Commodities Daily Report

Tuesday| November 6, 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 Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Tuesday| November 6, 2012

International Commodities
Overview
Spanish Unemployment Change increased to 128,200 in October. UKs Services PMI declined to 50.6-level in the last month. European Sentix Investor Confidence was at -18.8-mark in November Asian markets are trading on a mixed note ahead of US elections today as investors are following a wait and watch stance. US Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) declined by 0.9 points to 54.2-mark in October as against a rise of 55.1-level in September. Indian Finance Minister P Chidambaram stated that government will borrow more money to fund a fiscal deficit which is estimated to be at 5.3 percent in the current fiscal year from previous forecast of 5.1 percent. The additional borrowing to reach the forecast will require another amount of 200 billion Rupees ($3.72 billion). Previously government had pegged gross market borrowing at 5.7 trillion rupees ($106.04 billion) in the current fiscal year to reach the target of 5.1 percent fiscal deficit. US dollar Index swung between gains and losses and finally ended 0.4 percent higher taking cues from mixed global market sentiments and uncertainty over U.S. presidential elections. Further, unfavorable nonmanufacturing data from the U.S economy and Greece struggling to achieve a bailout created bearish market sentiments. This led to rise in the risk aversion amongst market participants and increase in the demand for the low yielding currency that is US Dollar Index (DX). U.S. equities also ended higher taking cues from mixed global market sentiments. The currency touched a high of 80.93 and closed at 80.84 on Monday. The Indian Rupee depreciated by 1.5 percent in the yesterdays trading session. The currency depreciated taking cues from weak global market sentiments on the back of concerns over the Greece bailout along with strength in the DX. Additionally, dollar demand from big iron ore companies and oil importers 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 a low of 54.68 in yesterdays trade and closed at 54.59 on Monday. For the current month FII inflows totaled at Rs. 1,468.40 crores till 5 November 2012. While year to date basis, net capital inflows stood at Rs. th 95,163.30 crores till 5 November 2012.
th

Market Highlights (% change)

Last INR/$ (Spot)
54.59

as on 5 November, 2012

Prev day
-1.5

w-o-w
-0.9

m-o-m
-4.5

y-o-y
-10.0

$/Euro (Spot)

1.2795

-0.3

-0.8

-0.8

-7.4

Dollar Index

80.84

0.4

0.7

1.0

5.2

NIFTY

5704.2

0.1

0.7

-0.5

8.3

SENSEX

18762.9

0.0

0.7

-0.6

7.3

DJIA

13112.4

0.1

0.0

-2.8

8.9

S&P

54.59

-1.5

-0.9

-4.5

-10.0

Source: Reuters

Euro continued to extend losses of the previous day and settled 0.3 percent down as Greece Prime Minister struggles to find political support for measures to achieve bailout. Greece has to undergo further austerity measures to receive the bailout. Further, unfavorable data from the region along with strength in the DX also exerted a downside pressure on the currency. The currency touched an intraday low of 1.2765 and closed at 1.2795 on Monday. Spanish Unemployment Change increased by 48,600 to 128,200 in October as against a rise of 79,600 in September. European Sentix Investor Confidence was at -18.8-mark in November from previous decline of -22.2-level in October.

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Commodities Daily Report

Tuesday| November 6, 2012

Bullion Gold

International Commodities

Spot gold prices swung between gains and losses and finally settled 0.4 percent higher due to improved buying at lower levels after prices fell sharply in the last week. Gold prices had earlier during the day witnessed selling pressure on the back of worries of the Euro zone debt concerns particularly as Greece struggles to achieve a bailout. Strength in the US Dollar Index however, restricted sharp gains in the gold prices. The yellow metal touched an intra-day high of $1,685.96/oz and closed at $1,683.99 on Monday. On the MCX, Gold October contract gained 1.5 percent taking cues from firmness in the spot gold prices along with depreciation of the Indian Rupee. Gold prices on the MCX closed at Rs.30,894/10 gms after touching an intra-day high of Rs. 30,935/ 10gms in yesterdays session.

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 1682.2 $/oz Rs /10 gms 30894.0 1.5 0.2 30600.0 1683.5 -0.3 -0.1 Last 1684.0 Prev day 0.4

as on 5 November, 2012 WoW -1.5 -0.9 -1.4 MoM -5.3 -2.2 -5.2 YoY -4.5 10.1 -4.2

-1.5

-5.4

-4.6

-0.6

-0.3

10.4

Source: Reuters

Silver
Spot silver prices traced spot gold prices and ended 1 percent higher on Monday. Improved buying by the market participants after prices fell sharply in the last two days led spot silver to end on positive note on Monday. However, strength in the DX along with bearishness in the base metals pack restricted sharp gains in the silver prices in yesterdays session. The white metal touched an intra-day high of $31.22/oz and closed at $31.15/oz on Monday. In the Indian markets, MCX silver prices gained 1.6 percent and closed at Rs. 58,574/kg after touching an intra-day high of Rs.58,650/kg in yesterdays session. Prices in the domestic markets also got support from depreciation in the Indian rupee. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg 58574.0 1.6 -1.4 -6.0 3.3 59200.0 3091.0 3111.3 -1.6 -3.2 0.7 -2.5 -2.9 -1.9 -4.2 -11.0 -10.2 4.8 -11.0 -9.8 Last 31.2 Prev day 1.0 as on 5 November, 2012 WoW -1.9 MoM -9.9 YoY -9.6

Outlook
In todays session we expect precious metals to trade on a bearish note due to mixed global market sentiments along with strength in the DX. Continued debt concerns of the Euro zone with uncertainty over the Spain and Greece bailout. In the domestic market depreciation in the Indian rupee is expected to support an upside in the precious metals on MCX. Technical Outlook
Unit Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for November 6, 2012 Support 1677/1671 30770/30650 30.90/30.70 58200/57700 Resistance 1689/1694 30980/31070 31.30/31.50

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

58950/59300

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Commodities Daily Report

Tuesday| November 6, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices increased by 1 percent yesterday taking cues from expectations of rise in demand for the fuel along with restart of refineries in the US East Coast after Hurricane Sandy. Prices increased more in the last fifteen minutes of the trade as gasoline prices jumped and rise in Brent Crude oil prices after delay of shipments in the North Sea. However, sharp upside in the prices was capped as a result of strength in the DX coupled with Presidential elections in the US. Crude oil prices touched an intra-day high of $85.90/bbl and closed at $85.65/bbl in yesterdays trading session. On the domestic bourses, prices gained by 1.2 percent on account of depreciation in the Indian Rupee and closed at Rs.4,665/bbl after touching an intra-day high of Rs.4,688/bbl on Monday. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Dec12) ICE Brent Crude (Dec12) MCX Crude (Nov12) Unit $/bbl $/bbl Last 85.6 106.5 85.7 $/bbl 107.7 $/bbl 4665.0 Rs/bbl
Source: Reuters

as on 5 November, 2012 WoW 0.1 -3.4 0.1 MoM -2.9 -3.0 -2.8 YoY -8.9 -4.4 -9.0

Prev. day 0.9 -1.1 1.0

1.9

-1.6

-0.4

-2.8

0.9

0.4

0.4

1.2

Market Highlights - Natural Gas (% change)

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

as on 5 November, 2012

Unit $/mmbtu Rs/ mmbtu

Last 3.562 195.3

Prev. day 0.42 1.30

WoW -6.51 -6.42

MoM 4.86 11.66

YoY -6.26 4.16

Natural Gas
On a weekly basis, Nymex natural gas prices gained by 4.5 percent on the back of less than expected rise in US natural gas inventories. Additionally, forecast for the cooler winter weather also supported an upside in the prices. However, sharp upside in the prices was capped as a result of strength in the DX and weak global market sentiments. Gas prices touched a weekly low of $3.532/mmbtu and closed at 3.547/mmbtu in the last trading session of the week. On the domestic front, prices gained by 6 percent and closed at Rs.192.80/mmbtu on Friday after touching a low of Rs.192.10/mmbtu during the last week. Outlook In the intra-day, we expect crude oil prices to trade on a negative bias on the back of mixed global market sentiments along with strength in the DX. Continued debt concerns of the Euro zone with uncertainty over Spain and Greece bailout. In the domestic markets depreciation in the Indian rupee is expected to cushion sharp fall in the MCX crude oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Nov 12 $/bbl Rs/bbl valid for November 6, 2012

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

Support 84.77/84.04 4620/4580

Resistance 86.24/86.79 4700/4730

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Commodities Daily Report

Tuesday| November 6, 2012

International Commodities
Base Metals
Base metal prices traded on a bearish note owing to worries that demand might remain weak in the short term despite favourable data from the U.S. and Chinese economy. Further, rise in the LME inventories also added to the losses. Strength in the DX also exerted downside pressure on the base metals prices. In the Indian markets, depreciation in the Rupee cushioned sharp fall in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) $/tonne 1911.0 -0.8 0.3 -8.9 -11.2 Rs/kg 420.7 1.1 -0.1 -4.1 8.0 $/tonne Last 7651.0 as on 5 November, 2012 WoW -0.9 MoM -7.7 YoY -3.2

Prev. day -0.3

Copper
Copper, the leader of the base metals complex declined 0.3 percent on the back of rise in the risk aversion amongst market participants as investors awaited leadership transition in China, the main consumer of the metal. Strength in the DX also exerted a downside pressure on the copper prices on Monday. Additionally, weak non manufacturing data from the US also acted as a bearish factor for the copper prices in yesterdays session. Decline in LME Copper inventories by 0.7 percent however restricted fall in the Copper prices on Monday. LME Copper stocks stood at 2,41,325 tonnes. The red metal touched an intra-day low $7,596/tonne and closed at $7,651/tonne on Monday. On the domestic front, prices gained 1.1 percent and closed at Rs.420.65/kg after touching an intra-day high of Rs.421.1 /kg. Depreciation in the Indian rupee also acted as a supportive factor for the copper prices. Outlook From the intraday perspective, base metal prices are expected to trade on a bearish note due to mixed global market sentiments. Strength in the DX will also exert a downside pressure on the base metals pack. Manufacturing in US growing on a slower note may also exert downside pressure on the copper prices. Depreciation in the Rupee will act as a supportive factor for the base metal prices on MCX. Technical Outlook
Unit MCX Copper Nov12 MCX Zinc Nov12 MCX Lead Nov12 MCX Aluminum Nov12 MCX Nickel Nov12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for November 6, 2012 Support 417/413 100.50/99.70 115.90/115.10 103.80/103.20 867/860 Resistance 422/425 102.0/102.70 117.40/118.20 105.0/105.60

MCX Aluminum (Nov12) LME Nickel (3 month) MCX Nickel (Nov12) LME Lead (3 month) MCX Lead (Nov12) LME Zinc (3 month) MCX Zinc (Nov12)

Rs /kg

104.3

0.4

2.8

-4.5

-1.2

$/tonne

15979.0

0.1

0.2

-13.8

-13.3

Rs /kg

874.5

0.9

1.6

-10.1

-4.5

$/tonne

2126.0

1.5

5.7

-7.5

4.4

Rs /kg

116.8

3.1

7.0

-2.4

16.5

$/tonne

1866.0

-0.1

2.0

-10.0

-4.5

Rs /kg

101.2

1.1

4.5

-6.3

5.0

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 5th November 241,325 247,500 237,721 239,025 237,848 2nd November 242,975 253,175 237,775 239,750 239,498 Actual Change -1,650 -5,675 -54 -725 -1,650 (%) Change -0.7 -2.2 0.0 -0.3 -0.7
Source: Reuters

Technical Chart MCX Copper

Source: Telequote

882/891

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Commodities Daily Report

Tuesday| November 6, 2012

International Commodities
Important Events for Today

Indicator BRC Retail Sales Monitor y/y FOMC Member Williams Speaks Halifax HPI m/m Spanish Services PMI Italian Services PMI Manufacturing Production m/m German Factory Orders m/m NIESR GDP Estimate Presidential Election Congressional Elections

Country UK US UK Euro Euro UK Euro UK US US

Time (IST) 5:31am 6:30am 6 9

th th

Actual -0.1% -

Forecast 0.5% 0.3% -0.3% -

Previous 1.5% -0.4% 40.2 44.5 -1.1% -1.3% 0.8% -

Impact Medium Medium Medium Medium Medium High Medium Medium Medium Medium

1:45pm 2:15pm 3:00pm 4:30pm 8:30pm All Day All Day

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