Commodities Daily Report

Friday| August 30, 30 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

Friday| August 30, 30 2013

Overview

International Commodities
US Prelim GDP rose by 2.5 percent in second quarter of 2013. German Unemployment Change rose to 7,000 in month of July. US Unemployment Claims declined to 331,000 for w/e on 23rd August. Japans Prelim Industrial Production rose by 3.2 percent in last month month.

Market Highlights (% change)

Last INR/$ (Spot) Prev day

as on 29 August, 2013 w-o-w m-o-m y-o-y

66.55

3.3

-3.1

-9.5

-16.3

Asian markets are trading on a mixed note today after UK Parliament has voted against the military action to be taken n on Syria. While on the other hand, US GDP grew more than estimated showing signs of progress in the economy. US Prelim Gross Domestic Product (GDP) rose by 2.5 percent in Q2 of 2013 as against a rise of 1.7 percent in Q1 of 2013. Unemployment rd Claims declined lined by 6,000 to 331,000 for week ending on 23 August from rise of 337,000 in prior week. Prelim GDP Price Index gained by 0.8 percent in second quarter of 2013 with respect to 0.7 percent in first quarter of 2013. The US Dollar Index (DX) gained around d 0.7 percent in yesterdays trading session on the back of more than expected rise in the US GDP data which led to concerns of QE tapering from the Federal Reserve. However, sharp upside in the currency was capped as a result of rise in risk appetite in global market sentiments in later part of the trade. Additionally, increase in initial jobless claims data of the US restricted sharp gains in the DX. The currency touched an intra intra-day high of 82.27 and closed at 82.0 on Thursday. The Indian Rupee appreciated iated more than 3 percent in yesterdays trading session. The currency appreciated on the back of measures taken by Reserve Bank of India (RBI) of creating swap window for OMCs. Further, upbeat domestic market sentiments and weakness in the DX in early par part of the trade supported an upside in the currency. Additionally, expectations that central bank will come up with plan of buying gold from citizens acted as a positive factor. However, sharp upside in the currency was capped as a result of outflow of foreign oreign funds from equities and debt along with forecast for decline in countrys Gross Domestic Product (GDP) data on Friday. The currency touched an intra-day day high of 66.51 and closed at 66.55 on Thursday. For the month of August 2013, FII outflows totaled at Rs.6001.90 crores th ($914.23 million) as on 29 August 2013. Year to date basis, net capital th inflows stood at Rs.60,090.50 crores ($11,571.5 million) till 29 August 2013. Japans Manufacturing Purchasing ing Managers' Index (PMI) rose by 1.5 points to 52.2-mark mark in August as against a rise of 50.7 50.7-level in July. Household Spending gained by 0.1 percent in July from fall of 0.4 percent a month ago. National Core Consumer Price Index (CPI) rose to 0.7 percent in August as compared to 0.4 percent in July. Tokyo Core CPI was at 0.4 percent in current month with respect to 0.3 percent in July. Prelim Industrial Production rose by 3.2 percent in July from decline of 3.1 percent in prior month.

$/Euro (Spot)

1.324

-0.7 0.7

-0.9

-0.2

5.7

Dollar Index NIFTY

82.00

0.7

0.6

-0.5

3.2

5409.1

2.3

-6.0

-6.0

1.4

SENSEX

18401.0

2.2

-4.9

-4.9

0.6

DJIA

14841.0

0.1

-0.8

-5.2

13.2

S&P

1638.2

0.2

-2.8

-2.8

16.1

Source: Reuters

The Euro declined around 0.7 percent in the yesterdays trade taking cues from strength in the DX. Further, rise in the German unemployment data exerted downside pressure on the currency However, downside movement in the currency was cushioned on account of upbeat global market sentiments. The Euro touched an intra-day day low of 1.3218 and closed at 1.324 on Thursday. German Unemployment Change rose to 7,000 in July as against a decline of 7,000 in June. European Retail Raw Materials Price Index (RMPI) gained by 0.8 points to 50.3-mark 50.3 in August from 49.5-level in July. UKs GfK Consumer Confidence was at -13-mark in August as against -16-level level in the month of July. July

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Commodities Daily Report

Friday| August 30, 30 2013

International Commodities
Bullion Gold
Spot gold prices declined around 0.7 percent in the yesterdays trade on the back of strength in the DX. However, rising trend in the SPDR gold holdings which was at 921.03 tonnes coupled with upbeat global market sentiments cushioned sharp fall in prices. The yellow metal touched an intra-day day low of $1402.56/oz and closed at $1407.64/oz in the yesterdays trade. In the Indian markets, prices traded on a positive note by 0.7 percent and closed at Rs.33,650/10 gms after touching a high of Rs.33,862/10 gms on Thursday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1407.6 Prev. day -0.7 as on 29 August, 2013 WoW 2.4 MoM 6.1 YoY -15.0

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

Rs/10 gms $/oz

33000.0

-3.6

15.8

15.8

10.7

1407.8

-0.8

2.3

6.3

-15.2

$/oz

1419.0

-0.1

3.5

8.3

-14.9

Silver
Taking cues from fall in gold prices along with downside in base metals complex, Spot silver prices fell by more than 2 percent in the yesterdays trade. Additionally, strength in the DX added downside pressure in prices. The white metal touched an intra intra-day low of $23.65/oz and closed at $23.83 in yesterdays trading session. On the domestic front, prices fell around 0.4 percent and closed at Rs.55,542/kg after touching a low of Rs.54,270/kg on Thursday Thursday.

Rs /10 gms

33405.0

0.0

7.3

16.4

8.3

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Sept13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 23.8 56100.0 Prev day -2.1 -4.8

as on 29 August, 2013 WoW 3.1 34.1 MoM 20.9 34.1 YoY -22.3 2.6

$/oz $/ oz

2411.0 24.1

-2.5 -1.2

4.5 1.5

22.5 22.2

-21.5 -20.7

Outlook
In the Indian markets, Rupee depreciation preciation is expected to support upside in gold and silver prices both. In the international markets, gold prices are expected to rise on the back of weakness in the DX. Additionally, rising trend in SPDR gold holdings will act as a positive factor. However, sharp upside in prices will be capped as a result of mixed global market sentiments on account of UKs Parliament voting against military attack on Syria has provided relief to markets but positive GDP data from the US showing signs of progress in yesterdays trade has increased concerns of QE tapering from the Federal Reserve. Technical Outlook
Unit Spot Gold MCX Gold Oct13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for August 30, 2013 Support 1400/1389 33450/33200 23.70/23.40 55000/54400 Resistance 1414/1421 33800/33950 24.05/24.30 55900/56300

Rs / kg

55542.0

-0.4

8.5

33.3

-3.5

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Friday| August 30, 30 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices fell around 1.2 percent in the yesterdays trading session after UKs Parliament voted against military attacks on Syria. Additionally, more than estimated rise in US GDP data increased concerns of QE tapering which exerted downside pressure on prices. Further, stronger DX acted as a negative factor. Crude oil prices touched an intra-day day low of $107.72/bbl and closed at $108.80/oz in yesterdays trading session. On the domestic bourses, MCX crude September contract rose around 1.4 percent and crude oil prices touched an intra intra-day high of Rs.7,511/bbl and closed at Rs.7,457/bbl on Thursday. 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 118.9 108.8 Prev. day 0.5 -1.2 WoW 5.7 3.6 as on 29 August, 2013 MoM 9.5 1.7 YoY 4.9 13.9

$/bbl

115.2

-1.2

4.8

7.7

2.3

Rs/bbl

7450.0

1.4

10.7

18.5

40.2

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Aug 13) Unit $/mmbtu Rs/ mmbtu Last 3.621 244 Prev. day 1.3 2.3

as on 29 August, 2013 MoM 4.26 17.20 YoY 34.56 62.23

Source: Reuters

WoW 2.14 7.21

Natural Gas
EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory increased by 67 billion cubic feet (bcf) which stood at 3.13 trillion cubic feet for the week ending on 23rd August 2013. Outlook day perspective, we expect crude oil prices to trade From the intra-day lower on the back of ease of attacks on Syria after UKs Parliament voted against the military attack. Further, favorable GDP data from US in yesterdays trade increased the concerns of QE tapering from the Federal Reserve will exert rt downside pressure on prices. Additionally, rise in API and US crude oil inventories in this week coupled with forecast of Saudi Arabia to maintain production at 10 million bbl per day will act as a negative factor. However, sharp downside in prices will be cushioned on account of weakness in the DX. , depreciation in the Rupee will prevent sharp fall In the Indian markets, in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Aug13 $/bbl Rs/bbl valid for August 30, 2013 Support 108.45/107.40 7390/7320 Resistance 110.10/110.90 7500/7560

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Friday| August 30, 30 2013

International Commodities
Base Metals
The base metals pack on the LME traded on a negative note in the yesterdays trading session due to unfavorable economic data from the Euro Zone along with strength in the DX. Positive GDP data from the US, which lead to strengthen the case for tapering stimulus, added downside pressure. However sharp downside was cushioned due to optimistic market sentiments and favorable unemployment data from the US along with decline in LME inventories apart from Copper and lead. In the Indian markets, appreciation in the Rupee capped sharp gains in prices in the yesterdays trade. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Aug13) LME Aluminum (3 month) MCX Aluminum (Aug13) LME Nickel $/tonne 14105.0 -0.8 -2.1 3.8 -13.5 Rs /kg 121.9 1.0 3.0 15.5 17.0 $/tonne 1836.3 -1.5 -2.4 3.2 -2.9 Rs/kg 486.9 0.6 3.5 18.4 15.2 $/tonne Last 7161.5 as on 29 August, 2013 WoW -1.8 MoM -8.7 YoY -5.5

Prev. day -1.4

Copper
LME Copper prices declined around 1.4 percent yesterday on the back of rise in unemployment data from Germany. Strength in the DX exerted downside pressure on prices. Further, rise in GDP data from US increased concerns of QE tapering from the Federal Reserve acted as a negative factor. Additionally, gain in inventories by 0.5 percent which stood at 577,675 tonnes added to the downside pressure. The red metal touched an intraday low of $7147/tonne and closed at $7161.5/tonne yesterday. On the MCX, the near-month month copper contract gained 0.6 percent yesterday. The metal touched an intraday high of Rs.495.3/kg and closed at Rs.486.90/kg on Thursday. Outlook

(3 month) MCX Nickel (Aug13) LME Lead (3 month) MCX Lead (Aug13) LME Zinc (3 month) MCX Zinc (Aug13)
Source: Reuters

Rs /kg

950.8

1.0

3.0

15.6

5.2

$/tonne

2195.0

-0.9

-0.6

8.1

11.7

Rs /kg

149.0

1.6

5.9

20.9

36.4

$/tonne

1935.0

-1.1

-1.8

5.5

4.4

Rs /kg

128.9

0.8

3.9

17.5

26.2

LME Inventories
Unit Copper tonnes tonnes tonnes tonnes tonnes 29th August 577,675 5,407,050 212,220 1,010,400 186,200 28th August 574,825 5,412,975 212,328 1,014,825 185,950 Actual Change 2,850 -5,925 -108 -4,425 250 (%) Change 0.5 -0.1 -0.1 -0.4 0.1
Source: Reuters

In todays session, we expect base metals prices to trade on a positive note on the back of weakness in the DX. Rise in Japans industrial production data along with estimates of increase in US consumer sentiments data in the evening session will support an upside in prices. However, sharp upside in prices will be capped as a result of mixed ixed global market sentiments on account of UKs Parliament voting against military attack on Syria has provided relief to markets but positive GDP data from the US showing signs of progress in yesterdays trade has increased concerns of QE tapering from the he Federal Reserve. In the Indian markets, depreciation in the Rupee will support an upside in prices on the MCX. 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 30, 2013 Support 482/476 127.50/126.50 148.00/147.00 120.50/119.50 943/935 Resistance 490/494 130.00/131.30 150.00/151.00 123.00/124.20 958/967

Aluminum Nickel Zinc Lead

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| August 30, 30 2013

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

Household Spending y/y National Core CPI y/y Tokyo Core CPI y/y FOMC Member Bullard Speaks Prelim Industrial Production m/m German Retail Sales m/m Nationwide HPI m/m Net Lending to Individuals m/m CPI Flash Estimate y/y Unemployment Rate Core PCE Price Index m/m Personal Spending m/m FOMC Member Bullard Speaks Chicago PMI Revised UoM Consumer Sentiment

Japan Japan Japan US Japan Euro UK UK Euro Euro US US US US US

5:00am 5:00am 5:00am 5:15am 5:20am 11:30am 11:30am 2:00pm 2:30pm 2:30pm 6:00pm 6:00pm 6:30pm 7:15pm 7:25pm

0.1% 0.7% 0.4% 3.2% -

0.4% 0.6% 0.4% 3.9% 0.5% 0.6% 1.7B 1.4% 12.1% 0.2% 0.3% 53.2 81.2

-0.4% 0.4% 0.4% 0.3% -3.1% 3.1% -1.5% 1.5% 0.8% 1.5B 1.6% 12.1% 0.2% 0.5% 52.3 80.0

Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium

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