Commodities Daily Report

Thursday| July 18, 18 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 [email protected] (022) 2921 2000 Extn :6134 Anish Vyas Research Analyst [email protected] (022) 2921 2000 Extn :6104

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Commodities Daily Report

International Commodities
Overview
US Building Permits declined to 0.91 million in the last month. UKs Claimant Count Change declined by 21,200 in the month of June. Housing Starts fell to 0.84 million in the previous month. Asian markets are trading on a mixed note today on the back of statement from International Monetary Fund (IMF) that Chinas economic growth will miss its estimates. However, statement from US Federal deral Reserve Chairman Ben Bernanke eased the concerns regarding tapering in its stimulus measures prevented sharp fall in global market sentiments. US Building Permits declined to 0.91 million in June as against a rise of 0.99 million in May. Housing Starts rts fell to 0.84 million in June from earlier rise of 0.93 million a month ago. The US Dollar Index (DX) gained around 0.2 percent in yesterdays trade on the back of rise in risk aversion in global markets in early part of the trade. Further, unfavorable economic data from US acted as a positive factor for the currency. However, sharp upside in the currency was capped on account of statement from US Federal Reserve Chairman Ben Bernanke regarding ease in concerns for pullback in its stimulus measures. The DX touched an intra-day day high of 83.06 and closed at 82.84 on Wednesday. The Indian Rupee appreciated yesterday in the early part of the trade on the back of increase in Foreign Direct Investment (FDI) in 13 sectors by government on Tuesday. Further, upbeat domestic market sentiments acted as positive factor. Additionally, expectation that Reserve Bank of India (RBI) will sell 120 billion rupees in bonds market on Thursday supported an upside in the currency. However, during the day the currency wiped off its gains and depreciated on account of dollar demand from importers. The central banks sold dollars at 59.50-levels levels to provide respite to fall in the Rupee but ended on a depreciation note and declined by 0.1 percent. The currency touched an intra-day low of 59.575 and closed at 59.32 on Wednesday. For the month of July 2013, FII outflows totaled at Rs.5,887.40 crores th ($980.92 million) as on 17 July 2013. Year to date basis, net capital th inflows stood at Rs.66,6290.90 crores ($12,519.90 million) till 17 July 2013. UKs Claimant Count Change declined by 21,200 in June as against an earlier fall of 16,200 in May. Average Earnings Index increased by 1.7 percent in May from previous rise of 1.3 percent a month ago. Unemployment Rate remained unchanged nged at 7.8 percent in the month of May.

Market Highlights (% change)

as on 17 July, 2013 w-o-w 0.9 m-o-m -2.1 y-o-y -6.8

$/Euro (Spot)

1.3124

-0.3 0.3

1.2

-1.8

6.8

Dollar Index NIFTY

82.84

0.2

-1.7

1.5

4.3

5973.3

0.3

2.7

2.1

14.9

SENSEX

19948.7

0.5

3.4

3.2

9.1

DJIA

15470.5

0.1

1.2

2.4

20.8

S&P

1680.9

0.3

1.7

2.6

23.3

Source: Reuters

The Euro depreciated around 0.3 percent in yesterdays trade on the back of strength in the DX. Further, weak global markets in the early part of the trade acted as a negative factor for the currency. day low of 1.3083 1.3 and closed at The Euro touched an intra-day 1.3124 124 against the dollar on Wednesday. Wednesday

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International Commodities
Bullion Gold
Spot gold prices declined around 1.3 percent in the yesterdays trade on the back of strength in the DX. Further, decline in SPDR gold holdings to 936.07 tonnes which is at lowest level since February 2009 exerted downside pressure on prices. The yellow me metal touched an intra-day day low of $1270.41/oz and closed at $1275.40/oz in yesterdays trading session. In the Indian markets, prices ended on a negative note, declining around 0.5 percent. The commodity closed at Rs.26347/10 gms after touching a low of Rs.26240/10 .26240/10 gms on Wednesday Wednesday. However, depreciation in the Indian Rupee cushioned sharp fall in prices on the MCX. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1275.4 Prev. day -1.3 as on 17 July, 2013 WoW 0.9 MoM -7.9 YoY -18.9

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (August13) MCX Gold (August13)

Rs/10 gms $/oz

26600.0

0.3

2.2

-4.5

-8.9

1297.3

0.4

3.3

-6.3

-17.6

$/oz

1290.8

0.5

3.5

-6.0

-18.9

Rs /10 gms

26347.0

-0.5

0.9

-5.5

-9.6

Source: Reuters

Silver
Market Highlights - Silver (% change) Taking cues from fall in gold prices along with downside in base metals complex, Spot silver prices declined around 3.7 percent in yesterdays trade. Further, strength in the DX acted as a negative factor for the prices. The white metal touched an intra-day day low of $19.23/oz and closed at $19.30/oz in yesterdays trade. ices fell around 2.1 percent and closed at On the domestic front, prices Rs.40,154/kg after touching a low of Rs.39,931/kg on Wednesday Wednesday. However, depreciation in the Indian Rupee cushioned sharp fall in prices on the MCX.
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Sept13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 19.3 41600.0 Prev day -3.7 -0.2 as on 17 July, 2013 WoW -0.4 1.6 MoM -11.9 -7.3 YoY -29.1 -19.5

$/oz $/ oz

1983.0 19.9

-0.6 0.5

2.4 4.0

-9.3 -7.9

-26.6 -27.0

Rs / kg

40154.0

-2.1

0.0

-7.9

-23.8

Outlook
Precious metal prices are expected to trade on a lower note in todays trade, taking cues from sharp fall in prices in yesterdays trade. Additionally, decline in SPDR holdings coupled with mixed global markets will exert downside pressure in prices. Howev However, sharp downside in prices will be cushioned as a result of weakness in the DX. In the Indian markets, appreciation in the Rupee will add downside pressure in prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Aug13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for July 18, 2013 Support 1270/1263 26200/26050 19.2/18.9 39700/39300 Resistance 1284/1292

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

26500/26650 19.5/19.8 40500/40900

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Commodities Daily Report

International Commodities
Energy Crude Oil
Nymex crude oil prices gained around 0.5 percent in yesterdays trading session taking cues from more than expected decline in US crude oil inventories. Further, statement from Fed Chairman Ben Bernanke regarding ease in concerns for pullback in its stimul stimulus measures supported an upside in prices. However, sharp upside in prices was capped on account of strength in the DX. Crude oil prices touched an intra-day day high of $106.60/bbl and closed at $106.50/bbl in yesterdays trading session. On the domestic bourses, ourses, prices rose 0.8 percent in the yesterdays trade as a result of depreciation in the Indian Rupee. The commodity closed at Rs.6,295/bbl after touching a high of Rs.6,313/bbl on Tuesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories decline more than expectations by 6.9 million barrels to 367.0 million barrels for the week ending on 12th July 2013. Gasoline stocks rose by 3.1 million barrels to 224.10 million barrels and whereas distillate stockpiles gained 3.9 million barrels to 127.70 million barrels for the last week. Market Highlights - Crude Oil (% change)
Crude Oil Brent (Spot) Nymex Crude (Aug 13) ICE Brent Crude (Aug13) MCX Crude (July 13) Unit $/bbl $/bbl Last 110.7 106.5 Prev. day 0.3 0.5 WoW 1.6 0.0 as on 17 July, 2013 MoM 4.4 8.4 YoY 3.8 19.3

$/bbl

108.6

-0.7

0.1

3.0

3.3

Rs/bbl

6295.0

0.8

-1.5

10.9

26.7

Source: Reuters

Market Highlights - Natural Gas (% change)

as on 17 July, 2013

Unit $/mmbtu Rs/ mmbtu

Last 3.613 216.3

Prev. day -1.4 -0.3

WoW -1.34 -2.17

MoM -7.52 -3.82

YoY 29.45 39.01

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 increase by 63 billion cubic feet (bcf) for the week ending on 12th July 2013.
Source: Telequote

Outlook From the intra-day day perspective, we expect crude oil prices to trade on a positive note on the back of decline in API and US crude oil inventories. Additionally, weakness ess in the DX will support an upside in prices prices. Further, statement from Fed Chairman Ben Bernanke eased the concerns regarding pullback in its stimulus measures will act as a positive factor. . However, sharp upside in prices will be capped on account of mixed global markets along with forecast by IMF that growth in Chinese economy will miss its estimates. In the Indian markets appreciation in the Rupee will prevent sharp upside in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude July13 $/bbl Rs/bbl valid for July 18, 2013 Support 105.2/104 6230/6160 Resistance 107.1/107.8 6340/6380

Technical Chart NYMEX Natural Gas

Source: Telequote

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International Commodities
Base Metals
Market Highlights - Base Metals (% change) The base metals pack traded on a negative note in yesterdays trade on the back of unfavourable Building Permits and Housing Starts data from US coupled with strength in the DX. Further, mixed LME inventories exerted downside pressure on prices. However, sharp downside in prices was cushioned on account of upbeat global markets. In the Indian markets, appreciation in the Rupee added downside pressure in prices on the MCX.
Unit LME Copper (3 month) MCX Copper (Aug13) LME Aluminum (3 month) MCX Aluminum (July13) Rs /kg 105.4 0.2 -2.0 0.0 0.7 $/tonne 1804.0 -0.6 -0.8 -2.5 -5.3 Rs/kg 412.6 -0.9 0.1 0.8 -3.1 $/tonne Last 6899.0 Prev. day -1.5 as on 17 July, 2013 WoW 1.5 MoM -12.1 YoY -9.7

Copper
Copper prices traded on a negative note and declined around 1.5 percent yesterday on the back of decline in Building Permits and Housing Starts data from US. Further, strength in the DX acted as a negative factor for prices. However, sharp downside in prices was cushioned as a result of fall in LME copper inventories by 0.1 percent which stood at 641,225 tonnes. Additionally, upbeat global markets prevented downside in prices. The red metal touched an intra-day low of $ $6867.25/tonne and closed at $6899.0/tonne in yesterdays trade. On the domestic front, prices dropped 0.9 percent but depreciation in the Rupee restricted downside and closed at Rs. 412.60 412.60/kg after touching a low of Rs.411.10/kg on Wednesday. Outlook In todays session, we expect base metals prices to trade on a negative note on the back of statement from IMF that growth in Chinese economy will miss its estimates. Further, decline in Building Permits and Housing starts data from the US will exert downs downside pressure in prices. However, sharp downside side in prices will be cushioned on account of weakness in the DX coupled pled with ease in concerns for bond reduction after affirmative statement from US Federal Reserve. In the Indian markets appreciation in the Rup Rupee will add downside pressure in prices on the MCX. Technical Outlook
Unit MCX Copper Aug13 MCX Zinc July 13 MCX Lead July 13 MCX Aluminum July13 MCX Nickel July 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for July 18, 201 2013 Support 409/406 108/107 119.2/118.5 104.8/103.8 821/814 Resistance 416/419 110/111 121/122 106.8/107.8 834/842

LME Nickel (3 month) MCX Nickel (July13) LME Lead (3 month) MCX Lead (July13) LME Zinc (3 month) MCX Zinc (July13)

$/tonne

13958.0

1.4

2.8

-1.8

-13.2

Rs /kg

827.3

2.1

1.3

0.4

-7.4

$/tonne

2033.0

-2.1

-1.8

-3.6

7.0

Rs /kg

120.2

-1.4

-3.3

-1.5

14.4

$/tonne

1860.3

-1.6

-1.8

-0.2

-0.5

Rs /kg

109.1

-0.8

-3.1

2.4

5.3

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 16th July 641,225 5,486,100 195,774 1,077,225 196,875 15th July 641,825 5,472,700 196,074 1,001,325 193,950 Actual Change -600 13,400 -300 75,900 2,925 (%) Change -0.1 0.2 -0.2 7.6 1.5
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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

Current Account Retail Sales m/m Spanish 10-y Bond Auction Unemployment Claims Fed Chairman Bernanke Testifies Philly Fed Manufacturing Index

Euro UK Euro US US US

1:30pm 2:00pm Tentative 6:00pm 7:30pm 7:30pm

21.3B 0.2% 343K 8.5

19.5B 2.1% 4.77/1.8 360K 12.5

Medium High High High High High

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