Commodities Daily Report

Thursday| May 23, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn :6130 Saif Mukadam Research Analyst saif.mukadam@angelbroking.com (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report

Thursday| May 23, 2013

International Commodities
Overview
US Existing Home Sales increased to 4.97 million in the last month. UKs CBI Industrial Order Expectations was at -20-mark in May. European Current Account was at surplus of 25.9 bn Euros in March. UKs Retail Sales declined by 1.3 percent in the month of April. Asian markets are trading lower today on the back of unfavorable economic data from China coupled with expectations that US Federal Reserve may end its bond buying program as soon as starting from June. US Existing Home Sales increased to 4.97 million in April as against a rise of 4.94 million in March. Chinas HSBC Flash Manufacturing Purchasing Managers' Index (PMI) declined by 0.8 points to 49.6-mark in May as against a rise of 50.4-level in April. The US Dollar Index (DX) gained by 0.6 percent in the yesterdays trading session on the back of rise in risk aversion in the global market sentiments which led to increase in demand for the low yielding currency. Additionally, less than expected rise in the US existing home sales data coupled with expectations that US Federal Reserve will end its bond buying program soon exerted downside pressure on the currency. Further, weak US equities markets also acted as negative factor for the DX. The currency touched an intra-day high of 84.51 and closed at 84.46 on Wednesday. The Indian Rupee depreciated by 0.4 percent in yesterdays trading session. The currency depreciated on account of increase in dollar demand from gold and crude oil importers. Additionally, weak domestic and global market sentiments also exerted downside pressure on the currency. Further, strength in the DX also acted as a negative factor for the Indian Rupee. The currency touched an intra-day low of 55.66 and closed at 55.65 against dollar on Wednesday. For the month of May 2013, FII inflows totaled at Rs.16,567.80 crores ($3,064.91 million) as on 22nd May 2013. Year to date basis, net capital inflows stood at Rs.77,604.20 crores ($14,375.30 million) till 22nd May 2013.

Market Highlights (% change)

Last INR/$ (Spot) 55.65 Prev day -0.4

as on 22 May, 2013 w-o-w -1.6 m-o-m -2.6 y-o-y -0.6

$/Euro (Spot)

1.2856

-0.4

-0.2

-1.2

1.4

Dollar Index NIFTY

84.46

0.6

0.6

1.7

6.3

6094.5

-0.3

-0.9

4.5

24.2

SENSEX

20062.2

-0.2

-0.7

4.7

9.7

DJIA

15307.2

-0.5

0.2

4.1

22.4

S&P

1655.4

-0.8

-0.2

5.9

25.7

Source: Reuters

The Euro depreciated by 0.4 percent in yesterdays trade on the back of strength in DX coupled with mixed global market sentiments. Further, rise in worries over economic growth of the country kept currency under pressure. European Current Account was at a surplus of 25.9 billion Euros in March as against a surplus of 14.6 billion Euros a month ago. The Euro touched an intra-day low of 1.2831 and closed at 1.2856 against dollar on Wednesday. UKs Retail Sales declined by 1.3 percent in April as against a previous fall of 0.6 percent in March. Public Sector Net Borrowing was at 8 billion Pounds in April from earlier 12.6 billion Pounds in March. Confederation of British Industry (CBI) Industrial Order Expectations was at -20-mark in May as compared to earlier fall of 25-level in April.

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Commodities Daily Report

Thursday| May 23, 2013

International Commodities
Bullion Gold
Market Highlights - Gold (% change) Spot gold prices decreased by 0.5 percent in the yesterdays trading session as the US Federal Reserve Chairman Bernanke hinted at reducing a bond buying programme. Further, strength in DX kept prices under pressure. Additionally, SPDR gold trust holding continued to decline, which added downside pressure on the prices. The yellow metal touched an intra-day low of $1354.61/oz and closed at $1368.5/oz in yesterdays trading session. In the Indian markets, prices ended on negative note in the yesterday trading session taking cues from spot gold prices and closed at Rs.25963/10 gms after touching an intra-day low of Rs. 25902/10 gms on Wednesday.
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June13) MCX Gold (June13) Unit $/oz Rs/10 gms $/oz Last 1368.5 26190.0 Prev. day -0.5 0.7 as on 22 May, 2013 WoW -1.7 -0.8 MoM -4.4 -0.6 YoY -12.7 -9.8

1408.5

3.5

-0.1

-1.4

-11.0

$/oz

1367.6

-1.2

-2.1

-3.9

-14.1

Rs /10 gms

25963.0

-0.6

-1.3

-1.6

-10.7

Silver
Taking cues from decline in spot gold prices along with the strength in DX, Spot silver prices decreased by 0.8 percent in the yesterdays trading session. Further, mixed global market sentiments coupled with weak economic data from UK exerted downside pressure. However, upside in the base metal packs cushioned sharp fall in the prices. The white metal prices touched an intra-day low of $22.16 /oz and closed at $22.2/oz in yesterdays trade. On the domestic front, prices increased by 0.1 percent on the back of depreciation in the Indian Rupee and closed at Rs. 43226/kg after touching an intra-day high of Rs. 44600/kg on Wednesday. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 22.2 44760.0 Prev day -0.8 1.7

Source: Reuters

as on 22 May, 2013 WoW -1.7 0.0 MoM -3.9 -0.8 YoY -21.1 -

$/oz $/ oz

2262.0 2245.8

0.8 0.1

-1.1 -0.8

-1.3 -7.0

-19.4 -20.3

Rs / kg

43226.0

0.1

-0.2

0.8

-20.5

Outlook
In the intraday, we expect precious metals to trade on a negative note on the back of strength in DX coupled with weak global market sentiments. Further, US Federal Reserve Chairman Bernanke hinted at reducing a bond buying programme which may exert downside pressure on the prices. Additionally, SPDR gold trust holding fell by 0.3 percent to 1020.07 tonnes on Wednesday lowest in more than 4 years, may keep prices under pressure. Apart from that, weak economic data from China along with expectation of unfavourable economic data from Euro Zone may act as a negative factor. In the Indian markets, depreciation in the Indian Rupee may prevent sharp fall in the prices. Technical Outlook
Unit Spot Gold MCX Gold June13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for May 23, 2013 Support 1356/1349 25800/25650 21.80/21.50 42700/42200 Resistance 1372/1383 26100/26300 22.04/22.60 43700/44200

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Thursday| May 23, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 2 percent taking cues from expectations that US Federal Reserve may end its bond program as soon as starting from the month of June. Further, less than expected fall in the US crude oil inventories also exerted downside pressure on the oil prices. Additionally, strength in the DX acted as a negative factor for the crude prices. Crude oil prices touched an intra-day low of $94.01/bbl and closed at $94.30/bbl in yesterdays trading session. On the domestic bourses, prices dropped by 1 percent and closed at Rs.5,293/bbl after touching an intra-day low of Rs.5266/bbl on Wednesday. Depreciation in the Indian Rupee cushioned sharp fall in the prices on the MCX. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories declined less than expected by 0.3 million barrels to 394.60 million th barrels for the week ending on 17 May 2013. Gasoline stocks increased by 3.0 million barrels to 220.70 million barrels and whereas distillate stockpiles dropped by 1.1 million barrels to 118.80 million barrels for the last week. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (May13) MCX Crude (May 13) Unit $/bbl $/bbl $/bbl Last 94.0 102.5 94.3 Prev. day -1.6 -1.0 -2.0 WoW 0.0 0.8 0.0 as on 22 May, 2013 MoM 3.2 0.7 0.7 YoY 2.8 -7.2 2.9

$/bbl

102.6

-1.3

-1.0

0.9

-5.4

Rs/bbl

5293.0

-1.0

2.6

6.7

3.1
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (May 13) Unit $/mmbtu Rs/ mmbtu Last 4.181 233.4 Prev. day -0.2 0.3

as on 22 May, 2013

WoW 2.70 4.80

MoM -1.65 1.04

YoY 55.83 55.29

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 90 billion cubic feet (bcf) for the week ending on 17th May 2013. Outlook
Source: Telequote

From the intra-day perspective, we expect crude oil prices to trade lower on the back of rise in risk aversion in the global market sentiments coupled with strength in the DX. Additionally, less than expected fall in the US crude oil inventories will exert downside pressure on the oil prices. Further, plunge in Chinese manufacturing data along with expectations that US Federal Reserve will stop its bond buying program soon will act as a negative factor for the crude prices. In the Indian markets, depreciation in the Rupee will prevent sharp fall in the crude oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude May13 $/bbl Rs/bbl valid for May 23, 2013 Support 92.70/92.00 5250/5210 Resistance 94.50/95.40 5350/5400

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Thursday| May 23, 2013

International Commodities
Base Metals
The base metals pack traded on a positive note on the back of mixed LME inventories coupled with rise in US existing home sales data. However, strength in DX, mixed global market sentiments along with weak economic data from UK capped sharp upside in the prices. In the Indian market depreciation in the Indian rupee supported prices to trade in green on MCX, platform. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum $/tonne 1879.0 1.3 1.8 -1.5 -7.3 Rs/kg 416.9 1.7 4.9 10.1 -3.0 $/tonne Last 7442.8 Prev. day 1.1 as on 22 May, 2013 WoW 3.4 MoM -5.1 YoY -3.8

Copper
Copper, the leader of the base metal pack increased by 1.1 percent on the back of rise in US Existing home sales data. However, strength in DX, mixed global market sentiments along with weak economic data from UK capped sharp upside in the prices. Further, rise in LME inventories by 0.4 percent to 627,275 tonnes prevented sharp rise in the prices. Apart from that, a rally in the prices was capped as the US Federal Reserve Chairman Bernanke hinted at reducing a bond buying programme. The red metal touched an intra-day high of $7533.75/tonne and closed at $7442.8/tonne yesterdays trading session. On the domestic front, prices ended on positive note on the back of depreciation in the Indian Rupee and closed at Rs. 416.9/kg on Wednesday after touching an intra-day high of Rs 420.5 kg. Outlook In the intra-day, we expect base metals prices to trade on the negative note on the back of strength in DX coupled with weak global market sentiments. Further, decline in Chinas HSBC Manufacturing PMI along with the expectation of weak economic data from Euro zone may exert downside pressure on the prices. Additionally, US Federal Reserve Chairman Bernanke hinted at reducing a bond buying programme which may keep prices under pressure. Apart from that, expectation of decline in US manufacturing PMI may act as a negative factor for the prices. However, expectation of rise in US New Home sales data coupled with decline in US initial jobless claims may cushion sharp downside in the prices. Technical Outlook
Unit MCX Copper April13 MCX Zinc April 13 MCX Lead April 13 MCX Aluminum April13 MCX Nickel April 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for May 23, 2013 Support 412/409 102.5/101.5 113.5/112.5 102.8/102 835/827 Resistance 419/422 104.0/104.8 115.2/116.2 104/104.8 853/860

(3 month) MCX Aluminum (April13) LME Nickel (3 month) MCX Nickel (April13) LME Lead (3 month) MCX Lead (April13) LME Zinc (3 month) MCX Zinc (April13)
Source: Reuters

Rs /kg

103.4

1.8

3.1

1.3

-6.6

$/tonne

15180.0

1.0

1.9

-0.5

-10.4

Rs /kg

844.3

1.7

3.4

2.3

-10.1

$/tonne

2059.0

0.9

4.6

0.7

5.5

Rs /kg

114.4

1.6

6.0

3.8

5.8

$/tonne

1872.5

1.2

2.3

-2.2

-1.9

Rs /kg

103.3

2.1

3.8

1.1

-2.1

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 22nd May 627,275 5,218,175 179,598 1,107,200 236,275 21st May 624,525 5,225,650 178,758 1,111,275 237,925 Actual Change 2,750 -7,475 840 -4,075 -1,650 (%) Change 0.4 -0.1 0.5 -0.4 -0.7
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Thursday| May 23, 2013

International Commodities
Important Events for Today
Indicator HSBC Flash Manufacturing PMI French Flash Manufacturing PMI French Flash Services PMI German Flash Manufacturing PMI German Flash Services PMI Flash Manufacturing PMI Flash Services PMI Second Estimate GDP q/q Prelim Business Investment q/q FOMC Member Bullard Speaks Unemployment Claims Flash Manufacturing PMI New Home Sales Country China Europe Europe Europe Europe Europe Europe UK UK US US US US Time (IST) 7:15am 12:30pm 12:30pm 1:00pm 1:00pm 1:30pm 1:30pm 2:00pm 2:00pm 3:35pm 6:00pm 6:30pm 7:30pm Actual 49.6 Forecast 50.5 44.8 44.7 48.6 50.2 47.1 47.4 0.3% 1.7% 347K 51.6 429K Previous 50.4 44.4 44.3 48.1 49.6 46.7 47.0 0.3% -0.8% 360K 52.1 417K Impact High High Medium High Medium Medium Medium High Medium Medium High Medium High

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