Commodities Daily Report

Wednesday| November 15, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Overview:

Research Team
Nalini Rao - Sr. Research Analyst [email protected] (022) 2921 2000 Extn. 6135 Anish Vyas - Research Analyst [email protected] (022) 2921 2000 Extn. 6104

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Commodities Daily Report

International Commodities
Overview
UKs Claimant Count Change increased by 10,100 in October. The US Retail sales fell 0.3 percent in last month. US Price Index (PPI) declined 0.2 percent in October. Asian markets are trading on a mixed note as US fiscal cliff issues are creating worries amongst market participants over expectation of slowdown in the global economy. While speculation of a possible change in the government in Japan which might result into further stimulus measures to revive their economy is supporting the sentiments. UKs Claimant Count Change increased by 10,100 in October as against a previous decline of 800 in September. The jobless rate dipped to 7.8 percent, compared with forecasts for a reading of 7.9 percent. The US Retail sales fell 0.3 percent in October as against an increase of 1.3 percent in the month of September. The data was broadly influenced by the super storm Sandy resulting in the shutdown of malls and auto showrooms. The US Producer Price Index (PPI) declined 0.2 percent in October as compared to an increase of 1.1 percent in September as result of fall in the energy and vehicle costs. The US Dollar Index (DX) swung between gains and losses and settled on a flat note in yesterdays trading session. Rise in the risk aversion was witnessed as US fiscal issues created bearish market sentiments and weak economic data from the US economy increased demand for the low yielding currency. However, towards the end of the session risk appetite of the investors increased as Federal Reserve Open Market Committee minutes stated that more stimulus measures might be required to boost the economy. US equities settled on a bearish note on the back of worries that the new government in US may not be able to avoid fiscal cliff issues. It touched an intra-day high of 81.22 and closed at 81.10 in yesterdays trade. Indian Rupee depreciated 0.2 percent on the back of risk aversion amongst market participants and concerns of widening current account deficit and demand for dollars. Additionally, weak Index of Industrial Production of India also resulted in the depreciation of the Indian rupee. Rupee touched an intra-day low of 55.03 and closed at 55.0 on Monday. For the current month FII inflows totaled at Rs. 2,859.0 crores till 8th November 2012. While year to date basis, net capital inflows stood at Rs. 96,553.90 crores till 8th November 2012.

Market Highlights (% change)

as on 14 November, 2012

w-o-w
0.0

m-o-m
-1.1

y-o-y
-4.5

$/Euro (Spot)

1.2734

0.3

-0.6

-1.5

Dollar Index

81.10

0.0

0.5

1.6

NIFTY

5667.0

-0.3

-0.7

0.3

SENSEX

18618.9

-0.3

-0.8

-0.1

DJIA

12571.0

-1.5

-5.1

-5.7

S&P

1355.5

-1.4

-2.8

-5.1

Source: Reuters

The Euro swung between gains and losses and ended on 0.3 percent higher due to weakness in the DX in most part of the trading session. However, sharp gains in the currency were capped due to unfavorable data from the regions. The currency touched an intra-day high of 1.2777 and closed at 1.2734 on Thursday.

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International Commodities
Bullion Gold
Spot gold prices gained 0.1 percent on the account of rise in the oil prices and weakness in the US Dollar Index towards the end of the session. The fresh tensions in the Middle East and the worries about the US fiscal cliff are supporting the Gold prices upwards. However, worries of the Euro zone debt crisis capped sharp gains. The yellow metal touched an intra-day high of $1,733/oz and closed at $1,726.2 on Wednesday. On the MCX, Gold October contract gained 0.1 percent taking cues from firmness in the spot gold prices. Gold prices on the MCX closed at Rs.31,746/10 gms after touching an intraday high of Rs. 31,775/ 10gms in yesterdays session. . 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
1729.5 0.3 0.9 -2.2 -2.7 N/A N/A N/A N/A N/A

as on 14 November, 2012 Prev day

Last
1726.1

WoW
0.6

MoM
-2.4

YoY
-3.1

1725.8

0.0

2.1

-2.4

-2.8

$/oz Rs /10 gms

Silver
Spot silver prices traced spot gold prices and ended 0.6 percent higher on Wednesday. Weakness in the DX in the later part of the trade supported an upside in the silver prices. However, sharp gains in the silver prices were capped on account of weakness in the base metals pack. The white metal touched an intra-day high of $32.91/oz and closed at $32.7/oz on Wednesday. In the Indian markets, MCX silver prices gained 0.9 percent and closed at Rs. 61,375/kg after touching an intraday high of Rs.61,450/kg in yesterdays session. Prices in the domestic markets gained taking cues from strength in the spot silver prices.

Source: Reuters

Market Highlights - Silver (% change)

as on13 November, 2012 WoW

Last
32.7

Prev day
0.6

MoM
-3.9

YoY
-4.7

N/A 3.4

N/A -5.2

N/A -5.5

2.7

-3.5

-3.4

Outlook
In todays session we expect precious metals to trade on a firm note due to mixed global market sentiments and DX. However, Euro zone debt concerns are expected to cap sharp gains in the precious metals. In the domestic markets, depreciation in the Rupee is expected to support an upside in the precious metals. Technical Outlook
Unit Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for November 15, 2012 Support 1718/1712 31620/31500 32.35/32.19 60900/60600 Resistance 1731/1736 31850/31950 32.77/32.93 61700/62000

$/ oz
61375.0 0.9 2.4 -0.7 7.3

Rs / kg
Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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International Commodities
Energy Crude Oil
Nymex crude oil prices erased earlier losses of the previous day owing to renewed tensions in the Middle East. Additionally, weakness in the DX in later part of trade also supported an upside in the crude oil prices. Crude oil prices touched an intra-day high of $86.65/bbl and closed at $86.32/bbl on Wednesday. On the domestic bourses, prices gained 1.28 percent and closed at Rs.4,740/bbl after touching a high of Rs.4,754/bbl in yesterdays session. Israel carried out strikes in the Gaza strip that killed leader of the Hamas militant wing raising concerns of disruption in oil supplies. EIA Forecast According to EIA forecast crude inventories were seen up 1.9 million barrels for the week that ended Nov. 9, after Sandy disrupted refinery, pipeline and shipping operations. The report is due on Thursday, which was delayed by a day due to the Veterans Day holiday. (Reuters). According to the data released yesterday by American Petroleum Institute, crude oil inventories rose by 1.3 million barrels for the week to Nov. 9. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Dec12) ICE Brent Crude (Dec12) MCX Crude (Nov12) Unit $/bbl $/bbl Last
86.3 110.7 86.3

as on 14 November, 2012 WoW

Prev. day
1.1 0.8 1.1

MoM
-6.4 -5.1 -6.2

YoY
-12.0 -2.5 -12.0

$/bbl
109.6 1.2 -1.3 -5.3 -2.0

$/bbl
4740.0 1.3 -1.1 -2.4 -3.6

Rs/bbl
Source: Reuters

Market Highlights - Natural Gas (% change)

as on 14 November, 2012
Source: Reuters

Technical Chart Nymex Crude Oil

Outlook In the intra-day, we expect crude oil prices to trade on a positive note due to renewed tensions in the Middle East hurting the supplies of the same. Additionally, mixed movement in the DX is also expected to support an upside in the crude oil prices. In the domestic markets crude oil prices are expected to trade on a firm note taking cues from the international market along with depreciation in the Indian rupee. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Nov 12 $/bbl Rs/bbl valid for November 15, 2012 Support 84.83/85.56 4660/4700 Resistance 86.84/87.56 4770/4810

Source: Telequote

Technical Chart Nymex Natural Gas

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Commodities Daily Report

International Commodities
Base Metals
The base metal pack traded on a mixed note on the account of signs of deepening Euro zone crisis and on the concerns of the US cliff which may hinder the recovery of the US economy. However, decline in LME inventories in most of the metals cushioned sharp fall in the prices. In the Indian markets weak industrial output data pressurised the base metal prices on MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum $/tonne
1968.0 -0.5 2.0 -2.5 -9.1

as on 14 November, 2012 WoW

Last
7617.5

Prev. day
-0.6

MoM
-7.4

YoY
-1.3

$/tonne

Rs/kg

419.7

0.2

-0.6

-4.2

7.9

Copper
Copper, the leader of the base metals complex declined 0.6 percent yesterday on the back of concerns about the US cliff and renewed concerns worries on the European debt crisis. This is expected to reduce the demand from the main consuming nations. However, decline in the LME Copper inventories by 0.1 percent which stood at 245,175 tonnes cushioned sharp fall in the copper prices in yesterdays session. The red metal closed at $7,617/tonne after touching a low of $7,613 per tonne in yesterdays trading session. Outlook From the intraday perspective, base metal prices are expected to trade on a weak note due to mixed global market sentiments and DX. Additionally weak data from the US economy is also indicating that the economy is growing on a slower note. This is likely to result in weak demand. In the domestic markets weak industrial output might exert downside pressure on the base metals pack. However, depreciation in the Indian rupee is expected to cushion sharp fall in the prices. 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 15, 2012 Support 417/414 104.8/104 119.2/118.4 107/106.3 883/876 Resistance 421/424 1062/107 120.8/121.5 108.4/109.2 894/904

(3 month) MCX Aluminum (Nov12) LME Nickel (3 month) MCX Nickel (Nov12) LME Lead (3 month) MCX Lead (Nov12) LME Zinc (3 month) MCX Zinc (Nov12)
Source: Reuters

Rs /kg

107.7

0.1

3.0

1.8

-0.5

$/tonne

16171.0

0.8

-0.1

-8.5

-8.4

Rs /kg

887.4

0.7

0.7

-4.8

-1.4

$/tonne

2168.8

1.1

-0.2

-0.7

6.4

Rs /kg

120.0

1.1

1.0

4.4

18.1

$/tonne

1935.8

0.3

1.8

-1.7

-0.5

Rs /kg

105.5

1.4

2.9

2.8

7.7

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 12th November 254175 5095100 133602 1154700 326875 9th November 254350 5101625 133104 1155350 327950 Actual Change -175 +6525 498 -650 -1075 (%) Change -0.1 -0.1 0.4 -0.1 -0.3
Source: Reuters

Technical Chart MCX Copper

Source: Telequote

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International Commodities
Important Events for Today
Indicator FOMC Meeting Minutes FOMC Member Williams Speaks French Prelim GDP q/q German Prelim GDP q/q Italian Prelim GDP q/q Retail Sales m/m CPI y/y Core CPI y/y Flash GDP q/q Core CPI m/m Unemployment Claims CPI m/m Empire State Manufacturing Index FOMC Member Lacker Speaks Philly Fed Manufacturing Index Mortgage Delinquencies Natural Gas Storage Crude Oil Inventories Fed Chairman Bernanke Speaks Country US US EU EU EU GBP EU EU EU US US US US US US US US US US Time (IST) 12:30am 7:15am 12:00p.m 12:30pm 2:30pm 3:00pm 3:30pm 3:30pm 3:30pm 7:00pm 7:00pm 7:00pm 7:00pm 7:30pm 8:30pm 8:30pm 9:00pm 9:30pm 11:50pm -13B 2.5M 1.1 5.7 7.58% 21B 1.8M 0.0% 0.1% -0.4% -0.1% 2.5% 1.5% -0.2% 0.1% 372K 0.1% -7.2 0.0% 0.3% -0.8% 0.6% 2.5% 1.5% -0.2% 0.1% 355K 0.6% -6.2 Actual Forecast Previous Impact High Medium Medium Medium Medium High Medium Medium Medium High High Medium Medium Medium High Medium Low Medium High

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