Commodities Daily Report

Tuesday| August 27, 27 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

Tuesday| August 27, 27 2013

International Commodities
Overview
Asian markets opened on a negative note in todays trading session. US Core Durable Goods Orders declined by 0.6 percent in July. US Durable Goods Orders fell around 7.3 percent in last month. Asian markets are trading lower today on the back of more than expected fall in durable goods order data from US in yesterdays trading session. Further, tension between the US and Syria after statement from US Secretary of State John ohn Kerry that President of Syria should hold government accountable for using chemical weapons ons acted as a negative factor. US Core Durable Goods Orders declined by 0.6 percent in July as against a fall of 0.1 percent in June. Durable Goods Orders fell ar around 7.3 percent in last month from earlier rise of 3.9 percent a month ago ago. The US Dollar Index (DX) appreciated marginally around 0.1 percent in yesterdays trading session on the back of rise in risk aversion in global market sentiments which led to increase in demand for the low yielding currency. Further, unfavorable economic data from the US also supported an upside in the currency. However, sharp upside in currency was capped as unfavorable economic data from US showed signs of slow economic growth th which increased the expectations that QE tapering from Federal Reserve will be delayed. The currency touched an intra-day day high of 81.56 and closed at 81.44 on Monday. The Indian Rupee depreciated around 1.7 percent in yesterdays trading session. The currency urrency depreciated on the back of month end dollar demand from oil importers and companies. Further, concerns regarding Current Account Deficit (CAD) and economy growth of the country exerted downside pressure on the currency. n funds from equities and debt acted as a Further, outflow of foreign negative factor. Also, Fitch credit rating agency has warned the Indian government that a downgrade is possible as investors confidence is low. Indias credit rating is just once notch above junk category. The cur currency touched an intra-day day low of 64.72 and closed at 64.29 on Monday. For the month of August 2013, FII outflows totaled at Rs.3018.30 crores th ($464.39 million) as on 26 August 2013. Year to date basis, net capital th inflows stood at Rs.63,074.10 crores ($12,021.40 million) till 26 August 2013.

Market Highlights (% change)

Last INR/$ (Spot) 64.29 Prev day -1.7 1.7

as on 26 August, 2013 w-o-w -1.8 m-o-m -9.1 y-o-y -13.4

$/Euro (Spot)

1.3368

-0.1 0.1

0.3

0.7

7.0

Dollar Index NIFTY

81.44

0.1

0.2

-0.4

2.5

5476.5

0.1

-7.3

-7.3

1.1

SENSEX

18558.1

0.2

-6.3

-6.3

1.5

DJIA

14946.5

-0.4 0.4

-0.4

-3.7

13.6

S&P

1656.8

-0.4 0.4

-2.1

-2.1

17.4

Source: Reuters

The Euro declined around 0.1 percent in the yesterdays trade taking cues from strength in the DX. Further, correction in the market sentiments was seen in later part of the trade which exerted downside pressure on the currency. day low of 1.3355 and closed at The Euro touched an intra-day 1.3368 on Monday.

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Commodities Daily Report

Tuesday| August 27, 27 2013

International Commodities
Bullion Gold
Market Highlights - Gold (% change) Comex gold futures closed in the negative territory on Monday, losing around 0.2 percent. Prices closed at $1393/oz yesterday, closing below $1400/oz as strength in the Dollar Index added pressure on the yellow metal. SPDR gold holdings increased 0.7 percent on Friday from Thursday, indicating that investors were again looking at gold investments from the positive point of view. This rise in ETF gold holdings will help support upside in prices in the near-term. Gold prices on the MCX near-month contract witnessed itnessed declined to the tune of 0.1 percent and closed at Rs.31,876/10 gms. However, depreciation in the Rupee cushioned sharp fall in prices.
Gold Gold (Spot) Unit $/oz Last 1404.4 Prev. day 0.6 as on 26 August, 2013 WoW 2.9 MoM 5.4 YoY -15.6

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (Oct13) MCX Gold (Oct13)

Rs/10 gms $/oz

32000.0

2.6

17.4

17.4

7.4

1377.5

0.1

0.9

3.9

-17.4

$/oz

1393.0

-0.2

1.4

6.1

-16.6

Rs /10 gms

31876.0

-0.1

2.3

16.3

2.6

Silver
Source: Reuters

Despite strength in the Dollar Index, silver prices on the Comex futures platform jumped a whopping 3.1 1 percent on Monday. An overall improving economic scenario in the advanced economies is likely to support industrial demand for silver. Hence, despite dollar strength and falling gold prices, silver prices closed in the positive territory. The Silver MCX CX September contract jumped around 0.6 percent and closed at Rs.53,787/kg after touching an intra-day day high of Rs.54,737/kg on Monday.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Sept13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 24.3 54700.0 Prev day 1.3 5.2

as on 26 August, 2013 WoW 5.0 31.7 MoM 20.1 31.7 YoY -20.9 0.0

$/oz $/ oz

2306.0 23.7

0.0 3.1

-0.7 2.5

15.8 20.7

-24.1 -22.5

Outlook
In the Indian markets, Rupee depreciation is expected to support upside in gold and silver prices both. In the international markets, however, gold prices are expected to fall on the back of a stronger Dollar Index. But upside in case of silver in dollar terms is expected to continue on the back of demand demand-related optimism due to improvement in the economic s situation in the advanced economies.

Rs / kg

53787.0

0.6

5.0

29.8

-7.3

Source: Reuters

Technical Chart Spot Gold

Technical Outlook
Unit Spot Gold MCX Gold Oct13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg

valid for August 27, 2013 Support 1389/1381 31700/31500 23.85/23.60 53300/52800 Resistance 1402/1409 32000/32150 24.20/24.45
Source: Telequote

54200/54600

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Commodities Daily Report

Tuesday| August 27, 27 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 0.5 percent yesterday taking cues from more than forecasted fall in US durable goods orders data indicating a slow economic growth. This led to expectations for fall in demand for the commodity. Further, restart of oil exports from Libya also exerted downside pressure on prices. Additionally, strength in n the DX acted as a negative factor. Crude oil prices touched an intra-day day low of $105.56/bbl and closed at $105.92/bbl in yesterdays trading session. In the Indian markets, prices fell around 0.2 percent and closed at Rs.6,868/bbl after touching an intra-day day low of Rs.6,830/bbl on Monday. However, sharp downside in prices was prevented as a result of depreciation in the Rupee. API Inventories Forecast The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude de oil inventories are expected to decline by 0.1 million barrels for the week ending on 23rd August 2013. Gasoline stocks are expected to drop by 1.2 million barrels and distillate inventories are expected to shoot up by 0.7 million barrels for the same week. Outlook From the intra-day day perspective, we expect crude oil prices to trade higher on the back of unrest in Syria could lead to supply disruption from the region. Additionally, expectations of decline in API crude oil inventories will support an upside in prices. However, sharp upside in prices will be capped as result of restart of oil exports from Libya. Further, weak global market sentiments along with strength in the DX will prevent positive movement in prices. In the Indian markets, depreciation in the Rupee e will support an upside in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Aug13 $/bbl Rs/bbl valid for August 27, 2013 Support 105.30/104.20 6800/6720 Resistance 107.20/108.10 6920/6980
Source: Telequote

Market Highlights - Crude Oil (% change)

Crude Oil Brent (Spot) Nymex Crude (Sep 13) ICE Brent Crude (Sep13) MCX Crude (Aug 13) Unit $/bbl $/bbl Last 114.1 105.9 Prev. day 1.4 -0.5 WoW 0.6 -1.1

as on 26 August, 2013 MoM 4.5 2.8 YoY -0.4 10.2

$/bbl

110.7

-0.3

0.8

2.9

-1.4

Rs/bbl

6868.0

-0.2

2.8

9.7

29.4

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Aug 13) Unit $/mmbtu Rs/ mmbtu Last 3.504 226.7 Prev. day 0.5 0.8

as on 26 August, 2013 MoM -1.57 7.85 YoY 29.63 49.24

Source: Reuters

WoW 1.13 2.53

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Tuesday| August 27, 27 2013

International Commodities
Base Metals
Market Highlights - Base Metals (% change) The base metals pack on the MCX traded on a negative note in the yesterdays trading session on the back of more than expected decline in core durable goods orders data from the US. However, less volatility was observed as LME markets were closed yesterday on eve of Summer Bank Holiday. Rupee depreciation cushioned sharp fall in prices on the MCX MCX.
Unit LME Copper (3 month)** MCX Copper (Aug13) LME Aluminum (3 month)** MCX Aluminum (Aug13) LME Nickel (3 month)** MCX Nickel (Aug13) LME Lead $/tonne 2229.0 0.9 -0.7 7.4 13.1 Rs /kg 931.8 -0.1 -1.2 11.9 2.0 $/tonne 14535.0 0.9 -1.8 2.7 -11.9 Rs /kg 118.9 -0.5 -0.6 12.7 13.6 $/tonne 1897.5 0.8 -0.9 4.0 -1.1 Rs/kg 473.9 -0.3 1.1 13.5 11.0 $/tonne Last 7353.0 as on 26 August, 2013 WoW 0.6 MoM -6.3 YoY -4.0

Prev. day 0.8

Copper
On the MCX, the near-month copper contract declined around 0.3 percent in yesterdays trading session. Further, economic data from the US came on a negative note which exerted downsid downside pressure on prices. Rupee depreciation cushioned sharp fall in prices and closed at Rs.473.90/kg after touching an intra-day low of Rs.4 Rs.467.7/kg on Monday. Outlook In todays session, we expect base metals prices to trade on a negative note on the back of decline in durable goods orders data from US in yesterdays trading session. Further, weak global market sentiments coupled with strength in the DX will exert downside pressure on the prices. Additionally, in the US session prices will correct more as US consumer confidence data is expected to come on a negative note. However, sharp downside in prices will be cushioned as a result of forecast of favorable German Ifo Business Climate data data. ee will restrict sharp In the Indian markets, depreciation in the Rupee fall in prices on the MCX. Technical Outlook
Unit MCX Copper Aug13 MCX Zinc Aug 13 MCX Lead Aug 13 MCX Aluminum Aug13 MCX Nickel Aug 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for August 27, 2013 Support 470/467 124.20/123.20 140.60/139.60 117.90/116.90 925/917 Resistance 476/479 126.20/127.20 142.70/143.80 119.60/120.60 938/945

(3 month)** MCX Lead (Aug13) LME Zinc (3 month)** MCX Zinc (Aug13)
Source: Reuters (**Prices as on 23rd Aug as LME markets closed yesterday on eve on Summer Bank Holiday)

Rs /kg

141.7

-0.9

-0.9

16.1

29.9

$/tonne

1987.3

0.9

0.0

5.9

6.0

Rs /kg

125.3

-0.5

0.3

14.7

21.7

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 26th August 564,225 5,428,175 210,060 1,023,575 187,850 23rd August 565,500 5,431,600 209,868 1,026,100 186,625 Actual Change -1,275 -3,425 192 -2,525 1,225 (%) Change -0.2 -0.1 0.1 -0.2 0.7
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Tuesday| August 27, 27 2013

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

German Ifo Business Climate S&P/CS Composite-20 HPI y/y CB Consumer Confidence

Euro US US

1:30pm 6:30pm 7:30pm

107.1 11.9% 79.6

106.2 12.2 12.2% 80.3

High Medium High

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