Commodities Daily Report

Monday| September 16, 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| September 16, 2013

International Commodities
Overview
• • • • Indian Rupee appreciated around 3 percent in the last week. Spot gold and silver prices plunged sharply in prior week. US Core Retail Sales grew at slow pace of 0.1 percent in August. US Prelim UoM Consumer Sentiment fell to 76.8-mark mark in September September.

Market Highlights (% change)
Last INR/$ (Spot) 63.365 Prev day 0.1

as on September 13, 2013 w-o-w 2.9 m-o-m -3.4 y-o-y -12.9

Asian markets are trading higher today on the back of unfavorable economic data from US eased the concerns of QE tapering from Federal Reserve. Further, Lawrence Summers has as withdrawn himself for consideration of next Federal Reserve chairman and making way for Janet Yellen who is in favor of slower reduction of stimulus measures. US Core Retail Sales grew at slow pace of 0.1 percent in August as against a rise of 0.6 percent ent in July. Producer Price Index (PPI) increased to 0.3 percent in August. Retail Sales gained by 0.2 percent in August from 0.4 percent a month ago. Prelim UoM Consumer Sentiment declined by 5.3 points to 76.8-mark mark in September with respect to 82.1 82.1-level in August. Prelim UoM Inflation Expectations increased by 3.2 percent in current month when compared to 3 percent in August. Over the week, the Dollar Index (DX) weakened on the back of rise in risk appetite in the global market sentiments. Further, decl decline in US jobless claims data which was at lowest level since April 2006 acted as a negative factor. However, sharp downside in the currency was cushioned as a result of unfavorable retail sales and consumer sentiments data from US. Additionally, decline in jobless claims data increased concerns of QE tapering from Federal Reserve in its meeting during the week. The DX touched a weekly low of 81.35 and closed at 81.448 on Friday. During the last week, the Rupee appreciated around 3 percent on the back of favorable industrial production and manufacturing output data from the country. Further, decline in country’s inflation data supported an upside in the currency. Additionally, expectations of new measures to be declared by Reserve Bank of India (RBI) Governor ernor acted as a positive factor. Also, weakness in the DX, upbeat global and domestic market sentiments along with increase in FII’s inflows led to positive movement in the currency. The Indian Rupee touched a weekly high of 62.91 and closed at 63.365 on Friday. For the month of September 2013, FII inflows totaled at Rs.6372.20 th crores ($986.41 million) as on 13 September 2013. Year to date basis, th net capital inflows stood at Rs.66542 crores ($12569.70 million) till 13 September 2013.

$/Euro (Spot)

1.3292

0.0

0.9

0.3

3.0

Dollar Index NIFTY

81.45

-0.1 0.1

-0.9

0.2

2.5

5850.6

0.0

1.9

1.9

7.7

SENSEX

19732.8

-0.2 0.2

1.9

1.9

7.9

DJIA

15376.1

0.5

3.0

2.0

13.6

S&P

1688.0

0.3

-0.4

-0.4

15.6

Source: Reuters

The Euro appreciated around 1 percent in the last week due to weakness in the DX. Further, optimistic global market sentiments supported an upside in the currency. However, sharp upside in the currency was restricted as a result of unfavorable economic data from the region. The currency touched a weekly high of 1.3324 and closed at 1.3292 1.3 on Friday. UK’s Rightmove House Price Index (HPI) declined by 1.5 percent in September as against a decline of 1.8 percent in August.

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Commodities Daily Report
Monday| September 16, 2013

International Commodities
Bullion Gold
Week-on-week week fall in gold prices on the MCX have been around 7.2 percent, with the yellow metal touching a low of Rs29,501/10 gms on the futures market. Rupee appreciation is the major factor that is adding downside pressure in the commodity. During the week, Spot Gold prices have dropped around 4.6 percent and tested a low of $1304.56/oz. While overall international factors are acting as a negative factor in gold prices in the short short-term, it the currency factor that is exerting downside pressure in gold prices on the domestic markets. Holdings in the SPDR Gold Trust witnessed a decline by 8.11 metric tonnes to 911.12 tonnes on 13th September’13, marking a fall of around 0.9 percent in the last week. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1326.3 Prev. day 0.5 as on September 13, 2013 WoW -4.6 MoM -0.6 YoY -23.4

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

Rs/10 gms $/oz

29600.0

-2.0

0.7

0.7

-0.7

1318.5

-0.7

-4.9

-0.6

-24.1

$/oz

1308.4

-1.7

-5.7

-4.2

-26.0

Rs /10 gms

29571.0

-1.6

-7.2

1.3

-7.2

Source: Reuters

Silver
Declining around 10 percent on the MCX near-month nth futures contract, silver prices touched a low of Rs49,160/kg. Rupee appreciation coupled with negative cues from gold lead to fall in the white metal. Spot Silver prices during the last week fell 6.8 percent and tested a low of $21.35/oz. The tonnage e of silver bullion bars held by the US silver ETF increased around 30 tonnes, i.e. 0.3 percent to 10,536.70 tonnes till 12th September 2013.

Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Dec’13) MCX Silver (Dec’13) Unit $/oz Rs/1 kg Last 22.2 50240.0 Prev day 2.1 -4.1

as on September 13, 2013 WoW -6.8 6.9 MoM 1.7 6.9 YoY -33.3 -8.2

$/oz $/ oz

2172.0 21.7

-4.2 -1.9

-5.8 -8.4

1.0 -6.4

-36.0 -37.4

Rs / kg

49410.0

-2.1

-9.9

6.1

-21.9

Outlook
Over today’s trade, precious metals are expected to trade with a mixed note on the back of ease in concerns in QE tapering from Federal Reserve in its meeting during the week. Further, weakness in the DX will support an upside in prices. However, sharp upside in prices will be capped as a result of fall in SPDR gold holdings. In the Indian marke markets, appreciation in the Rupee will cap sharp upside in prices. Technical Outlook
Unit Spot Gold MCX Gold Oct’13 Spot Silver MCX Silver Dec’13 $/oz Rs/10 gms $/oz Rs/kg valid for September 16 16, 2013 Support 1320/1310 29900/29700 21.90/21.60 50100/49500 Resistance 1338/1345

Source: Reuters

Technical Chart – Spot Gold

Source: Telequote

30300/30400 22.30/22.40 51000/51400

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Commodities Daily Report
Monday| September 16, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by more than 2 percent in the last week on the back of easing geopolitical tensions in Syria after US and Russia meet to discuss a plan for Syria to surrender its chemical weapons. Further, favorable US jobless claims data increased ncreased concerns of QE tapering from Federal Reserve meeting during the week exerted downside pressure on prices. However, sharp downside in prices was cushioned on account of decline in US crude oil inventories. Further, weakness in the DX also restric restricted sharp downside in prices. Crude oil prices touched a weekly low of $106.39/bbl and closed at $108.21/bbl in last trading session of the week. On the domestic bourses, prices dropped 4.8 percent due to Rupee appreciation and closed at Rs.6831/bbl on Friday iday after touching a low of Rs. 6845/bbl in the previous week. Market Highlights - Crude Oil (% change)
Crude Oil Brent (Spot) Nymex Crude (Oct ’13) ICE Brent Crude (Sep’13) MCX Crude (Sep ’13) Unit $/bbl $/bbl Last 115.3 108.2 Prev. day 0.2 -0.4 as on September 13, 2013 WoW -3.2 -2.1 MoM 2.7 0.7 YoY -0.1 10.1

$/bbl

112.8

0.1

-2.9

2.3

-2.7

Rs/bbl

6831.0

-1.6

-4.8

4.6

27.6

Source: Reuters

Market Highlights - Natural Gas (% change)
Natural Gas (NG) Nymex NG MCX NG (Sep ’13) Unit $/mmbtu Rs/ mmbtu Last 3.676 233.5 Prev. day 1.2 0.4

as on September 13, 2013 MoM 11.53 15.42 YoY 21.56 41.69
Source: Reuters

WoW 2.85 0.95

Natural Gas
On a weekly basis, Nymex natural gas prices gained by more than 4 percent on account of less than expected rise in US natural gas inventories. Further, weakness in the DX supported an upside in prices. Gas prices touched a weekly high of $3.689/mmbtu and closed at $3.676/mmbtu in last trade of the week. On the domestic front, prices rose 1.7 percent and closed at Rs.233.5/mmbtu on Friday after touching a high of Rs.235.30/ Rs.235.30/mmbtu in last week. Rupee appreciation capped sharp gains in the prices. Outlook From the intra-day day perspective, we expect crude oil prices to trade on a lower note on the back of ease in Syria tensions, , after US and Russia meet on plan regarding how to get the chemical weapons back from Syria. However, sharp downside will be cushioned as a result of ease in concerns regarding QE tapering from the Federal Reserve in its meeting during the week. Additionally, upbeat global market sentiments along with weakness in the DX will restrict sharp fall in the prices prices. In the Indian markets, appreciation in the Rupee will exert downside pressure in prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Sep’13 $/bbl Rs/bbl valid for September 16 16, 2013 Support 107.60/106.60 6860/6800 Resistance 109.60/110.40 6990/7040

Technical Chart – NYMEX Crude Oil

Source: Telequote

Technical Chart – NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report
Monday| September 16, 2013

International Commodities
Base Metals
Market Highlights - Base Metals (% change) Base metals pack on the LME traded on a negative note in the last week due to concerns regarding QE taper which could be announced in the FOMC meeting this week and mixed economic data from the advanced economies. However, weakness in the DX and decline in inventories prevented sharp decline in the base metals on the LME. In the Indian markets, the base metals declined sharply in the range of 3-6 percent due to Rupee appreciation.
Unit LME Copper (3 month) MCX Copper (Nov’13) LME Aluminum (3 month) MCX Aluminum (Sep’13) LME Nickel (3 month) MCX Nickel (Sep’13) LME Lead (3 month) MCX Lead (Sep’13) Rs /kg 131.1 -2.6 -5.5 -2.9 12.5 $/tonne 2085.5 -1.9 -2.8 -5.7 -1.6 Rs /kg 876.3 -0.3 -3.0 -3.6 -4.8 $/tonne 13847.0 0.1 -0.6 -6.8 -16.8 Rs /kg 111.7 -1.5 -4.0 -2.0 -2.1 $/tonne 1795.0 -1.0 -1.5 -5.2 -13.7 Rs/kg 456.4 -0.6 -3.8 1.2 0.9 $/tonne Last 7064.0 as on September 13, 2013 WoW -1.3 MoM -10.0 YoY -12.5

Prev. day -0.1

Copper
Copper prices on the LME slipped around 1.3 percent in last week and touched a low of $7024/tonne on Friday. Prices declined during the later part of the week on the back of favourable economic data from US increased concerns of QE tapering from the Federal Reserve in its meeting next week. Further, decline in industrial production data from Euro Zone exerted downside pressure on prices. In the early part of the week, prices rose on account of positive economic data from Chinese economy. In the Indian markets, appreciation in the Rupee acted cted as a negative factor. Outlook In today’s session, we expect base metals prices to trade on a positive note on the back of upbeat global market sentiments. Further, weakness in the DX will support an upside in prices. Additionally, unfavorable economic data eased concerns of QE tapering from the Federal Reserve in its meeting during the week will act as a positive factor. Also, industrial production is estimated to increase from the US in evening session will continue positive movement in prices. In the Indian markets, appreciation preciation in the Rupee will prevent sharp upside in prices. Technical Outlook
Unit MCX Copper Nov’13 MCX Zinc Sep’13 MCX Lead Sep ’13 MCX Aluminum Sep’13 MCX Nickel Sep ’13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for September 16 16, 2013 Support 455/452 117.00/116.00 131.00/130.00 111.50/110.50 874/866 Resistance 464/468 119.30/120.20 133.00/134.00 113.50/114.50 890/895

LME Zinc (3 month) MCX Zinc (Sep’13)

$/tonne

1874.0

-0.3

-1.1

-4.0

-7.0

Rs /kg

117.1

-0.9

-3.6

-0.8

6.2

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 13th Sept 577,525 5,348,325 217,422 983,075 231,675 12th Sept 579,750 5,353,725 217,650 985,575 182,200 Actual Change -2,225 -5,400 -228 -2,500 49,475 (%) Change -0.4 -0.1 -0.1 -0.3 27.2

Source: Reuters

Technical Chart – LME Copper

Source: Telequote

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Commodities Daily Report
Monday| September 16, 2013

International Commodities
Important Events for Today
Indicator Country Time (IST) Actual Forecast Previous Impact

Bank Holiday ECB President Draghi Speaks CPI y/y Core CPI y/y Empire State Manufacturing Index Capacity Utilization Rate Industrial Production m/m

Japan Euro Euro Euro US US US

All day 1:30pm 2:30pm 2:30pm 6:00pm 6:45pm 6:45pm

-

1.3% 1.1% 9.2 77.8% 0.5%

1.3% 1.1% 8.2 77.6% 0.0%

High Medium Medium Medium Medium Medium

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