Commodities Daily Report

Tuesday| August 6, 6 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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International Commodities
Overview
US ISM Non-Manufacturing PMI increased to 56-mark mark in July. European Sentix Investor Confidence improved to 4.9 4.9-level in August. UKs Services PMI rose sharply by 3.3 points to 60.2 60.2-mark in July. Asian markets are trading lower today on the back of favorable economic data from US in yesterdays trade led to expectations that Federal Reserve will pullback its stimulus measures. US Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) increased by 3.8 points to 56 56-mark in July as against a rise of 52.2-level in June. The US Dollar Index (DX) traded on a flat note and declined marginally around 0.05 percent in yesterdays trade on the back of favorable economic data which showed signs of economic growth. However, positive economic data led to expectations that the Fed will pullback its stimulus measures coupled with rise in risk aversion in global market sentiments in later part of the trade cushioned sharp fall in the currency. The DX touched an intra-day day low of 81.81 and closed at 81.936 on Monday. The Indian Rupee appreciated around 0.4 percent in yesterdays trading session. The currency appreciated on the back of upbeat global ma markets and weakness in the DX in early part of the trade. Further, selling of dollars from foreign banks also supported an upside in the currency. However, sharp upside in the currency was capped as a result of dollar demand from importers and oil firms in n later part of the trade. The Rupee touched an intra-day day high of 60.72 and closed at 60.85 on Monday. For the month of August 2013, FII inflows totaled at Rs.440.30 crores th ($72.42 million) as on 5 August 2013. Year to date basis, net capital th inflows stood at Rs.66,990.90 crores ($12,633.50 million) till 5 August 2013. UK Services PMI grew very strongly in July13 to touch 60.2 from the previous months reading of 56.9. This data showed a signifi significant improvement and being high impact in nature it shows that the UK economy is also witnessing an improvement. British Retail Consortium (BRC) Retail Sales Monitor increased by 2.2 percent in July from rise of 1.4 percent a month ago.

Market Highlights (% change)

as on 5 August, 2013 w-o-w -2.20 m-o-m -0.28 y-o-y -8.38

$/Euro (Spot)

1.3257

-0.18 0.18

-0.02

3.01

7.04

Dollar Index NIFTY

81.936

-0.05 0.05

0.21

-2.94

3.12

5685.4

0.13

-2.51

-2.17

9.01

SENSEX

19182.26

0.10

-2.10

-0.74

4.88

DJIA

15612.13

-0.30 0.30

0.58

2.04

19.21

S&P

1707.1

0.0

5.8

5.8

25.1

Source: Reuters

The Euro depreciated around 0.2 percent in the yesterdays trading session on the back of weak global markets in the later part of the trade. However, weakness in the DX coupled with favorable economic data from the region cushioned sharp fall in the currency. The Euro touched an intra-day intra low of 1.323 and closed at 1.3257 against the dollar on Monday. Monday Economic data from the Euro Zone came on the positive side with Euro Zone, Spanish and Italian Services PMI showing an increase for July13. The Euro Are Sentix Investor Inv Sentiment also showed an improvement, thus indicating that the European economies, although at a slow pace are finally witnessing a recovery.

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International Commodities
Bullion Gold
Spot gold prices declined around 0.6 percent in the yesterdays trade on the back of weak global market sentiments in later part of the trade. Further, declining trend in SPDR gold holdings to 917.14 tonnes, marking the lowest level since February 2009 exe exerted downside pressure on prices. However, weakness in the DX cushioned sharp fall in the prices. The yellow metal touched an intra-day day low of $1297.25/oz and closed at $1303.34/oz in the last trading session of the week. In the Indian markets, prices traded on a positive note and gained around 0.2 percent and closed at Rs.28,540/10 gms after touching a low of Rs.28,422/10 gms on Monday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1303.34 Prev. day -0.62 as on 5 August, 2013 WoW -1.78 MoM 5.46 YoY -18.73

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

Rs/10 gms $/oz

27700

0.91

1.02

6.54

-6.81

1304.75

-0.34

-1.88

5.63

-18.55

$/oz

1302.6

-0.61

-1.62

4.43

-18.89

Rs /10 gms

28540

0.19

0.93

9.32

-3.77

Silver
Taking cues from fall in gold prices along with downside in base metals complex, Spot silver prices declined by more than 1 percent in yesterdays trade. However, sharp downside in prices was cushioned on account of weakness in the DX. The white metal touched an intra intraday low of $19.53/oz and closed at $19.69 in yesterdays trading session. On the domestic front, nt, prices fell around 0.7 percent on account of appreciation in the Rupee and closed at Rs.41,760/kg after touching a low of Rs.41,454/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 19.69 42300 Prev day -1.06 1.15

Source: Reuters

as on 5 August, 2013 WoW -0.61 0.62 MoM 3.41 2.50 YoY -29.10 -19.89

$/oz $/ oz

1976 19.711

1.54 -0.96

-1.69 -0.72

3.13 3.06

-27.49 -29.07

Outlook
In todays session, we expect precious metals to trade lower on the back of weak global market sentiments. Additionally, declining trend in SPDR gold holdings will also exert downside pressure on prices. However, weakness in the DX will cushion sharp fall in the prices. In the Indian markets, depreciation in the Rupee will prevent sharp fall in prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Oct13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for August 6, 2013 Support 1287/1280 27700/27550 19.50/19.20 41400/41000 Resistance 1301/1308 28000/28150 19.80/20.10 42200/42700

Rs / kg

41760

-0.65

1.49

3.40

-21.68

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 0.4 percent in yesterdays trade taking cues from Libyas plan to increase its production in next month. The country is expected to pump in 800,000 barrels a day in next month from 700,000 in July. Additionally, favorable economic data from US led to expectations of cut in stimulus measures by Federal Reserve which exerted downside pressure on prices. However, weakness in the DX cushioned sharp fall in prices. Crude oil prices touched an intra-day low of $105.70/bbl and closed at $106.56/oz in yesterdays trading session. On the domestic bourses, MCX crude August contract gained around 0.3 percent and crude oil prices touched an intra-day day high of Rs.6,560/bbl and closed at Rs.6,543/bbl on Monday. API Inventories Forecast The American Petroleum Institute (API) is scheduled to release its weekly inventories report today and US crude oil inventories is expected nd to fall by 0.7 million barrels for the week ending on 2 August 2013. Gasoline stocks are expected to fall by 1.2 million barrels whereas distillate inventories are expected to rise by 0.2 million barrels for the same period. Outlook day perspective, we expect crude oil prices to trade on a From the intra-day mixed note on the back of expectations tions of rise in Libyas crude oil output in next month. Further, weak global market sentiments will exert downside pressure on prices. However, weakness in the DX coupled with forecast for decline in API crude oil inventories will cushion sharp fall in prices or even reversal. In the Indian markets, depreciation in the Rupee will prevent sharp fall in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Aug13 $/bbl Rs/bbl valid for August 6, 2013 Support 105.50/104.60 6490/6440 Resistance 107.10/107.75 6590/6630
Source: Telequote

Market Highlights - Crude Oil (% change)

as on 5 August, 2013 MoM 2.36 2.93 YoY 0.49 16.59

$/bbl

108.7

-0.23

1.16

1.18

-0.22

Rs/bbl

6543

0.34

4.67

4.69

29.03

Source: Reuters

Market Highlights - Natural Gas (% change)

as on 5 August, 2013 MoM 3.62 220.2 YoY 2.932 161.6

WoW 3.473 208.2

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

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International Commodities
Base Metals
The base metals complex traded on a negative note in the yesterdays trading session as a result of weak global market sentiments in later part of the trade. Further, favorable economic data from US led to expectations of pullback lback in stimulus measures which acted as a negative factor. However, sharp downside in prices was cushioned on the back of decline in LME inventories coupled with rise in non non-manufacturing data from US. In the Indian markets, appreciation in the Rupee exerted downside pressure in prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Aug13) LME Aluminum (3 month) MCX Aluminum (Aug13) LME Nickel (3 month) MCX Nickel (Aug13) LME Lead (3 month) MCX Lead (Aug13) Rs /kg $/tonne Rs /kg $/tonne Rs /kg $/tonne Rs/kg $/tonne Last as on 5 August, 2013 WoW MoM YoY

Prev. day

6990 428.2 1804 108.85 13871 849.1 2130 130.25 1869.5

-0.24 -0.07 -0.55 -0.46 -0.75 -0.36 0.76 0.89 0.11

1.67 4.22 0.14 4.21 1.13 4.57 2.95 6.07 0.93

-10.92 2.40 0.06 0.88 3.18 3.94 2.71 3.70 -0.24

-5.86 3.56 -2.91 5.73 -11.08 -2.86 12.70 23.75 1.60

Copper
Copper the leader of the base metals group declined around 0.2 percent yesterday on the back of weak global markets coupled with expectations of reduction duction in bond buying program from Federal Reserve. However, weakness in the DX along with decline in LME copper inventories cushioned sharp fall in prices. The red metal touched an intra-day day low of $6879.15/oz and closed at $6990/oz in yesterdays trade. In the Indian markets, prices fell around 0.1 percent and closed at Rs.428.20/kg after touching an intra-day day low of Rs.425/kg on Monday. Outlook For todays session, we expect base metals group to trade lower on the back of weak global market sentiments. ntiments. Further, expectations that Federal Reserve will pullback its stimulus measures will also exert downside pressure on prices. However, sharp downside will be cushioned on account of weakness in the DX along with forecast for favorable manufacturing and industrial production from UK. In the Indian markets, depreciation in the Rupee will cushion sharp 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 6, 201 2013 Support 425/422 112.50/111.50 129.50/128.50 108.0/107.20 843/837 Resistance 431/434 114.0/114.80 131.0/131.80 109.50/110.20 854/860

LME Zinc (3 month) MCX Zinc (Aug13)

$/tonne

Rs /kg

113.3

0.09

4.67

0.49

10.59

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 5th August 2nd August Actual Change -2,050 1,275 6 -4,000 -100 (%) Change -0.3 0.0 0.0 -0.4 0.0
Source: Reuters

608,675 5,472,375 204,336 1,041,400 200,125

610,725 5,471,100 204,330 1,045,400 200,225

Technical Chart LME Copper

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

BRC Retail Sales Monitor y/y Halifax HPI m/m Manufacturing Production m/m Italian Prelim GDP q/q German Factory Orders m/m Trade Balance NIESR GDP Estimate JOLTS Job Openings FOMC Member Evans Speaks

UK UK UK Euro Euro US UK US US

4:31am 12:30pm 2:00pm 2:30pm 3:30pm 6:00pm 7:30pm 7:30pm 10:30pm

2.2% -

0.3% 0.9% -0.4% 1.1% -43.1B -

1.4% 0.6% -0.8% 0.8% -0.6% 0.6% -1.3% 1.3% -45B 45B 0.6% 3.83M -

Medium Medium High Medium Medium High Medium Medium Medium

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