Commodities Daily Report

Monday| June 17, 17 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
Monday| June 17, 17 2013

International Commodities
Overview
• • • • RBI Monetary Policy Review at 11.00am today. India’s WPI inflation declined to 4.7 percent in the last month. Prelim UoM Consumer Sentiment declined to 82.7 82.7-mark in June. European CPI remained unchanged at 1.4 percent in May.

Market Highlights (% change)
Last INR/$ (Spot) 57.49 Prev day 0.9

as on 14 June, 2013 w-o-w -0.8 m-o-m -4.9 y-o-y -3.7

Asian markets are trading higher today, ahead of major monetary policy decisions of the Reserve Bank of India (RBI), that is scheduled for today today. The Federal Reserve’s two-day meeting will begin tomorrow and the world’s largest central bank would announce its decision on Wednesday. Both these decisions are important from the Indian market point of view, as the RBI’s meeting would set a tone from the domestic perspective, while the Fed’s decision or statement will help the Indian markets take further course accordingly. US Producer Price Index (PPI) increased by 0.5 percent in May as against a decline of 0.7 percent in April. Current Account was at a deficit of $106 billion in Q1 of 2013 from previous deficit of $102 billion in Q4 of 2012. Consumer Sentiments in the US declined by 1.8 8 points to 82.7 82.7-mark in June, when compared to rise of 84.5-level in May. India’s Wholesale Price Index (WPI) inflation declined to 4.7 percent in May as against a rise of 4.89 percent in April. WPI fuel index dropped to 7.32 percent in May from previous s rise of 8.8 percent a month ago. WPI food inflation rose to 8.25 percent in last month as compared to 6.1 percent in April. WPI manufacturing inflation fell to 3.11 percent in May with respect to rise of 3.41 percent in earlier month. The US Dollar Index (DX) declined 1.2 percent in the last week on the back of better than forecast retail sales and jobless claims data from the US. Risk aversion was seen in the global markets last week, but the currency continued to trade lower as expectations with resp respect to the withdrawal of the Fed’s stimulus measures continues. The DX touched a weekly low of 80.51 and closed at 80.65 on Friday. On a weekly basis, Indian Rupee depreciated 0.8 percent on account of cut in the growth outlook of the economy to 5.7 perce percent by World Bank. Further, weak global and domestic markets coupled with unfavorable industrial production and manufacturing output data from the country added downside pressure on the currency. However, sharp downside in the Rupee was cushioned as a res result of weakness in the DX along with favorable inflation data from the economy. The currency touched a low of 58.98 in the last week and closed at 57.49 against dollar on Friday. For the month of June 2013, FII outflows totaled at Rs.1,457.70 crores th ($244.39 million) as on 14 June 2013. Year to date basis, net capital th inflows stood at Rs.81,747.40 crores ($15,108.60 million) till 14 June 2013.

$/Euro (Spot)

1.3346

-0.2 0.2

0.9

3.6

5.6

Dollar Index NIFTY

80.65

-0.1 0.1

-1.2

-4.4

1.5

5808.4

1.9

-1.2

-5.5

14.9

SENSEX

19177.9

1.9

-1.3

-5.1

4.9

DJIA

15070.2

-0.7 0.7

-1.2

-1.9

19.1

S&P

1626.7

-0.6 0.6

-1.0

-1.4

22.4

Source: Reuters

The Euro appreciated 0.9 percent in the last week on the back of weakness in the DX. Further, favorable industrial production data from the region supported an upside in the currency. The Euro touched a weekly high of 1.339 and closed at 1.3346 against the dollar on Friday. . However, sharp upside in Euro was capped on account of weak global markets coupled with cut in the economic outlook by the World Bank for the Euro Zone. European Consumer Price Index (CPI) remained unchanged at 1.4 percent in the month of May. Core CPI rose to 1.2 percent in May from earlier rise of 1 percent a month ago. Employment Change fell by 0.5 percent in Q1 of 2013 with respect to earlier fall of 0.3 percent in Q4 of 2012.

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Commodities Daily Report
Monday| June 17, 17 2013

International Commodities
Bullion Gold
Spot gold prices gained around 0.5 percent in the last week on the back of rise in risk aversion in the global markets which led to increase in safe haven demand. Further, weakness in the DX supported an upside in prices. The yellow metal touched a weekly high of $1394.66/oz and closed at $1390.20/oz in last trading session of the week. However, sharp upside in the prices was capped as a result of expectations of Fed keeping interest rates lower coupled with uncertainty over the Federal Reserve of reducing its bond buying program. In the Indian markets, prices ended on a positive note, increasing 1 percent on account of depreciation in the Rupee and closed at Rs.27811/10 gms on Friday after touching a high of Rs. 28288 28288/10 gms in the last week. Holdings in the SPDR Gold Trust declined by 0.4 4 percent to 1,003 1,003.53 th tonnes as on 14 June 2013 from previous level of 1,007.14 tonnes as th on 7 June 2013. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1390.2 Prev. day 0.3 as on 14 June, 2013 WoW 0.5 MoM -0.2 YoY -14.5

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (August’13) MCX Gold (August’13)

Rs/10 gms $/oz

27550.0

-1.2

-1.1

4.4

-8.5

1391.3

0.5

0.4

-1.3

-14.5

$/oz

1387.3

0.7

0.1

0.2

-14.3

Rs /10 gms

27811.0

0.2

1.0

5.7

-7.7

Source: Reuters

Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (July’13) MCX Silver (July’13) Unit $/oz Rs/1 kg Last 22.0 45000.0 Prev day 1.1 0.4

as on 14 June, 2013 WoW 1.8 -1.1 MoM -2.3 0.6 YoY -23.2 -18.5

Silver
Taking cues from rise in gold prices along with weakness in the DX DX, Spot silver prices rose 1.8 percent in the last week. . The white metal touched a weekly high of $22.30/oz 30/oz and closed at $22. $22.04/oz in the last trade of the week. However, sharp upside side in prices was prevented on account of fall in base metals group. On the domestic front, prices gained 1.8 percent as a result of depreciation in the Indian Rupee and closed at Rs.43, Rs.43,788/kg on Friday after touching a high of Rs.44,499/kg in the last week. . Holdings in the iShares Silver Trust gained marginally by 0.1 percent to th th 9,998.93 tonnes on 14 June 2013 from 9,988.42 tonnes on 7 June 2013.

$/oz $/ oz

2169.0 22.0

-0.6 1.7

-4.0 1.0

-5.2 -1.7

-24.3 -22.7

Rs / kg

43788.0

1.3

1.8

1.1

-19.7

Source: Reuters

Technical Chart – Spot Gold

Outlook
Precious metals are likely to trade on a negative note today as the Dollar Index is expected to strengthen due to ongoing expectations of Fed’s monetary stimulus pullback. Prices on the MCX are expected to trade slightly higher as the Rupee is expected to trade largely with a depreciation bias. But decision by the RBI at its 11.00am monetary policy decision today will provide further direction to the Rupee and in turn to the precious metals on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Aug’13 Spot Silver MCX Silver July’13 $/oz Rs/10 gms $/oz Rs/kg valid for June 1 17, 2013
Source: Telequote

Support 1383/1376 27740/27600 21.80/21.60 43400/43000

Resistance 1395/1401 27980/28100 22.20/22.40 44200/44600

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Commodities Daily Report
Monday| June 17, 17 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 1.9 percent in the last week, taking cues from weakness in the DX. Additionally, favorable economic data from US coupled with protests in the Turkey creating supply concerns acted as a positive factor. Additionally, expectations of cut in the crude oil output from Libya also supported d an upside in the prices. Crude oil prices touched a weekly high of $98.25/bbl 25/bbl and closed at $97.85/bbl in the last trading session of the week. However, sharp upside in prices was capped as a result of unexpected rise in US crude oil inventories along with ith rise in OPEC production production. On the domestic bourses, prices gained 2.4 percent and the commodity closed at Rs.5,643/bbl on Friday after touching a high of Rs.5, Rs.5,648/bbl in the last week. . Depreciation in the Rupee supported an upside in prices on the MCX. Market Highlights - Crude Oil (% change)
Crude Oil Brent (Spot) Nymex Crude (July ’13) ICE Brent Crude (July’13) MCX Crude (June ’13) Unit $/bbl $/bbl Last 104.1 97.9 Prev. day -0.2 1.2 WoW -0.2 1.9 as on 14 June, 2013 MoM 2.4 1.9 YoY 6.4 16.6

$/bbl

105.9

1.6

1.3

2.2

8.5

Rs/bbl

5643.0

1.3

2.4

9.4

20.9

Source: Reuters

Market Highlights - Natural Gas (% change)
Natural Gas (NG) Nymex NG MCX NG (June ’13)

as on 14 June, 2013

Unit $/mmbtu Rs/ mmbtu

Last 3.755 216.3

Prev. day -1.8 -2.2

WoW -1.78 -1.68

MoM -6.59 -1.32

YoY 48.48 58.81

Natural Gas
On a weekly basis, Nymex natural gas prices declined around 1.8 percent on the back of forecast of warm weather conditions. However, sharp downside in prices was cushioned as a result of less than expected rise in US natural gas inventories coupled with weakness in the DX. Gas prices touched a weekly low of $3.71/mmbtu /mmbtu and closed at $3.755/mmbtu in the last trade of the week. On the domestic front, prices dropped 1.7 percent and closed at Rs.216.30/mmbtu after touching a low of Rs.215.10/mmbtu 0/mmbtu in the last week. Depreciation in the Rupee prevented sharp fall in prices on the MCX. Outlook For today’s trade, crude oil prices in the international markets are expected to trade on a higher note on the back of upbeat global markets. Further, unrest in Syria and other parts of the Middle East lead to supply concerns from the region, , thus supporting upside. Technical Outlook
Unit NYMEX Crude Oil MCX Crude June’13 $/bbl Rs/bbl valid for June 17, 2013 Support 96.60/95.50 5610/5550 Resistance 98.50/99.50 5720/5780

Source: Reuters

Technical Chart – NYMEX Crude Oil

Source: Telequote

Technical Chart – NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report
Monday| June 17, 17 2013

International Commodities
Base Metals
The base metals pack traded lower in the last week on the back of weak global markets, , slow industrial production in China along with fall in the US consumer sentiments. Additionally, mixed inventories from LME and Shanghai also added downside pressure on prices. However, sharp downside in prices was cushioned on account of weakness in the DX along with favourable retail sales and jobless claims data from US. Further, favourable economic data from Euro Zone restricted fall in prices. In the Indian markets, depreciation in the Rupee prevented fall in prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (June’13) LME Aluminum (3 month) MCX Aluminum (June’13) LME Nickel (3 month) MCX Nickel (June’13) LME Lead (3 month) MCX Lead (June’13) LME Zinc (3 month) MCX Zinc (June’13) Rs /kg 105.8 0.0 -1.7 6.3 0.4 $/tonne 1860.3 0.7 -1.8 1.6 -1.8 Rs /kg 121.5 0.5 -1.8 12.7 14.1 $/tonne 2114.0 1.1 -2.2 7.4 9.9 Rs /kg 826.7 1.0 -4.1 1.3 -11.8 $/tonne 14294.0 1.3 -4.6 -4.0 -15.2 Rs /kg 105.6 -0.6 -3.5 5.3 -0.7 $/tonne 1861.5 0.1 -3.7 0.9 -3.8 Rs/kg 407.5 -0.2 -1.7 2.5 -2.3 $/tonne Last 7091.0 Prev. day 0.4 as on 14 June, 2013 WoW -2.0 MoM -9.6 YoY -6.2

Copper
Copper prices fell 2 percent in the last week on the back of weak global markets coupled with rise in LME and Shanghai copper inventories. Further, unfavourable economic data from China and US added downside pressure on prices. The red metal touched a weekly low of $7011.25/tonne and closed at $7091.0/tonne 0/tonne in last trading session of the week. On the domestic front, prices dropped around 1.7 percent and closed at Rs. 407.50/kg, on Friday after touching a low of Rs 4 405.40/kg in the last week. Depreciation preciation in the Rupee prevented sharp fall in prices on the MCX. Copper Inventories Copper inventories over the week increased 1.3 percent on the LME to 618,075 tonnes and on the SHFE, inventories ntories rose 1.1 percent to 183,410 tonnes. Outlook In today’s session, we expect base metal prices to trade with a positive note on the back of upbeat global markets. Additionally, expectations of favourable manufacturing data from the US will act as a positive factor for prices. Technical Outlook
MCX Copper June’13 MCX Zinc June ’13 MCX Lead June ’13 MCX Aluminum June’13 MCX Nickel June ’13 Unit Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for June 17, 201 2013 Support 405/402 105.20/104.20 121.0/120.0 104.80/104.0 822/814 Resistance 410/413 106.80/107.80 122.80/123.50 106.20/107.0 834/842

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 14th June 618,075 5,219,825 183,708 1,087,500 197,350 13th June 608,300 5,206,350 183,672 1,091,625 199,975 Actual Change 9,775 13,475 36 -4,125 -2,625 (%) Change 1.6 0.3 0.0 -0.4 -1.3
Source: Reuters

Technical Chart – LME Copper

Source: Telequote

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Commodities Daily Report
Monday| June 17, 17 2013

International Commodities
Important Events for Today
Indicator Tertiary Industry Activity m/m Empire State Manufacturing Index G8 Meetings Country Japan US All Time (IST) 5:20am 6:00pm Day 1 Actual Forecast 0.2% 0.4 Previous -1.3% 1.3% -1.4 Impact Medium Medium High

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