outlook
Unit valid for June 5, 2012
Source: Telequote

Support

Resistance

Technical Chart Nymex Natural Gas

NYMEX Crude Oil

$/bbl

83.20/82.10

85.25/86.40

MCX Crude June12

Rs/bbl

4620/4563

4716/4772

Source: Telequote

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Commodities Daily Report

Tuesday| June 5, 2012

International Commodities
Base Metals
The base metals pack traded on a negative note yesterday and less movement was seen in the in the Indian markets as the LME was closed yesterday on the back of Queens Diamond Jubilee holiday. However, further downside in prices of the domestic markets was cushioned on account of depreciation in the Indian Rupee. Copper Copper, the leader of the base metals complex traded on a mixed note in yesterdays trading session. Copper prices traded on flat note and bounced back from the intra-day low of Rs.397.10/kg on Monday. MCX Copper June contract touched an intra-day high of Rs.411.70/kg and closed at Rs.408.10/kg in yesterdays trade. Outlook In todays session we expect the base metals complex to witness a mildly bullish movement but will largely remain rangebound as the LME is closed on account of Queens Diamond Jubilee holiday today. In the domestic markets, sharp upside in prices will also be capped on account of appreciation in the Rupee. Technical Outlook
Unit MCX Copper June12 Rs /kg valid for June 5, 2012 Support 405.60/399.55 Resistance 414.10/420.20 Copper Aluminum MCX Zinc June12 Rs /kg 103.20/102.20 104.90/105.65 Nickel Zinc MCX Lead June12 Rs /kg 105.0/103.80 106.65/107.85 Lead

Market Highlights - Base Metals (% change)

Unit LME Copper (3 month)** MCX Copper (June12) LME Aluminum (3 month)** MCX Aluminum (June12) LME Nickel (3 month)** MCX Nickel (June12) LME Lead (3 month)** MCX Lead (June12) LME Zinc (3 month)** MCX Zinc (June12) Rs /kg 104.2 $/tonne 1887.3 Rs /kg 105.5 $/tonne 1903.0 Rs /kg 882.8 $/tonne 16075.0 Rs /kg 108.4 $/tonne 1972.0 Rs/kg 408.1 $/tonne Last 7340.0

as on 4 June, 2012 WoW -4.4 MoM -10.4 YoY -19.3

Prev. day -1.3

0.1

-4.2

-7.7

-0.4

-1.1

-2.7

-5.0

-25.3

-0.4

-1.5

-1.2

-8.0

-1.7

-5.4

-8.6

-29.6

-1.4

-5.9

-6.8

-14.3

-1.1

-2.0

-9.6

-22.0

-0.4

-1.7

-6.2

-4.4

0.3

-1.1

-5.6

-16.9

-0.4

-1.0

-2.5

2.6

Source: Reuters

LME Inventories
Unit tonnes tonnes tonnes tonnes tonnes 1 June 230,875 4,917,200 107,826 939,250 348,175
st

31 May 230,675 4,918,925 107,106 940,775 349,575

st

Actual Change 200 -1,725 720 -1,525 -1,400

(%) Change 0.1 0.0 0.7 -0.2 -0.4

Source: Reuters

MCX Aluminum June12

Rs /kg

107.90/107.15

109.20/110.0

Technical Chart MCX Copper

MCX Nickel June12

Rs /kg

863.30/843.80

900.0/917.0

Source: Telequote

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Commodities Daily Report

Tuesday| June 5, 2012

International Commodities
Important Events for Today

Indicator Bank Holiday Retail Sales m/m German Factory Orders m/m ISM Non-Manufacturing PMI G7 Meetings

Country UK Euro Euro US All

Time (IST) All Day 2:30pm 3:30pm 7:30pm All Day

Actual -

Forecast -0.1% -0.9% 53.7 -

Previous 0.3% 2.2% 53.5 -

Impact Medium Medium High High

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