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Commodities Daily Report

Tuesday| October 16, 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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Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from Angel Commodities Broking (P) Ltd. Your feedback is appreciated on commodities@angelbroking.com

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Commodities Daily Report


Tuesday| October 16, 2012

International Commodities
Overview
US Core Retail Sales increased by 1.1 percent in September. Japans Revised Industrial Production fell by 1.6 percent in August. Indias wholesale price index (WPI) increased 7.81 in the last month. US Empire State Manufacturing Index was at -6.2-mark in October.

Market Highlights (% change)


Last INR/$ (Spot)
52.97

as on 15 October, 2012

Prev day
-0.3

w-o-w
-0.8

m-o-m
1.7

y-o-y
-7.5

Asian markets are trading on a upbeat note taking cues from better than expected sales data from the US economy showcasing that the economy is on the path of recovery. US Core Retail Sales increased by 1.1 percent in September as against a rise of 1 percent in August. Retail Sales also increased by 1.1 percent in September from previous rise of 1.2 percent in August. Empire State Manufacturing Index was at -6.2-mark in October as compared to previous decline of 10.4-level in September. Business Inventories rose by 0.6 percent in August with respect to rise of 0.8 percent a month ago. Indias wholesale price index (WPI) increased more than expected to 7.81 percent in September as against a previous rise of 7.55 percent in August. Food price index WPI was at 7.86 percent in September from previous rise of 9.14 percent in August. Fuel price index rose by 11.88 percent in last month as compared to earlier rise of 8.32 percent in August. Manufacturing inflation increased by 6.26 percent in September with respect to prior rise of 6.14 percent a month ago. US Dollar Index swung between gains and losses and settled 0.1 percent on the back of rise in the risk aversion amongst the markets participants in the early part of the trade owing to worries of global slowdown. However, with favorable data from the US economy led to rise in the risk appetite and thereby decline in the demand for the low yielding currency that is US Dollar Index (DX). This erased earlier gains of the index but however ended higher on Monday. US equities ended on positive note taking cues from favorable retail sales data from the nation and thus creating bullish market sentiments. The currency touched a high of 80.05 and closed at 79.81 levels on Monday. The Indian Rupee depreciated around 0.4 percent in the yesterdays trading session. The currency depreciated taking cues from rise in risk aversion in the global markets along with strength in the DX in the early part of the trade. Additionally, more than expected raise in the WPI economic data from the country also added downside pressure on the currency. However, sharp downside in the currency was cushioned as a result of upbeat domestic market sentiments. The currency touched an intra-day low of 53.15 and closed at 53.01 on Monday. For the current month FII inflows totaled at Rs. 10830.50 crores till 15th October 2012. While year to date basis, net capital inflows stood at Rs. 93,161.20 crores till 15th October 2012.

$/Euro (Spot)

1.2948

0.0

-0.2

-1.3

-6.7

Dollar Index

79.81

0.1

0.2

1.2

3.8

NIFTY

5687.3

0.2

0.2

1.4

10.8

SENSEX

18713.6

0.2

0.0

0.9

9.5

DJIA

13424.2

0.7

-1.2

-1.0

15.3

S&P

1440.13

0.8

-1.4

-1.7

17.6

Source: Reuters

Euro ended on a flat note as uncertainty over Spain bailout continued and market participants are eyeing the European summit later in the week. Additionally strength in the DX also restricted sharp gains in the currency. The currency touched a low of 1.2889 and closed at 1.2948 on Monday. Japans Revised Industrial Production declined by 1.6 percent in August as against a previous decline of 1.3 percent a month ago.

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Commodities Daily Report


Tuesday| October 16, 2012

Bullion Gold

International Commodities

Market Highlights - Gold (% change) Spot gold prices declined 1.1 percent as better than expected US economic data might prompt US Federal Reserve to curb stimulus measures. This led to fears amongst market participants and initiated profit booking. Strength in the US Dollar Index also pressurized gold prices. The yellow metal touched an intra-day low of $1,728.75/oz and closed at $1,736.59/oz on Friday. On the MCX, Gold October contract fell 1 percent taking cues from bearishness in the spot gold. However, sharp fall in the prices of Gold on the MCX were cushioned due to depreciation in the Indian Rupee and closed at Rs.30,977/10 gms on Monday after touching an intra-day low of Rs. 30,956/ 10gms.
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Dec12) MCX Gold (Dec12) Unit $/oz Rs/10 gms $/oz Last
1735.5

as on 15 October, 2012 Prev day


-1.0

WoW
-2.2

MoM
-1.4

YoY
3.4

30900.0

-0.8

-0.5

-3.1

16.2

1736.0

-1.7

-2.1

-1.9

3.5

$/oz Rs /10 gms

1736.0

-1.3

-2.1

-1.8

3.2

30977.0

-1.0

-1.1

-2.6

15.2

Source: Reuters

Silver
Market Highlights - Silver (% change) Spot silver prices declined 2.2 percent taking cues from weakness in the spot gold prices along with mixed trend in the base metals. Additionally, strength in the DX also acted as a supportive factor for the downside in the silver prices. The white metal touched an intra-day high of $32.53/oz and closed at $32.69/oz on Monday. In the Indian markets, MCX silver prices fell 2.2 percent tracking bearishness in the spot silver and closed at Rs. 59,959/kg after touching an intra-day low of Rs.59,858/kg on Monday. However, depreciation in the Indian rupee cushioned sharp fall in the MCX Silver prices in yesterdays session.
Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last
32.7 61155.0 3323.0

as on 15 October, 2012 WoW


-3.7 0.2 -1.8

Prev day
-2.2 -0.5 -1.7

MoM
-4.4 -2.9 -3.8

YoY
1.8 14.5 4.4

3270.7

-2.8

-3.8

-4.6

1.8

59959.0

-2.3

-2.5

-6.0

12.5

Source: Reuters

Outlook
In the intraday, we expect precious metals to trade with negative bias as positive US retail sales data have raised fears amongst participants about the stimulus measures to be discontinued. However, firm global market sentiments along with weakness in the DX might cushion sharp fall in the prices. In the domestic markets appreciation in the Indian rupee will cushion sharp fall in the precious metals on the MCX. Technical Outlook
Unit valid for October 16, 2012 Support Resistance

Technical Chart Spot Gold

Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12

$/oz Rs/10 gms $/oz Rs/kg

1730/1724 30870/30760 32.52/32.30 59500/59100

1741/1747 31070/31170 32.90/33.12 60200/60600

Source: Telequote

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Commodities Daily Report


Tuesday| October 16, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices swung between gains and losses and finally ended 0.1 percent lower due to strength in the DX and expectation of decline in demand from major consumers. Further, Iran reiterating an offer to suspend domestic production of medium-enriched uranium before European officials meet to discuss tighter sanctions on the Persian Gulf country also exerted a downside pressure on the crude oil prices. Additionally strength in the DX also added to the losses of the crude oil prices. Crude oil prices touched a low of $89.79/bbl and closed at $91.74/bbl on Monday. On the domestic bourses, prices declined 0.6 percent and closed at Rs.4,832/bbl after touching a low of Rs.4,785/bbl on Monday. API Inventories Forecast The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 1.5 million barrels for the week ending on 12th October 2012. Gasoline stocks are expected to rise by 0.4 million barrels and distillate inventories are expected to drop by 1.3 million barrels for the same week. Outlook We expect crude oil prices to trade on bearish note owing to sufficient supplies and weaker demand. Further, strength in the DX might exert downside pressure on the crude oil prices. However, weakness in the DX along with upbeat market sentiments might cushion sharp fall in the crude oil prices. On the domestic front appreciation in the Indian Rupee will exert downside in the crude oil prices on the MCX. Technical Outlook
valid for October 16, 2012

Market Highlights - Crude Oil (% change)


Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Nov12) ICE Brent Crude (Nov12) MCX Crude (Oct12) Unit $/bbl $/bbl Last
91.8 115.8

as on 15 October, 2012 WoW


2.7 2.4

Prev. day
0.0 0.1

MoM
-4.9 -0.9

YoY
5.6 0.4

$/bbl

91.9

0.0

2.8

-4.9

5.8

$/bbl

115.8

1.0

3.6

1.8

1.0

Rs/bbl

4832.0

-0.4

2.8

-8.4

13.5

Source: Reuters

Market Highlights - Natural Gas (% change)


Natural Gas (NG) Nymex NG MCX NG (Oct12)

as on 15 October, 2012

Unit $/mmbtu Rs/ mmbtu

Last
3.488 185.5

Prev. day
-3.00 -2.37

WoW
2.68 6.06

MoM
18.48 16.16

YoY
-5.55 2.20

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

Unit

Support

Resistance

NYMEX Crude Oil

$/bbl

90.45/89.70

92.35/93.30

MCX Crude Oct12

Rs/bbl

4770/4730

4870/4920

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Commodities Daily Report


Tuesday| October 16, 2012

International Commodities
Base Metals
The base metals pack traded on a mixed note in the yesterdays trading session on the back of mixed LME inventories along with strength in the DX. However, sharp downside in the prices was cushioned as a result of rise in risk aversion in the global market sentiments. In the Indian markets, depreciation in the Rupee prevented further downside in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum Rs /kg
104.2 -0.6 -4.1 -9.9 -3.8

as on 15 October, 2012 WoW


-0.7

Last
8126.3

Prev. day
0.1

MoM
-2.0

YoY
7.5

$/tonne

Rs/kg

434.8

0.0

0.3

-4.1

16.9

$/tonne

1973.0

-0.7

-5.1

-8.5

-11.4

Copper
Copper, the leader of the base metals complex swung between gains and losses and finally ended 0.1 percent higher due to positive US retail sales data. However, sharp rise in e prices were capped on the back of strength in the DX. Worries of substantial demand from the major consuming nation China also capped sharp gains. However, decline in LME Copper inventories by 1.7 percent cushioned sharp fall in the copper prices. LME Copper stocks stood at 212,275 tonnes. The red metal touched an intra-day low $8,050/tonne and closed at $8,126.25/tonne in yesterdays session. On the domestic front, prices ended on a flat note and closed at Rs.434.6/kg after touching a high of Rs.435.7/kg on Monday. Depreciation in the Indian rupee also supported an upside in the copper prices on MCX. Outlook Base metal prices in todays session are expected to trade on a firm note on the back of upbeat global market sentiments along with weakness in the DX. Positive economic data from the Chinese and US might increase demand for the base metals thereby supporting an upside in the prices. However, in the domestic markets appreciation in the Indian rupee will cap sharp gains in the prices of base metals on MCX. 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 16, 2012 Support 432.0/430.0 99.80/99.0 111.40/110.80 103.70/103.20 904/897 Resistance 436.50/439.0 101.10/101.80 112.70/113.50 104.80/105.40 917/927

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

$/tonne

17152.0

-0.1

-5.1

-5.2

-9.4

Rs /kg

912.4

0.2

-4.0

-6.5

-1.8

$/tonne

2117.0

-1.1

-6.2

-6.0

4.6

Rs /kg

112.1

-1.1

-5.0

-7.4

13.5

$/tonne

1918.0

-0.7

-5.7

-8.0

-0.5

Rs /kg

100.5

-0.9

-5.3

-9.8

6.6

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 15th October
212,275 5,064,950 126,342 1,036,625 301,700

12th October
215,900 5,069,575 124,608 1,011,975 296,725

Actual Change
-3,625 -4,625 1,734 24,650 4,975

(%) Change
-1.7 -0.1 1.4 2.4 1.7 Source: Reuters

Technical Chart MCX Copper

Source: Telequote

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Commodities Daily Report


Tuesday| October 16, 2012

International Commodities
Important Events for Today

Indicator FOMC Member Williams Speaks CPI y/y PPI Input m/m RPI y/y German ZEW Economic Sentiment CPI y/y Core CPI y/y ZEW Economic Sentiment BOE Inflation Letter Core CPI m/m CPI m/m TIC Long-Term Purchases Capacity Utilization Rate Industrial Production m/m

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

Time (IST) 6:00am 2:00pm 2:00pm 2:00pm 2:30pm 2:30pm 2:30pm 2:30pm Tentative 6:00pm 6:00pm 6:30pm 6:45pm 6:45pm

Actual -

Forecast 2.2% 0.0% 2.6% -14.6 2.7% 1.6% -1.1 0.2% 0.4% 45.3B 78.4% 0.3%

Previous 2.5% 2.0% 2.9% -18.2 2.7% 1.5% -3.8 0.1% 0.6% 67.0B 78.2% -1.2%

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

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