Commodities Daily Report

Friday| December 28, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135

Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104view:

D Vijiya Rao - Research Analyst vijiya.d@angelbroking.com (022) 2921 2000 Extn. 6134view

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Commodities Daily Report

Friday| December 28, 2012

International Commodities
Overview
US unemployment claims declined to 350K in the w/e December 22. Japan Prelim Industrial Production fell to 1.7 percent in November. Japan retail sales rose to 1.3 percent in November. Asian markets are trading on a firm note as consumer prices in Japan witnessed a decline after the newly elected government pushed for more stimulus measures by the central bank of the Japan to boost the economy growth of the nation. Further, there are reports of better industrial companys growth in China is supporting positive market sentiments. Apart from this there is optimism that the US law makers might be able to strike a deal to avert the fiscal cliff issue on December 30th 2012. The US unemployment claims was 350,000, a decrease of 12,000 as compared to 362,000 for the week ended December 22. The US Conference Board Consumer Confidence Index declined in December at 65.1 as compared to a decline of 71.5 in November. US New home sales rose to 377,000, increase of 4.4 percent in November as compared to 361,000 rate in October.

Market Highlights (% change)

Last INR/$ (Spot)
54.92

as on 27 December, 2012

Prev day
-0.2

w-o-w
-0.1

m-o-m
1.0

y-o-y
-3.7

$/Euro (Spot)

1.3235

0.1

-0.1

2.2

1.3

Dollar Index

79.72

0.0

0.5

-0.9

-0.5

NIFTY

5870.1

-0.6

-0.8

2.5

23.6

SENSEX

19323.8

-0.5

-0.7

2.6

21.7

US Dollar Index (DX) settled on a flat note after remaining volatile during the day. The index pared losses in the early part of the day after Senate majority leader said that the US fiscal cliff issue is unlikely to be resolved before December 31st 2012. This created bearish market sentiments and increased the demand for the low yielding currency that is DX. However, towards the end of the session, the index declined as the House of Representatives planned to discuss over the fiscal cliff issue and try to avert the same on December 30th 2012. This exerted downside pressure on the index. US equities settled with negative bias in yesterdays session. Equities witnessed selling pressure as worries over the fiscal cliff issue weighed on the market sentiments. However, towards the end of the session as House of Representatives planned to discuss over the fiscal cliff issue on December 30th to avert the same, optimism increased over resolution of the same. The index touched an intra-day low of 79.42 and closed at 79.72 on Thursday.

DJIA

13096.31

-0.1

-1.6

1.7

6.5

S&P

1418.1

-0.1

1.4

1.37

12.1

Source: Reuters

Euro gained 0.1 percent higher on Thursday. Expectations that the budget deal might be arrived upon between the US law makers caused the currency to appreciate towards the end of the session. The currency had traded in subdued manner due to the lingering fiscal cliff issue during the early part of the trade. The currency touched an intra-day high of 1.3284 and closed at 1.3235 on Thursday.

The Indian Rupee depreciated 0.2 percent on Thursday on month end dollar demand from oil importers, and downward revision of the growth forecast of the nation to 8 percent in the 12th Five Year Plan. Apart from this capital outflows also caused the Indian rupee to depreciate in the yesterdays session. The rupee closed at 54.92 after touching a low of 55.01 on Thursday. For the month of December 2012, FII inflows totaled at Rs. 24,208.20 crores. While for the year 2012, net capital inflows stood at Rs. 127,480.20 crores.

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Commodities Daily Report

Friday| December 28, 2012

Bullion Gold

International Commodities

Market Highlights - Gold (% change)

Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Feb13) MCX Gold (Feb13) Unit $/oz Rs/10 gms $/oz Last
1663.3

as on 27 December, 2012 Prev day

0.2

Spot gold prices gained 0.2 percent higher due to safe haven buying by the market participants after US Senate majority leader Harry Reid said that the fiscal cliff issue of the nation might not be resolved before January 1st 2012. Strength in the DX in the early part of the trade however, capped gains. The yellow metal touched an intra-day high of $ 1,665.15/oz and closed at $ 1,663.29 per ounce on Thursday. On the MCX, Gold February contract ended 0.4 percent higher on account of depreciation in the Indian rupee and traced firmness in the spot gold prices. Gold prices on the MCX closed at Rs. 30,823/10 gms on Thursday after touching a high of Rs. 30849 / 10gms.

WoW
1.0

MoM
-4.5

YoY
4.5

30420.0

0.2

-0.5

-5.7

10.8

1655.5

#N/A

0.3

-5.2

#N/A

$/oz Rs /10 gms

1662.6

0.2

1.1

-4.6

4.3

30823.0

0.4

1.1

-4.4

11.5

Source: Reuters

Silver
Spot silver prices declined 0.6 percent taking cues from trend in the spot gold prices along with strength in the base metals pack. Strength in the DX in the early part of the trade however capped gains. The white metal touched an intra-day high of $ 30.46/oz and closed at $ 30.2 per oz on Thursday. In the Indian markets, MCX silver prices gained 1.2 percent and closed at Rs. 58,175/kg on Thursday and touched an intra-day high of Rs. 58,444 / kg. Depreciation in the Indian rupee acted as a supportive factor for the silver prices on MCX.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last
30.2 57770.0

as on 27 December, 2012 WoW

0.7 -3.2

Prev day
0.6 0.3

MoM
-11.3 -10.0

YoY
5.3 9.9

2975.0

#N/A

-4.4

-12.6

#N/A

3018.4 58175.0

0.7 1.2

1.9 1.4

-11.2 -8.4

5.2 10.4

Outlook
In the intra-day, we expect gold prices to remain weak due to selling by the market participants on the back of optimism that the US law makers might be able to avert the fiscal cliff issue. This is likely to reduce the safe haven buying of the yellow metal. Weakness in the DX is however expected to cushion fall in the gold prices. Silver prices are however, expected to trade firm taking cues from strength in the industrial metals. In the domestic markets however, appreciation in the Rupee will exert downside pressure on the gold prices on MCX. Technical Outlook
Unit Spot Gold MCX Gold Feb13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for December 28, 2012 Support 1659/1652 30740/30620 30.15/29.85 57900/57400 Resistance 1668/1672 30910/30990 30.40/30.70 58400/58900

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Friday| December 28, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices gained 0.2 percent in yesterdays trading session on the back of expectations that US lawmakers will not be able to reach a deal in order to avert the fiscal crisis. However, decline in the US consumer confidence acted as a bearish factor for the crude oil prices. Weakness in the DX coupled with decline in unemployment claims supported an upside in the crude prices. Oil prices touched an intra-day high of $91.44/bbl and closed at $90.87/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.2 percent as a result of depreciation in the Indian Rupee and closed at Rs.4,992/bbl after touching an intra-day high of Rs.5,040/bbl on Thursday. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories declined as expected by 1.17 million barrels to 370.5 million barrels for the week ending on 21st December 2012. Gasoline inventories rose around 2.4 million barrels to 215.84 million barrels and whereas distillate inventories gained by 2.9 million barrels to 118.79 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:30pm IST and US crude oil inventories is expected to decline by 1.9 million barrels for the week ending on 21st December 2012. Gasoline stocks are expected to gain by 0.5 million barrels whereas distillate inventories are expected to drop by 0.9 million barrels for the same period. Outlook In the intra-day we expect crude oil prices to remain firm on expectation that the US law makers might be able to resolve the lingering fiscal cliff issue before December 31st 2012. This is expected to reduce worries of the US economy going back into recession. Weakness in the DX along with expectation of decline in the crude oil inventories to be released in the later part of the day is likely to support an upside in the crude oil prices. In the domestic market appreciation in the rupee is likely to cap gains in the crude oil prices on MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Jan 13 $/bbl Rs/bbl valid for December 28, 2012

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Feb13) ICE Brent Crude (Feb13) MCX Crude (Jan12) Unit $/bbl $/bbl Last
90.9 111.2

as on 27 December,2012 WoW
1.3 -1.1

Prev. day
0.2 #N/A

MoM
4.7 0.8

YoY
-10.2 #N/A

$/bbl

90.9

-0.1

0.8

4.2

-10.3

$/bbl

110.8

-0.2

0.5

0.8

1.4

Rs/bbl

4992.0

0.2

0.3

2.2

-7.1

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Dec 12) Unit $/mmbtu Rs/ mmbtu Last 3.366 188.3

(% change)

as on 27 December, 2012

Prev. day -0.77 1.24

WoW -2.46 -1.77

MoM -8.93 -10.46

YoY 9.14 10.96

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

Support 90.70/90.10 4960/4925

Resistance 92.00/92.70 5030/5070

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Commodities Daily Report

Friday| December 28, 2012

International Commodities
Base Metals
Market Highlights - Base Metals (% change) The base metals pack traded on a positive note taking cues from the Chinese, the US economic data and expectations on the resolution of the US fiscal cliff issue. MCX base metals prices, tracking the international prices also increased. Further, deprecation in the rupee acted as a supportive factor for the rise in base metal prices.
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) $/tonne
2080.5 0.1 0.9 3.7 3.1

as on 27 December, 2012 WoW

1.9

Last
7917.8

Prev. day
1.3

MoM
1.6

YoY
3.9

$/tonne

Rs/kg
440.8 0.4 1.8 1.9 9.3

Copper
Copper prices gained 1.3 percent on Thursday. Rise in copper prices was due to series of positive Chinese economic data in the previous weeks and profits of industrial companies in the China surging by 22.8 percent in November 2012. Strength in the DX coupled with rise in the LME inventories capped gains in the yesterdays session. Copper inventories on LME increased by 0.2 percent on Thursday and stood at 3,18000 tonnes as against 3,17,350 tonnes on 24th December 2012. Prices of Copper on LME touched an intra-day high of $7,945.25 per tonne and closed at $ 7,917.75/tonne on Thursday. In the domestic markets MCX copper gained 0.4 percent tracing firmness in the international prices and depreciation in the Indian rupee. In the domestic markets prices of Copper on MCX touched an intra-day high of Rs. 441.4 per kg and closed at Rs. 440.8 per kg on Thursday. Outlook From the intraday perspective, the base metals are expected to trade upwards on the back of positive data from the US and China and the optimism that the US fiscal cliff issue might be resolved. However, weak DX is likely to add to the gains in the base metals pack. In the domestic markets, appreciation in the Indian rupee will cap gains in the metal prices on MCX. Technical Outlook
Unit MCX Copper Feb13 MCX Zinc Dec12 MCX Lead Dec12 MCX Aluminum Dec12 MCX Nickel Dec12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for December 28, 2012 Support 437/434 112.9/112.3 126.5/125.8 112/111.5 941/935 Resistance 442/445 113.9/114.4 127.7/128.2 113.2/114.2 954/962

MCX Aluminum (Dec12) LME Nickel (3 month) MCX Nickel (Dec12) LME Lead (3 month) MCX Lead (Dec12) LME Zinc (3 month) MCX Zinc (Dec12)

Rs /kg
112.5 0.0 0.7 1.4 6.6

$/tonne
17299.0 -0.1 -1.0 2.3 -6.8

Rs /kg
946.8 -0.3 -1.0 1.4 -3.6

$/tonne
2330.5 0.8 0.3 5.6 15.1

Rs /kg
127.3 0.6 0.6 4.2 20.7

$/tonne
2093.8 1.1 1.3 5.3 12.8

Rs /kg
113.6 0.9 1.5 3.8 16.4

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 27 December
318000 5222300 138702 1224575 327650
th

24 December
317350 5232125 138732 1224625 329150

th

Actual Change 650 -9,825 -30 -50 -1,500

(%) Change 0.2 -0.2 0.0 0.0 -0.5

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| December 28, 2012

International Commodities
Important Events for Today

Indicator Household Spending y/y Tokyo Core CPI y/y Prelim Industrial Production m/m Retail Sales y/y Average Cash Earnings y/y Nationwide HPI m/m French Consumer Spending m/m Italian 10-y Bond Auction Chicago PMI Pending Home Sales m/m Crude Oil Inventories

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

Time (IST) 5:00am 5:00am 5:20am 5:20am 7:00am 28 30

th th

Actual 0.2% -0.6% -1.7% 1.3% -1.1% -

Forecast 0.8% -0.5% -0.5% 1.2% -0.4% 0.1% 0.0% 51.2 -0.3% -1.6M

Previous -0.1% -0.5% 1.6% -1.2% -0.4% 0.0% -0.2% 4.45/1.2 50.4 5.2% -1.0M

Impact Medium Medium Medium Medium Medium Medium Medium Medium Medium High Medium

1:15pm Tentative 8:15pm 8:30pm 9:30pm

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