Commodities Daily Report

Thursday| October 25, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Overview:

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135 Anish Vyas - Research Associate anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Thursday| October 25, 2012

International Commodities
Overview
US Flash Manufacturing PMI increased to 51.3-mark in current month. European Flash Manufacturing PMI declined to 45.3-level in October. UKs CBI Industrial Order Expectations fell 23-mark in present month. US New Home Sales rose by 389,000 in the last month. th US crude oil inventories increased by 5.9 mn bbl for the w/e 19 Oct. US Federal Funds Rate unchanged at 0.25 percent for month of Oct.

Market Highlights (% change)

Last INR/$ (Spot)
53.73

as on 24 October, 2012

Prev day
0.0

w-o-w
-1.7

m-o-m
-0.3

y-o-y
-7.9

Asian markets are trading on a firm note taking cues from favorable home sales data from the US economy and as the US Federal Reserve stated that the economy is growing on a modest pace. US Flash Manufacturing Purchasing Managers' Index (PMI) increased by 0.2 points to 51.3-mark in October as against a rise of 51.1-level in September. New Home Sales rose by 389,000 in September from previous rise of 368,000 a month ago. US Federal Funds Rate unchanged at 0.25 percent for the month of October. US Dollar Index swung between gains and losses and ended 0.1 lower on Wednesday. US Dollar Index (DX) was trading lower on the back of better economic data from the US economy thereby increasing the demand from the low yielding currency that is DX. However, the index witnessed rise in the risk aversion towards the end of the session as US Federal Reserve did not delivered any surprising statement in the policy meeting yesterday. The currency failed to erase the earlier losses and ended lower. US equities ended lower as the US Federal Reserve stated that the economy was growing modestly and unemployment remains high thereby created bearish market sentiments. However, sharp downside was cushioned on the back of positive new home sales data from the nation. The currency touched low of 79.91 and closed at 80.02 levels on Wednesday. The Indian Rupee depreciated by 0.5 percent in the yesterdays trading session. The currency appreciated taking cues from rise in risk appetite along with weakness in the DX. Additionally, dollar demand from the oil refiners and companies also acted as a supportive factor for the currency. The currency touched a high of 53.84 in Tuesdays session and closed at 53.72 on Tuesday. For the current month FII inflows totaled at Rs. 11,579.70 crores till 23 October 2012. While year to date basis, net capital inflows stood at Rs. rd 93,910.50 crores till 22 October 2012.
rd

$/Euro (Spot)

1.2971

-0.1

-1.1

0.8

-6.7

Dollar Index

80.02

-0.1

1.2

0.1

4.8

NIFTY

5691.4

-0.5

0.6

0.5

9.6

SENSEX

18710.0

-0.4

0.5

0.4

8.4

DJIA

13077.3

-0.2

-3.5

-2.5

11.7

S&P

1408.75

-0.3

-3.6

-3.5

13.8

Source: Reuters

Euro declined 0.1 percent as ECB President Mario Draghi said that the region is facing deflation and thereby hurting growth in the region. Further, a series of unfavorable data from the region also acted as bearish factor for the currency in yesterdays session. However, weakness in the DX cushioned sharp fall in the currency. The currency touched a low of 1.2918 and closed at 1.2971 on Tuesday. French Flash Manufacturing Purchasing Managers' Index (PMI) increased by 0.8 points to 43.5-level in October from previous rise of 42.7-mark in September. French Flash Services PMI rose by 1.2 points to 46.2-mark in October as against a previous rise of 45-level in September. German Flash Manufacturing PMI declined by 1.7 points to 45.7-mark in current month as compared to earlier rise of 47.4-level in September. German Flash Services PMI also fell by 0.4 points to 49.3-level in October with respect to rise of 49.7-mark in prior month. German Ifo Business Climate declined to 100-level in October from rise of 101.4-mark in September. European Flash Manufacturing PMI declined by 0.8 points to 45.3-mark in October when compared to rise of 46.1-level in last month. European Flash Services PMI rose marginally to 46.2-level in current month with respect to rise of 46.1-mark a month ago. www.angelcommodities.com

UKs Confederation of British Industry (CBI) Industrial Order Expectations declined by 23-mark in October from previous decline of 8-level in September.

Commodities Daily Report

Thursday| October 25, 2012

Bullion Gold

International Commodities

Spot gold prices declined 0.4 percent as US Federal Reserve states that economy is growing modestly and unemployment remains at higher levels and made few surprises in the policy statement. The Fed also maintained its vow to keep rates near zero until mid-2015 and its pledge to keep supporting growth while the recovery strengthens. Further, worries of deflation in the Euro zone also triggered a selloff in the yellow metal. However, weakness in the DX cushioned sharp fall in the gold prices in yesterdays session The yellow metal touched an intra-day low of $1,698.39/oz and closed at $1,701.44/oz on Wednesday. On the MCX, Gold October contract fell 0.5 percent taking cues from bearishness in the spot gold. Gold prices on the MCX closed at Rs.30,835/10 gms after touching an intra-day low of Rs. 30,827/ 10gms.

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 Last
1701.9

as on 24 October, 2012 Prev day

-0.4

WoW
-2.7

MoM
-2.8

YoY
-0.1

30700.0

-0.4

-0.6

-2.6

15.2

1706.5

-0.3

-2.4

-2.2

3.0

$/oz Rs /10 gms

1700.5

-0.5

-2.9

-2.9

0.1

30845.0

-0.4

-0.9

-1.5

12.7

Source: Reuters

Silver
Market Highlights - Silver (% change) Spot silver prices swung between gains and losses and finally settled 0.1 percent higher taking cues from mixed trend in the base metals along with weakness in the DX. However, sharp gains were capped due to weakness in the gold prices. The white metal touched an intra-day high of $32.02/oz and closed at $31.70/oz on Wednesday. In the Indian markets, MCX silver prices fell 0.3 percent and closed at Rs. 59,000/kg after touching an intra-day low of Rs.58,860/kg on Wednesday.
Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last
31.7 59900.0 3190.0

as on 24 October, 2012 WoW

-4.5 -1.7 -3.4

Prev day
0.0 -0.6 0.6

MoM
-6.7 -2.7 -5.8

YoY
-4.5 11.1 -0.3

3159.5

-0.5

-4.8

-6.8

-4.4

59000.0

-0.3

-2.6

-5.8

7.1

Outlook
In todays session, we expect precious metals to trade on a positive note on the back of upbeat global market sentiments. Positive data from the US economy along with US Federal Reserve statement that it will continue with its bond buying program as the economy is progressing modestly along with weakness in the DX is expected to keep precious metals firm. In the Indian markets appreciation in the Rupee will cap sharp gains in the MCX precious metals. Technical Outlook
Unit valid for October 25, 2012 Support Resistance

Source: Reuters

Technical Chart Spot Gold

Spot Gold

$/oz

1704/1699

1712/1718

MCX Gold Dec12

Rs/10 gms

30790/30700

30940/31050

Source: Telequote

Spot Silver

$/oz

31.75/31.60

32.0/32.20

MCX Silver Dec12

Rs/kg

58700/58400

59200/59500

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Commodities Daily Report

Thursday| October 25, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices declined 1.5 percent on the back of rise in the US crude oil inventories and weak demand from the consuming nations. However, sharp fall in the prices were cushioned due to weakness in the DX. However, sharp downside in the prices was cushioned on the back of weakness in the DX along with Tropical Storm Sandy expected to hit East Coast of US by next week. Crude oil prices touched an intra-day low of $84.94/bbl and closed at $85.70/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.4 percent and closed at Rs.4,649/bbl after touching an intra-day low of Rs. 4,613/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report last night, US crude oil inventories increased more than expected by 5.90 million barrels to 375.10 million barrels for the week ending on 19th October 2012. Gasoline stocks rose by 1.44 million barrels to 198.60 million barrels and whereas distillate stockpiles drop by 646,000 barrels to 118.0 million barrels for the last week. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Nov12) ICE Brent Crude (Nov12) MCX Crude (Nov12) Unit $/bbl $/bbl Last
85.4 108.4

as on 24 October, 2012 WoW

-7.3 -5.1

Prev. day
-1.5 0.1

MoM
-5.1 -0.9

YoY
-8.2 -3.9

$/bbl

85.7

-1.1

-6.9

-4.7

-8.0

$/bbl

107.9

-0.4

-4.7

-2.0

-2.8

Rs/bbl

4649.0

-0.4

-4.5

-3.6

0.0

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Oct 12)

as on 24 October, 2012

Unit $/mmbtu Rs/ mmbtu

Last
3.433 188.5

Prev. day
-2.64 -1.21

WoW
-1.35 2.78

MoM
18.79 23.61

YoY
-5.82 3.57

Source: Reuters

Technical Chart Nymex Crude Oil

Natural Gas
EIA Inventories Forecast US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to increase by 66 billion cubic feet (bcf) for the week ending on 19th October 2012. Outlook
Source: Telequote

We expect crude oil prices to remain trade with upward bias on the back of upbeat global market sentiments along with weakness in the DX. Additionally, favourable data from the US economy and Chinese economy will also act as a supportive factor for the crude oil prices. However, sharp rise in the prices are expected to be capped on the back of sufficient US stock piles of crude oil. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Nov 12 $/bbl Rs/bbl valid for October 25, 2012

Technical Chart Nymex Natural Gas

Support 4610/4560 85.20/84.20

Resistance 4700/4740 86.90/87.60

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Commodities Daily Report

Thursday| October 25, 2012

International Commodities
Base Metals
The base metals pack traded on a mixed note in the yesterdays trade on the back of mixed global market sentiments along with unfavourable economic data from the Euro Zone However, decline in LME inventories supported an upside in the base metal prices coupled with weakness in the DX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum $/tonne
1945.0 -0.3 -2.1 -6.5 -12.0

as on 24 October, 2012 WoW

-4.3

Last
7860.5

Prev. day
0.1

MoM
-3.5

YoY
4.3

$/tonne

Rs/kg

427.4

0.2

-2.7

-3.3

14.0

Copper
Copper, the leader of the base metals complex swung between gains and losses and finally ended 0.1 percent higher due to positive manufacturing data from the Chinese economy along with weakness in the DX. However, sharp rise in the prices were capped on the back of series of unfavourable data from the Euro zone area showing slowdown of the economy. Decline in LME Copper inventories by 0.1 percent also acted as a supportive factor for the copper prices. LME Copper stocks stood at 2,22,350 tonnes. The red metal touched an intra-day high $7,918/tonne and closed at $7,860/tonne in yesterdays session. On the domestic front, prices gained 0.2 percent and closed at Rs.427.4/kg after touching a high of Rs.428.6/kg on Wednesday. Outlook From the intraday perspective base metal prices are expected to trade on a positive note due to upbeat global market sentiments along with weakness in the DX. Positive data from the Chinese and US economy may increase the demand for the red metal. Appreciation in the Rupee will however, cap sharp gains in the base metal prices in the Indian markets. Technical Outlook
Unit MCX Copper Nov12 MCX Zinc Oct12 MCX Lead Oct12 MCX Aluminum Oct12 MCX Nickel Oct12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for October 25, 2012 Support 424/422 97.80/97.0 108.60/107.80 103.0/102.20 877/870 Resistance 430/432 99.20/100.0 110.0/110.80 104.40/105.20 890/897

(3 month) MCX Aluminum (Oct12) LME Nickel (3 month) MCX Nickel (Oct12) LME Lead (3 month) MCX Lead (Oct12) LME Zinc (3 month) MCX Zinc (Oct12)
Source: Reuters

Rs /kg

103.8

-0.4

-0.6

-5.5

-4.5

$/tonne

16391.0

-0.1

-4.4

-9.2

-16.9

Rs /kg

883.3

0.2

-2.6

-8.5

-9.5

$/tonne

2018.0

-0.8

-6.5

-11.1

2.6

Rs /kg

109.3

-0.3

-4.2

-9.9

13.7

$/tonne

1861.8

0.4

-3.3

-10.6

0.5

Rs /kg

98.6

0.6

-1.9

-10.5

8.4

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 24th October
222,350 5,057,575 127,914 1,109,975 310,975

23rd October
222,600 5,059,500 127,938 1,112,850 312,550

Actual Change
-250 -1,925 -24 -2,875 -1,575

(%) Change
-0.1 0.0 0.0 -0.3 -0.5 Source: Reuters

Technical Chart MCX Copper

Source: Telequote

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Commodities Daily Report

Thursday| October 25, 2012

International Commodities
Important Events for Today

Indicator Prelim GDP q/q MPC Member Tucker Speaks Core Durable Goods Orders m/m Unemployment Claims Durable Goods Orders m/m Pending Home Sales m/m

Country UK UK US US US US

Time (IST) 2:00pm 3:45pm 6:00pm 6:00pm 6:00pm 7:30pm

Actual -

Forecast 0.6% 0.8% 371K 7.1% 2.3%

Previous -0.4% -1.6% 388K -13.2% -2.6%

Impact High Medium High High Medium High

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