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Commodities Daily Report

Thursday| December 20, 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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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. T his 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
Thursday| December 20, 2012

International Commodities
Overview
US Housing Starts declined to 0.86M in the last month German Ifo Business Climate rose to 102.4-mark in December. US Building Permits increased to 0.90M in the month of November. UK CBI Realized Sales fell to 19 levels in December. Euro region Current Account gained to 3.91B euros in the October. Asian markets are trading on a bearish note taking cues from differences amongst US law makers over the fiscal cliff issue and thereby rise in the risk aversion in the global markets. Market participants are adopting a cautious approach even though US leaders are still insisting that the issue might be resolved before Christmas. US Building Permits increased by 0.90 million in November as against a previous rise of 0.87 million in October. Housing Starts was at 0.86 million in November from earlier rise of 0.89 million a month ago. China’s Conference Board (CB) Leading Index was at 1.1 percent in November from previous rise of 1.6 percent in October. US Dollar Index (DX) ended on a flat note in yesterday’s session. The index witnessed weak trend in the early part of the day due to optimism that US law makers might be able to resolve the fiscal cliff issue of the nation. Further, more than expected favorable data from the Euro zone also exerted downside pressure on the index. However, with reemergence of differences amongst the US lawmakers towards the end of the session caused the index to erase the earlier losses and increased the demand for the low yielding currency that is US Dollar Index (DX). US equities settled on a negative note in yesterday’s session. Equities had earlier witnessed firm trend taking cues from positive signs of progress amongst the US law makers over the fiscal cliff issue of the nation. However, towards the end of the session differences amongst the law makers over the fiscal cliff caused the stocks to erase the earlier gains and settle in red. Even the positive economic data from the nation was overshadowed due to the stall in the talks between the Congress and the Republicans. The index touched an intra-day low of 79.02 and closed at 79.40 on Wednesday. The Indian Rupee appreciated 0.5 percent on Wednesday taking cues from positive global market sentiments along with weakness in the DX. Fresh selling of dollars and hopes of more capital coming into banking sector after the passage of the banking reform in the parliament also supported appreciation in the currency. Continued foreign inflows also supported appreciation in the currency in yesterday’s session. The rupee closed at 54.67 after touching a high of 54.50 on Wednesday. For the current month FII inflows totaled at Rs. 16,222.60 crores till 198th December 2012. While year to date basis, net capital inflows stood at Rs. 1,19,494.60 crores till December 19th 2012.

Market Highlights (% change)
Last INR/$ (Spot)
54.67

as on 19 December, 2012

Prev day
0.5

w-o-w
-1.0

m-o-m
0.5

y-o-y
-3.6

$/Euro (Spot)

1.3226

0.0

1.2

3.2

1.8

Dollar Index

79.40

0.0

-0.5

-1.9

-1.0

NIFTY

5929.6

0.6

0.7

6.4

28.5

SENSEX

19476.0

0.6

0.6

6.2

26.6

DJIA

13251.97

-0.7

0.0

3.6

12.6

S&P

1435.8

-0.8

0.5

3.5

19.1

Source: Reuters

Euro ended on a flat note on the back of upbeat global market sentiments along with weakness in the DX. Additionally more than expected favorable data from the Germany also supported an upside in the Euro. However, with re-emergence of differences amongst the US law makers over the fiscal cliff issue caused the US Dollar Index to strengthen and erased the gains made during the day and settled on a flat note on Wednesday. The currency touched an intra-day high of 1.3308 and closed at 1.3226 on Wednesday. German Ifo Business Climate rose by 1 point to 102.4-mark in December as against a rise of 101.4-level in November. European Current Account was at a surplus of 3.9 billion Euros in October from earlier surplus of 2.4 billion Euros a month ago.

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Commodities Daily Report
Thursday| December 20, 2012

Bullion Gold

International Commodities

Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Feb’13) MCX Gold (Feb’13) Unit $/oz Rs/10 gms $/oz
1666.5 -0.2 30600.0 -1.6

as on 19 December, 2012 Prev day
-0.2

Spot gold prices fell 0.2 percent on the back of weak global market sentiments after the discussions over the US fiscal cliff issue again stalled due to differences amongst the lawmakers in yesterday’s session. However, some strength was seen in the early part of the trade yesterday as budget talks amongst the US law makers were seeming to show signs that the fiscal cliff might be averted. Investors adopted a cautious approach and this resulted in selling pressure on the yellow metal. Rise in the risk aversion caused the US Dollar Index to gain in the later part of the day which also acted as a bearish factor for the gold prices on Wednesday. The yellow metal touched an intra-day low of $1,663.04/oz and closed at $1,666.6 per ounce on Wednesday. On the MCX, Gold February contract ended 0.8 percent lower taking cues from weakness in the spot gold prices. Gold prices on the MCX closed at Rs.30,819/10 gms on Wednesday after touching a low of Rs. 30,760/ 10gms. Appreciation in the Indian rupee also weighed on the gold prices on MCX.

Last
1666.6

WoW
-2.6 -1.4

MoM
-3.8 -3.5

YoY
4.6 12.0

1665.0

-1.7

-3.0

-3.8

4.2

-2.9

-3.9

4.5

$/oz Rs /10 gms
30819.0 -0.8 -1.8 -2.8 11.3

Source: Reuters

Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Mar’13) MCX Silver (Mar’13) Unit $/oz Rs/1 kg $/oz
3104.5 -1.7 60200.0 3137.0 -2.5 -3.1

as on 19 December, 2012 WoW
-7.3

Last
31.0

Prev day
-2.0

MoM
-6.4

YoY
7.8

Silver
Spot silver prices declined 2 percent taking cues from trend in the spot gold prices along with bearishness in the base metals pack. Weakness in the DX also acted as a bearish factor for the silver prices. The white metal touched an intra-day low of $30.99/oz and closed at $31.0 per oz on Wednesday. In the Indian markets, MCX silver prices fell 1.8 percent and closed at Rs. 59,607/kg on Wednesday and touched an intra-day low of Rs.59,525/ kg. Appreciation in the Indian rupee also pushed silver prices on MCX downwards.

-3.4 -5.2 -7.9

#N/A -4.0 -6.4

15.2 9.0 7.7

$/ oz
59607.0 -1.8 -5.7 -3.2 12.5

Rs / kg
Source: Reuters

Outlook
In today’s session, we expect precious metals to trade with bearish note due to risk aversion in the global markets after differences amongst the law makers over the fiscal cliff issue stalled. Strength in the DX is also expected to exert downside pressure on the gold prices. In the domestic markets however, depreciation in the Rupee will cushion fall in MCX precious metal. Technical Outlook
Unit Spot Gold MCX Gold Feb’13 Spot Silver MCX Silver Mar’13 $/oz Rs/10 gms $/oz Rs/kg valid for December 20, 2012 Support 1662/1655 30712/30605 30.71/30.41 59200/58800 Resistance 1674/1683 30916/31021 31.25/31.55 60020/60400

Technical Chart – Spot Gold

Source: Telequote

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Commodities Daily Report
Thursday| December 20, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices gained around 1.9 percent yesterday taking cues from decline in US crude oil inventories. Additionally, weakness in the DX in the most part of the trade yesterday also supported an upside in the crude oil prices. However, sharp upside in the prices was capped as a result of differences amongst US law makers over the fiscal cliff issue. Crude oil prices touched an intra-day high of $89.90/bbl and closed at $89.51/bbl in yesterday’s trading session. On the domestic bourses, prices rose by 2.5 percent and closed at Rs.4,947/bbl after touching an intra-day high of Rs.4,958/bbl on Wednesday. Appreciation in the rupee capped sharp gains on the MCX. EIA Inventories data As per the US Energy Department (EIA) report last night, US crude oil inventories declined as expected by 964,000 barrels to 371.60 million barrels for the week ending on 14th December 2012. Gasoline stocks rose by 2.21 million barrels to 219.30 million barrels and whereas distillate stockpiles slipped by 1.09 million barrels to 117.0 million barrels for the last week. 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 decline by 73 billion cubic feet (bcf) for the week ending on 14th December 2012. Outlook In the intra-day we expect crude oil prices to trade with a negative bias owing to weak global market sentiments along with strength in the DX. Differences in opinions amongst the US law makers over the fiscal cliff issue are causing investors to adopt cautious approach and thus resulting into risk aversion. In the domestic market depreciation in the rupee is likely to cushion fall in the crude oil prices on MCX. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Jan’13) ICE Brent Crude (Jan’13) MCX Crude (Dec’12) Unit $/bbl $/bbl $/bbl
110.4 1.4 0.8 -1.2 6.5

as on 19 December,2012 WoW
3.2 1.9 3.2

Last
89.1 113.2 89.5

Prev. day
1.9 1.3 1.8

MoM
0.0 1.9 0.3

YoY
-5.1 7.3 -4.7

$/bbl
4947.0 2.5 4.6 0.3 -0.7

Rs/bbl
Source: Reuters

Market Highlights - Natural Gas (% change)
Natural Gas (NG) Nymex NG MCX NG (Dec ’12) Unit $/mmbtu Rs/ mmbtu Last 3.337 183 Prev. day -2.37 -2.19

as on 19 December, 2012

WoW -1.33 -0.54

MoM -10.27 -11.29

YoY 7.78 10.57

Source: Reuters

Technical Chart – Nymex Crude Oil

Source: Telequote

Technical Chart – Nymex Natural Gas

Technical Outlook
Unit NYMEX Crude Oil MCX Crude Jan ’13 $/bbl Rs/bbl

valid for December 20, 2012

Support 89.25/88.50 4882/4920

Resistance 90.60/91.50 4984/5002

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Commodities Daily Report
Thursday| December 20, 2012

International Commodities
Base Metals
The base metals pack traded on a bearish note taking cues from the weak global market sentiments after talks amongst the US law makers over the fiscal cliff issue stalled. This caused risk aversion in the global markets and made investors to adopt cautious approach. Further decline in the Housing starts economic data from the US also exerted downside pressure on the base metals. Copper, Aluminium, Zinc ending in negative territory while lead and nickel posted modest gains in yesterday’s session. MCX base metals prices traced the international prices along with appreciation in the Indian rupee and ended on a negative note. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb’13) LME Aluminum (3 month) MCX Aluminum (Dec’12) LME Nickel $/tonne
17800.0 0.2 0.2 8.4 -3.3

as on 19 December, 2012 WoW
-2.8

Last
7922.0

Prev. day
-1.1

MoM
1.8

YoY
8.6

$/tonne

Rs/kg

439.5

-1.6

-1.7

2.9

12.4

$/tonne

2087.5

-0.5

-2.7

5.6

5.8

Rs /kg

112.7

-1.4

-2.0

4.4

8.0

Copper
Copper prices declined 1.1 percent in yesterday’s session and closed at $7,922/tonne on Wednesday on account of concerns of fiscal cliff as it nears the end as the discussion over the issue stalled after differences in the opinion. Also, rise in the copper inventories caused the prices to decline yesterday. Copper inventories on LME increased by 1.5 percent in yesterday’s session and stood at 304,900 tonnes on Wednesday as against th 300,500 tonnes on 19 December 2012. Prices of Copper on LME touched an intra-day low of $7,900 per tonne on Wednesday. In the domestic markets, MCX copper fell 1.6 percent tracking the global prices. Appreciation in the Indian rupee exerted downside pressure on the copper prices. In the domestic markets prices of Copper on MCX touched an intra-day low of Rs. 438.4per kg and closed at Rs. 439.5 per kg on Wednesday. Outlook From the intraday perspective, we expect base metals to trade lower due to weak global market sentiments along with strength in the DX. Weak housing starts economic data from the US amidst unresolved fiscal issue is expected to exert downside pressure on the base metals pack today. Depreciation in the Rupee will cushion fall in the base metal prices on MCX. Technical Outlook
Unit MCX Copper Feb’13 MCX Zinc Dec’12 MCX Lead Dec’12 MCX Aluminum Dec’12 MCX Nickel Dec’12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for December 20, 2012 Support 436.50/433.50 111.80/111.30 125.95/124.95 112.05/111.40 964.2/957 Resistance 441.30/444.20 112.90/113.50 127.7/128.35 113.25/113.90

(3 month) MCX Nickel (Dec’12) LME Lead (3 month) MCX Lead (Dec’12) LME Zinc (3 month) MCX Zinc (Dec’12)
Source: Reuters

Rs /kg

969.7

-0.5

0.7

7.9

-1.1

$/tonne

2337.0

1.0

0.5

6.6

20.5

Rs /kg

127.0

0.4

1.7

5.3

23.3

$/tonne

2080.0

-0.3

-0.6

6.9

12.6

Rs /kg

112.3

-0.8

-0.1

6.5

14.4

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 19th December
304900 5240725 138330 1227175 335750

18th December
300500 5238450 137388 1228700 338150

Actual Change 4,400 2,275 942 -1,525 -2,400

(%) Change 1.5 0.0 0.7 -0.1 -0.7
Source: Reuters

Technical Chart – LME Copper

Source: Telequote

978/986

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Commodities Daily Report
Thursday| December 20, 2012

International Commodities
Important Events for Today

Indicator Monetary Policy Statement Overnight Call Rate BOJ Press Conference German PPI m/m Retail Sales m/m Unemployment Claims Final GDP q/q Belgium NBB Business Climate Existing Home Sales Philly Fed Manufacturing Index

Country Japan Japan Japan Euro UK US US Euro US US

Time (IST) Tentative Tentative Tentative 12:30pm 3:00pm 7:00pm 7:00pm 7:30pm 8:30pm 8:30pm

Actual -

Forecast <0.10% -0.1% 0.3% 358K 2.8% -13.1 4.85M -2.7

Previous <0.10% 0.0% -0.8% 343K 2.7% -13.4 4.79M -10.7

Impact High High High Medium High High Medium Medium High High

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