Commodities Daily Report

Thursday| March 7, 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| March 7, 2013

International Commodities
Overview
US ADP Non-Farm Employment Change declined to 198,000 in Feb. European Revised GDP unchanged at -0.6 percent in Q4 of 2012. US Factory Orders declined by 2 percent in the month of January. UK Halifax HPI increased by 0.5 percent in the last month. Asian markets are trading on a mixed note on the back of better than forecast economic data from US in yesterday’s trade. While on the other hand, decline in profits from Samsung Electronics and Australian banks added downside pressure on the markets. US Automatic Data Processing, Inc. (ADP) Non-Farm Employment Change declined by 17,000 to 198,000 in February as against a rise of 215,000 in January. Factory Orders declined by 2 percent in January from earlier rise of 1.3 percent a month ago. US Dollar Index (DX) appreciated by 0.4 percent in yesterday’s trading session on the back of mixed global market sentiments. In addition, US equities also traded on a mixed note in yesterday’s trade which also acted as a favorable factor for the currency. However, rise in risk appetite in the global market sentiments which led to fall in demand for the low yielding currency capped sharp gains in the DX. The currency touched an intra-day high of 82.64 and closed at 82.51 on Wednesday. The Indian Rupee appreciated by 0.3 percent in yesterday’s trading session. The currency appreciated on the back of selling of dollars from exporters and some custodian banks. Additionally, upbeat global market sentiments coupled with weakness in the DX in the early part of the trade also supported an upside in the currency. However, sharp upside in the currency was capped as result of dollar demand from importers and oil refiners. The Indian Rupee touched an intra-day high of 54.61 and closed at 54.80 against dollar on Wednesday. For the month of March 2013, FII inflows totaled at Rs.65.80 crores th ($8.57 million) as on 6 March 2013. Year to date basis, net capital th inflows stood at Rs.46,563.90 crores ($8,643.20 million) till 6 March 2013. UK’s Halifax House Price Index (HPI) increased by 0.5 percent in February as compared to 0.3 percent decline in January.

Market Highlights (% change)
Last INR/$ (Spot) 54.8 Prev day 0.3

as on 6 March, 2013 w-o-w -1.7 m-o-m -3.1 y-o-y -8.1

$/Euro (Spot)

1.2965

-0.7

-1.3

-4.1

-1.1

Dollar Index NIFTY

82.51

0.4

1.0

3.4

3.8

5818.6

0.6

0.4

-2.4

11.4

SENSEX

19252.6

0.6

0.5

-2.0

5.3

DJIA

14296.2

0.3

1.6

2.2

12.0

S&P

1541.5

0.1

3.0

1.9

14.7

Source: Reuters

The Euro depreciated by 0.7 percent in yesterday’s trade as the revised GDP showed that Euro zone growth declines by 0.6 percent coupled with strength in the DX. However, sharp downside in the currency was cushioned on the back of expectation among the investors that ECB may ease monetary policy. Further, optimistic global market sentiments also prevented depreciation in the currency. European Revised GDP remains unchanged at -0.6 percent in Q4 of 2012.

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Commodities Daily Report
Thursday| March 7, 2013

International Commodities
Bullion Gold
Spot gold prices increased by 0.5 percent in the in yesterday are trading session on the back of expectation among the market participants that major central banks will maintain the stimulus measures to spur growth, which increases the worries over inflation among the investors. Further, mixed economic data from US supported prices. However, optimistic global market sentiments and overall favorable economic data’s from US showing improving US economy pressured gold safe heaven appeal coupled with Strength in DX. The yellow metal touched an intra-day high of $1585/oz and closed at $1583.3/oz on Wednesday trading session. In the Indian markets, prices increased by 0.1 percent yesterday and closed at Rs29593/10 gms after touching an intra-day high of Rs. 29700/10 gms on Wednesday. In the domestic markets upside in the prices was capped on the back of appreciation in the rupee. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April’13) MCX Gold (April’13) Unit $/oz Rs/10 gms $/oz Last 1583.3 29400.0 Prev. day 0.5 -0.7 as on 6 March, 2013 WoW -0.9 -0.4 MoM -5.6 -3.0 YoY -5.4 5.9

1574.0

-0.4

-1.9

-6.0

-5.7

$/oz

1574.6

0.2

-1.3

-6.1

-7.5

Rs /10 gms

29593.0

0.1

-0.5

-3.6

-

Source: Reuters

Silver
Taking cues from rise in gold prices, Spot silver prices ended positive by 1.2 percent on Wednesday. Expectation among the market participants that major central banks will maintain the stimulus measures to spur growth coupled with positive economic data from UK supported prices to trade positive. Further, positive ADP Non-Farm employment change data from US also supported prices. However, sharp upside in prices was cap as the Europe’s revised GDP data showed that growth declined by 0.6 percent coupled with Strength in DX. The white metal prices touched an intra-day high of $29.07/oz and closed at $29.0/oz in yesterday’s trade. On the domestic front, prices ended on a positive note by 2.2 percent and closed at Rs. 54968/kg after touching an intra-day high of Rs. 55500/kg on Wednesday.

Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May’13) MCX Silver (May’13) Unit $/oz Rs/1 kg Last 29.0 55100.0 Prev day 1.2 -0.9

as on 6 March, 2013 WoW 0.1 -1.3 MoM -8.8 -6.3 YoY -11.8 -4.6

$/oz $/ oz

2874.0 2876.0

-0.7 0.7

-1.1 -0.6

-9.3 -9.7

-13.5 -12.2

Rs / kg

54968.0

2.2

2.2

-5.8

-

Source: Reuters

Technical Chart – Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a negative note on the back of mixed global market sentiments. However, expectation of monetary easing by major central banks will cushion the major downfall. In the Indian markets, depreciation in the Indian Rupee will cushion sharp decline in the prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Apr’13 Spot Silver MCX Silver May’13 $/oz Rs/10 gms $/oz Rs/kg valid for March 7, 2013 Support 1576/1572 29520/29440 28.75/28.60 54700/54400 Resistance 1585/1590 29680/29780 29.00/29.20 55200/55500
Source: Telequote

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Commodities Daily Report
Thursday| March 7, 2013

Energy

International Commodities
Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (April ’13) ICE Brent Crude (March’13) MCX Crude (Mar ’13) Unit $/bbl $/bbl $/bbl Last 90.5 111.4 90.4 Prev. day -0.5 -0.1 -0.4 WoW -2.6 -1.7 -2.5 as on 6 March, 2013 MoM -6.2 -5.6 -6.4 YoY -13.6 -12.2 -13.6

Crude Oil
Nymex crude oil prices declined around 0.4 percent yesterday taking cues from more than expected rise in the US crude oil inventories which led to expectations of slowdown in demand for the fuel. Additionally, strength in the DX also exerted downside pressure on the crude oil prices. However, sharp downside in the prices was cushioned as a result of death of the Venezuela’s President Mr. Hugo Chavez which resulted in lowest operation of refineries creating supply concerns. Crude oil prices touched an intra-day low of $89.55/bbl and closed at $90.43/bbl in yesterday’s trading session. On the domestic bourses, prices declined by 0.7 percent as a result of appreciation in the Indian Rupee and closed at Rs.4,940/bbl after touching an intra-day low of Rs.4,925/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories rose more than expectations by 3.8 million barrels to 381.40 million barrels for the week ending on 1st March 2013. Gasoline stocks declined by 0.6 million barrels to 227.90 million barrels and whereas distillate stockpiles fell by 3.8 million barrels to 120.40 million barrels for the last week.

$/bbl

111.1

-0.5

-0.7

-4.9

-9.0

Rs/bbl

4940.0

-0.7

-1.3

-3.9

Source: Reuters

Market Highlights - Natural Gas (% change)
Natural Gas (NG) Nymex NG MCX NG (Mar ’13) Unit $/mmbtu Rs/ mmbtu Last 3.477 192.3 Prev. day -1.42 -2.44

as on 6 March, 2013

WoW 1.79 4.57

MoM 0.96 4.57

YoY 48.40 59.32
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 decline by 135 billion cubic feet (bcf) for the week ending on 1st March 2013. Outlook
SSource: Telequote

In today’s session, we expect crude oil prices to trade with negative bias due to rise in the US crude oil inventories. However, sharp downside in the prices will be cushioned on the back of mixed global market sentiments coupled with supply concerns from Venezuela after the death of their leader. In the Indian markets, depreciation in the Rupee will prevent sharp fall in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude March ’13 $/bbl Rs/bbl valid for March 7, 2013 Support 90.60/89.70 4920/4870 Resistance 90.90/92.70 4990/5030

Technical Chart – NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report
Thursday| March 7, 2013

International Commodities
Base Metals
The base metals pack traded on a negative note in yesterday’s trading session on the back of Europe’s revised GDP data showed that growth declined by 0.6 percent coupled with Strength in DX. Additionally, increase in LME inventories added downside pressure. However, optimistic global market sentiment cushioned the prices from declining. Further, US Federal Reserve Beige book survey showed that US economy is growing at a modest to moderate pace coupled with Positive US job data cushioned the sharp decline in prices. In the Indian markets, appreciation in the Indian Rupee added downside pressure on the prices on MCX platform. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April’13) LME Aluminum (3 month) MCX Aluminum (Mar’13) LME Nickel $/tonne 16550.0 -0.7 -1.2 -9.8 -11.4 Rs /kg 106.3 -1.1 0.2 -3.9 $/tonne 1956.0 -1.1 -3.1 -6.9 -12.4 Rs/kg 427.3 -0.8 1.4 -2.8 $/tonne Last 7706.0 Prev. day -0.9 as on 6 March, 2013 WoW -2.0 MoM -1.8 YoY -6.5

Copper
Copper, the leader of the base metal pack decreased by 0.9 percent yesterday on account of negative economic data from Europe, rise in LME copper inventories by 0.2 percent which stood at 473,750 tonnes coupled with strength in DX. However, sharp downside in prices was capped on expectation of further monetary policy easing by major central banks along with favourable economic data from US. The red metal touched an intraday low of $7,689.25/tonne and closed at $7,706/tonne in yesterday’s trading session. On the domestic front, prices decreased by 0.8 percent after touching an intra-day low of Rs.426.30/kg and closed at Rs.427.30/kg on Wednesday. Appreciation in the Indian Rupee supported prices to trade negative on the MCX. Outlook In the intra-day, we expect base metals prices to trade on the negative note on account of expectation of decline in German factory orders along with expectation of negative US economic data. However, expectation among the market participants that major central banks will maintain the stimulus measures to spur growth coupled with US Federal Reserve survey showed that US economy is growing at a modest to moderate pace may cushion sharp declines. Depreciation in the Indian Rupee will cushion downfall in prices on the MCX. Technical Outlook
Unit MCX Copper April’13 MCX Zinc Mar ’13 MCX Lead Mar ’13 MCX Aluminum Mar’13 MCX Nickel Mar ’13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for March 7, 2013 Support 425/422 107.5/106.8 119.2/118.4 105.6/104.8 904/898 Resistance 429.50/432 109/109.8 120.8/121.5 107/107.8 917/925

(3 month) MCX Nickel (Mar’13) LME Lead (3 month) MCX Lead (Mar’13) LME Zinc (3 month) MCX Zinc (Mar’13)
Source: Reuters

Rs /kg

911.0

-0.5

1.6

-6.5

-

$/tonne

2187.0

-2.0

-5.4

-9.6

5.9

Rs /kg

120.0

-2.0

-3.3

-6.7

-

$/tonne

1982.0

-1.5

-4.9

-8.5

-1.6

Rs /kg

108.3

-1.5

-3.2

-5.4

-

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 6th March 473,750 5,187,925 161,022 1,200,800 287,700 5th March 472,975 5,162,700 160,548 1,193,750 287,100 Actual Change 775 25,225 474 7,050 600 (%) Change 0.2 0.5 0.3 0.6 0.2
Source: Reuters

Technical Chart – LME Copper

Source: Telequote

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Commodities Daily Report
Thursday| March 7, 2013

International Commodities
Important Events for Today
Indicator Beige Book Monetary Policy Statement Overnight Call Rate BOJ Press Conference Spanish 10-y Bond Auction French 10-y Bond Auction German Factory Orders m/m Asset Purchase Facility Official Bank Rate MPC Rate Statement Minimum Bid Rate ECB Press Conference Trade Balance Unemployment Claims Revised Nonfarm Productivity q/q FOMC Member Powell Speaks Country US Japan Japan Japan Europe Europe Europe UK UK UK Europe Europe US US US US Time (IST) 12.30 am Tentative Tentative Tentative Tentative Tentative 4:30pm 5:30pm 5:30pm Tentative 6:15pm 7:00pm 7:00pm 7:00pm 7:00pm 11:45pm Actual Forecast <0.10% 0.6% 375B 0.5% 0.75% -42.8B 354K -1.6% Previous <0.10% 5.20/1.6 2.30/3.1 0.8% 375B 0.5% 0.75% -38.5B 344K -2.0% Impact Medium High High High High Medium Medium High High High High High High High Medium Medium

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