Commodities Daily Report

Friday| September 6, 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| September 6, 2013

International Commodities
Overview
US ADP Non-Farm Farm Employment Change declined to 176,000 in August. German Factory Orders declined 2.7 percent in prior month. US ISM Non-Manufacturing PMI rose to 58.6-mark mark in last month month. th US crude oil inventories declined by 1.8 mn bbl for w/e 30 August.

Market Highlights (% change)

Last INR/$ (Spot) Prev day

as on September 5, 2013 w-o-w m-o-m y-o-y

66.01

1.6

0.8

-8.6

-15.8

Asian markets are trading on a mixed note today ahead of the US jobs report. Further, mixed economic data from US in yesterdays trade acted as a negative factor. Farm Employment Change US Automatic Data Processing, Inc. (ADP) Non-Farm declined by 22,000 to 176,000 in August as against a rise of 198,000 in July. Unemployment Claims fell by 9,000 to 323,000 for the week ending on 30th August from 332,000 a month ago. Revised evised Nonfarm Productivity increased by 2.3 percent in Q2 of 2013 with respect to 0.9 percent in Q1 of 2013. The Institute for Supply Management (ISM) Non Non-Manufacturing Purchasing Managers' Index (PMI) rose by 2.6 points to 58.6 58.6-mark in August when compared to 56-level level in July. Factory Orders dropped by 2.4 percent in July from rise of 1.6 percent a month earlier earlier. The US Dollar Index (DX) gained around 0.6 percent in the yesterdays trading session on the back of unfavorable employment data from US which led to increase in demand for the low yielding currency. However, sharp upside in the currency was capped as a result of rise in risk appetite in the global market sentiments. The currency touched an intra-day day high of 82.71 and closed at 82.67 on Thursd Thursday. The Indian Rupee appreciated around 1.6 percent in yesterdays trading session. The currency appreciated on the back of measures taken by Reserve Bank of India (RBI) new governor Raghuram Rajan Rajan. The measures include enhancing limits for exporters to re-book book cancelled forward exchange contracts and a special concessional window to swap foreign currency non-resident (FCNR) deposits. Further, upbeat domestic market sentiments supported an upside in the Rupee. The currency touched an intra-day day high of 65.53 and closed at 66.01 on Thursday. For the month of September 2013, FII outflows totaled at Rs.222.0 crores th ($32.13 million) as on 5 September 2013. Year to date basis, net capital th inflows stood ood at Rs.59947.90 crores ($11551.20 million) till 5 September 2013. UKs Asset Purchase Facility remained unchanged at 375 Billion Pounds. Official Bank Rate remained unchanged at 0.5 percent.

$/Euro (Spot)

1.3119

-0.7 0.7

-0.9

-1.4

4.4

Dollar Index NIFTY

82.67

0.6

0.8

2.0

4.0

5593.0

2.7

0.9

0.9

6.0

SENSEX

18979.8

2.2

1.3

1.3

3.8

DJIA

14937.5

0.0

0.8

-3.6

14.5

S&P

1655.1

0.1

-3.1

-3.1

17.9

Source: Reuters

The Euro declined around 0.7 percent in the yesterdays trading session taking cues from strength in the DX. Further, unfavorable economic data from the region exerted downside pressure on the currency. However, sharp downside will be cushioned as a result resu of upbeat global market sentiments. The Euro touched an intraintra day low of 1.3109 and closed at 1.3119 on Thursday. German Factory Orders declined 2.7 percent in August as against a gain of 5 percent in July. Minimum Bid Rate remained unchanged at 0.5 percent. The European Central Bank said yesterday that it was ready to cut interest rates or pump more money into the Euro Zone economy if needed to help the recovery in the region. The ECB also upgraded its GDP estimate for next year and expects the growth owth to be 1 percent.

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Commodities Daily Report

Friday| September 6, 2013

International Commodities
Bullion Gold
Spot gold prices declined around 1.7 percent in yesterdays trade on the back of strength in the DX and decline in SPDR gold holdings at 919.23 tonnes. However, sharp downside in prices was cushioned as result of upbeat global market sentiments. The yellow metal touched an intra intra-day low of $1364.91/oz and closed at $1367.0/oz 0/oz in yesterdays trading session. In the Indian markets, prices traded on a negative note by 1.2 percent as a result of f appreciation in the Rupee and closed at Rs.32, Rs.32,218/10 gms after touching an intra-day low of Rs.32,026/10 /10 gms on Thursday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1367.0 Prev. day -1.7 as on September 5, 2013 WoW -2.9 MoM 6.7 YoY -19.3

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

Rs/10 gms $/oz

31800.0

-1.9

13.4

13.4

6.7

1385.0

-0.4

-1.6

8.2

-18.4

$/oz

1373.1

-1.2

-2.8

4.6

-18.8

Rs /10 gms

32218.0

-1.2

-4.3

16.7

2.4

Silver
Taking cues from fall in gold prices along with strength in the DX DX, Spot silver prices declined around 1.2 percent in the yesterdays trade. However, sharp downside in prices was cushioned as a result of upside in base metals group. . The white metal touched an intra intra-day low of $22.98/oz and closed at $23.20 0 in yesterdays trading session. On the domestic front, prices gained around 0.2 percent and closed at Rs.53,227/kg after touching a low of Rs.52,195/kg /kg on Wednesday. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Dec13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 23.2 55750.0 Prev day -1.2 -1.0

Source: Reuters

as on September 5, 2013 WoW -2.9 31.8 MoM 18.8 31.8 YoY -28.4 1.9

$/oz $/ oz

2352.0 23.2

-0.8 -0.7

-2.4 -3.7

18.9 13.8

-26.7 -28.9

Outlook
In the Indian markets, Rupee appreciation is expected to exert downside pressure in gold and silver prices both. In the international markets, gold prices are expected to trade on a mixed note on the back of mixed global market sentiments. Additionally, decline in SPDR gold holdings will act as a negative factor. However, weakness in the DX will cushion sharp fall in the prices. Technical Outlook
Unit Spot Gold MCX Gold Oct13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for September 6 6, 2013 Support 1365/1354 32050/31800 23.05/22.80 54100/53600 Resistance 1382/1388 32450/32600 23.40/23.60 55000/55400

Rs / kg

53227.0

0.2

-4.2

28.2

-12.2

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Friday| September 6, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices gained around 1.1 percent in the yesterdays trading session taking cues from decline in US crude oil inventories. Further, more than expected rise in US non-manufacturing manufacturing data and fall in jobless claims data supported an upside in prices. However, sharp upside in prices was capped as result of strength in the DX along with estimates tes of limited military actions on Syria by the US US. Crude oil prices touched an intra-day high of $108.54 54/bbl and closed at $108.40/oz in yesterdays trading session. On the domestic bourses, MCX crude September contract rose around 1 percent and prices touched an intra-day high of Rs.7, Rs.7,270/bbl and closed at Rs.7,201/bbl on Thursday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories declined by 1.84 million barrels to 360.0 million barrels for the week ending on 30th August 2013. Gasoline stocks dropped by 1.83 million barrels to 216.0 million barrels and whereas distillate stockpiles rose by 549,000 barrels to 129.50 million barrels for the last week. Market Highlights - Crude Oil (% change)
Crude Oil Brent (Spot) Nymex Crude (Oct 13) ICE Brent Crude (Sep13) MCX Crude (Sep 13) Unit $/bbl $/bbl Last 117.8 108.4 Prev. day 0.1 1.1 as on September 5, 2013 WoW -0.9 -1.6 MoM 7.2 4.8 YoY 2.1 13.6

$/bbl

115.3

0.3

0.1

6.5

0.9

Rs/bbl

7201.0

1.0

-3.4

11.5

35.5

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Sep 13) Unit $/mmbtu Rs/ mmbtu Last 3.574 239.4 Prev. day -2.7 -1.9

as on September 5, 2013 MoM 7.59 17.41 YoY 27.60 52.48

Source: Reuters

WoW -1.30 -1.89

Technical Chart NYMEX Crude Oil

Natural Gas
EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory increased b by 58 billion cubic feet (bcf) which stood at 3.188 trillion cubic feet for the week ending on 30th August 2013. Outlook
Source: Telequote

From the intra-day day perspective, we expect crude oil prices to trade mixed on the back of mixed global markets sentiments coupled with weakness in the DX. Further, decline in API and US crude oil inventories will support an upside in prices. Additionally, a proper trend to the commodity will be provided after unemployment rate data of US in the evening session. However, sharp upside in the prices will be prevented as a result of expectations of limited military actions against Syria by US. In the Indian markets, appreciation in the Rupee will add downside pressure in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Sep13 $/bbl Rs/bbl valid for September 6 6, 2013 Support 107.30/106.10 7130/7050 Resistance

Technical Chart NYMEX Natural Gas

Source: Telequote

109.40/110.60 7270/7350

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Commodities Daily Report

Friday| September 6, 2013

International Commodities
Base Metals
Base metals pack on the LME traded on a positive note except lead due to upbeat global market sentiments and marginal decline in inventories of all metals apart from nickel. However, strength in the DX and mixed economic data from US capped sharp gains. Nickel led the gains in the base me metals with a rise of 1.1 percent. In the Indian markets, appreciation in the Rupee restricted sharp upside movement in prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov13) LME Aluminum (3 month) MCX Aluminum (Sep13) LME Nickel (3 month) MCX Nickel (Sep13) LME Lead (3 month) MCX Lead (Sep13) LME Zinc (3 month) MCX Zinc (Sep13)
Source: Reuters

as on September 5, 2013 WoW -0.4 MoM -9.1 YoY -6.5

Last 7134.5

Prev. day 0.0

$/tonne

Rs/kg

483.5

0.0

-0.7

12.2

12.6

$/tonne

1806.0

0.8

-1.6

1.1

-6.8

Copper
LME Copper traded on a flat note yesterday due to mixed economic data from the advanced ed economies and easing of military strikes against Syria. Further, upbeat pbeat global market sentiments supported an upside in prices. However, strength in the DX capped sharp rp gains in prices prices. The red metal touched an intraday high of $7167.75/tonne and closed at $7134.5/tonne on Thursday. In the Indian markets, MCX copper contract traded on a flat note and sharp gains were capped due to appreciation in the Rupee. The metal closed at Rs.483.5/kg in the yesterdays trading session session. Outlook In todays session, we expect base metals prices to trade on a mixed note on the back of weakness in the DX. Further, more than estimated rise in US non-manufacturing manufacturing data in yesterdays trade will support an upside in prices. However, sharp upside in prices will be capped on account of forecast of decline in German industrial production data coupled with slow rise of manufacturing and industrial production in UK UK. Additionally, mixed global market sentiments will cap sharp gains in prices. Unemployment rate data in the evening session will provide trend for the prices. In the Indian markets, appreciation in the Rupee will add downside pressure in prices on the MCX. Technical Outlook
Unit MCX Copper Nov13 MCX Zinc Sep13 MCX Lead Sep 13 MCX Aluminum Sep13 MCX Nickel Sep 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for September 6 6, 2013 Support 479/474 122.50/121.50 140.00/139.00 117.00/116.00 912/905 Resistance 484/491 124.50/125.50 142.50/143.50 119.30/120.20 927/935

Rs /kg

118.2

0.8

-3.0

9.1

9.9

$/tonne

13827.0

1.1

-2.0

0.4

-13.6

Rs /kg

919.3

1.0

-3.3

8.5

2.5

$/tonne

2132.0

-0.2

-2.9

1.2

7.2

Rs /kg

141.2

-0.3

-5.2

9.2

27.6

$/tonne

1877.0

0.2

-3.0

1.3

0.2

Rs /kg

123.5

0.1

-4.2

9.5

18.8

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 5th September 603,275 5,380,975 214,386 988,350 184,450 4th September 603,900 5,386,625 213,804 992,600 185,350 Actual Change -625 -5,650 582 -4,250 -900 (%) Change -0.1 -0.1 0.3 -0.4 -0.5

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| September 6, 2013

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

German Trade Balance Halifax HPI m/m Manufacturing Production m/m Consumer Inflation Expectations Trade Balance German Industrial Production m/m FOMC Member Evans Speaks Non-Farm Employment Change Unemployment Rate Average Hourly Earnings m/m NIESR GDP Estimate G20 Meetings FOMC Member George Speaks

Euro UK UK UK UK Euro US US US US UK All US

11:30am 6 -7
th th

15.9B 0.7% 0.3% -8.2B -0.3% 177K 7.4% 0.2% -

15.7B 0.9% 1.9% 3.6% -8.1B 8.1B 2.4% 162K 7.4% -0.1% 0.1% 0.7% -

Medium Medium High Medium Medium Medium Medium High High Medium High Medium Medium

2:00pm 2:00pm 2:00pm 3:30pm 5:30pm 6:00pm 6:00pm 6:00pm 7:30pm Day 2 11:00pm

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