Commodities Daily Report

Monday| May 20, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn :6130 Saif Mukadam Research Analyst saif.mukadam@angelbroking.com (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report

Monday| May 20, 2013

Overview

International Commodities
US Prelim UoM Consumer Sentiment rose to 83.7-mark in May. Japans Core Machinery Orders increased by 14.2 percent in March . UKs Rightmove HPI remained at 2.1 percent in the current month.

Market Highlights (% change)

Last INR/$ (Spot) 54.88 Prev day -0.2

as on 17 May, 2013 w-o-w -0.1 m-o-m -1.8 y-o-y -1.0

Asian markets are trading higher today on the back of favorable economic data from the US which led to rise in risk appetite in the global market sentiments. US Prelim UoM Consumer Sentiment increased by 7.3 points to 83.7mark in May as against a rise of 76.4-level in April. Prelim UoM Inflation Expectations remained unchanged at 3.1 percent in the current month. The Conference Board (CB) Leading Index gained by 0.6 percent in April from earlier decline of 0.2 percent in March. The US Dollar Index (DX) gained by 1.4 percent in the last week on the back of unfavorable economic data from US and Euro Zone. However, sharp upside in the currency was capped on account of rise in risk appetite in the global market sentiments. Further, positive US equities markets also prevented sharp upside in the DX. The currency touched a weekly high of 84.515 and closed at 84.387 on Friday. On a weekly basis, Indian Rupee depreciated marginally by 0.1 percent. The currency depreciated on account of dollar demand from importers. Additionally, strength in the DX also exerted downside pressure on the currency. However, sharp downside in the currency was cushioned as a result of decline in countrys inflation which is at the lowest level since 2009. Further, upbeat global and domestic market sentiments also prevented sharp fall in the currency. The currency touched a high of 54.535 in the last week and closed at 54.88 against dollar on Friday. For the month of May 2013, FII inflows totaled at Rs.11,992.60 crores th ($2,208.38 million) as on 17 May 2013. Year to date basis, net capital th inflows stood at Rs.73,029.0 crores ($13,518.70 million) till 17 May 2013. UKs Rightmove House Price Index (HPI) remained unchanged at 2.1 percent in the month of May. Japans Core Machinery Orders increased by 14.2 percent in March as against a rise of 4.2 percent a month ago.

$/Euro (Spot)

1.2838

-0.3

-1.2

-1.6

1.1

Dollar Index NIFTY

84.39

0.8

1.4

1.9

6.2

6187.3

0.3

1.5

8.8

27.4

SENSEX

20286.1

0.2

1.0

8.3

10.9

DJIA

15354.4

0.8

1.6

5.4

23.4

S&P

1667.5

1.0

2.1

7.4

27.8

Source: Reuters

The Euro depreciated by 1.2 percent in the last week on the back of strength in dollar index. Euro zone economy contracted by 0.2 percent in the first quarter of 2013 for consecutive 6 quarters added downside pressure. Further, weak economic data from Germany, France and Italy acted as negative factor for the currency. Additionally, European Central Bank (ECB) policy maker said that the bank may consider slashing euro deposits rates to negative if required kept currency under pressure. However, decline in Inflation in Euro zone along with optimistic global market sentiments cushioned sharp depreciation in the euro. Apart from that, Fitch credit rating agency upgraded Greece sovereign rating to B-minus from CCC, with stable outlook which prevented sharp decline in the currency. The Euro touched a weekly low of 1.2795 and closed at 1.2838 against dollar on Friday.

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Commodities Daily Report

Monday| May 20, 2013

Bullion Gold

International Commodities

Spot gold prices decreased around 6.1 percent in the last week on the back of strength in DX coupled with decline in Inflation in the major economies of the world. Further, rise in stock markets led to the decline in demand for safe heaven which kept prices under pressure. Additionally, SPDR gold trust holding continued to decline, which acted as a negative factor. Apart from that weak economic data from Euro zone added downside pressure on the prices. The yellow metal touched a weekly low of $1355.1/oz and closed at $1358.7/oz in last trading session of the week. In the Indian markets, prices declined by 3.6 percent taking cues from spot gold prices and closed at Rs.25884/10 gms on Friday after touching a weekly low of Rs. 25776/10 gms. Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, declined by 1.25 percent to 1,038.41 tonnes as th th on 17 May 2013 from previous level of 1,051.65 tonnes as on 10 May 2013.

Market Highlights - Gold (% change)

Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June13) MCX Gold (June13) Unit $/oz Rs/10 gms $/oz Last 1358.7 25835.0 Prev. day -1.9 0.2

as on 17 May, 2013 WoW -6.1 -3.7 MoM -3.2 -0.1 YoY -13.6 -8.2

1368.8

-0.9

-4.0

-2.6

-11.9

$/oz

1364.9

-1.6

-4.9

-3.9

-11.2

Rs /10 gms

25884.0

-0.9

-3.6

0.3

-9.3

Source: Reuters

Silver
Taking cues from decline in spot gold prices along with downside in the base metal packs, Spot silver prices decreased by 6.7 percent in the last week. Further, strength in DX coupled with unfavourable economic data from euro zone and china added downside pressure on the prices. Additionally, decline in US housing starts and Philly fed manufacturing index kept prices under pressure. However, upbeat global market sentiments along with rise in US consumer sentiments cushioned sharp downside in the prices. The white metal prices touched a low of $22.09/oz in the last week and closed at $22.23/oz in last trade of the week. On the domestic front, prices decreased by 5.0 percent taking cues from spot silver prices and closed at Rs.42814/kg on Friday after touching a low of Rs.42281/kg in the last week. Holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, decreased by 1.79 percent to 10,252.69 tonnes th th as on 17 May 2013 from previous level of 10,440.4 tonnes as on 10 May 2013.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 22.2 44020.0 Prev day -1.9 1.0

as on 17 May, 2013 WoW -6.7 -2.8 MoM -4.1 -3.9 YoY -20.6 -15.5

$/oz $/ oz

2252.0 2233.9

1.2 0.0

-3.6 -5.6

-4.8 -2.1

-18.0 -22.1

Rs / kg

42814.0

-1.0

-5.0

-0.3

-19.4

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a negative note on the back of rise in stock markets may reduce the demand for safe haven. Additionally, SPDR gold trust holding is near to 4 years low, which may keep prices under pressure. Further, strength in DX may add downside pressure on the prices. In the Indian markets, appreciation in the Rupee may add downside pressure. Technical Outlook valid for May 20, 2013
Unit Spot Gold MCX Gold June13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg Support 1340/1330 25700/25500 21.50/21.20 42300/41800 Resistance 1355/1361 25980/26100 21.80/22.10 43000/43500

Source: Telequote

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Commodities Daily Report

Monday| May 20, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined marginally around 0.01 percent in the last week taking cues from expectations that OPEC production will increase in the current year coupled with strength in the DX. Further, unfavorable economic data from the Euro Zone and US also exerted downside pressure on the crude oil prices. However, sharp downside in the prices was cushioned as a result of decline in US crude oil inventories along with upbeat global market sentiments. Crude oil prices touched a low of $92.13/bbl in the last week and closed at $96.02/bbl in the last trading session of the week. On the domestic bourses, prices increased by 2.0 percent on account of depreciation in the Indian Rupee and closed at Rs.5,297/bbl on Friday after touching a high of Rs.5308/bbl in the last week. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (May13) MCX Crude (May 13) Unit $/bbl $/bbl $/bbl Last 95.7 104.3 96.0 Prev. day 0.9 -0.3 0.9 WoW -0.1 3.1 0.0 as on 17 May, 2013 MoM 8.7 4.2 8.2 YoY 3.4 -5.2 3.7

$/bbl

104.6

0.8

0.7

5.0

-2.7

Rs/bbl

5297.0

1.7

2.0

11.5

5.3
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (May 13) Unit $/mmbtu Rs/ mmbtu Last 4.058 226 Prev. day 2.9 4.9

as on 17 May, 2013

Natural Gas
On a weekly basis, Nymex natural gas prices gained around 3.9 percent on the back of rise in risk appetite in the global market sentiments. However, sharp upside in the prices was capped on account of more than expected rise in the US natural gas inventories coupled with strength in the DX. Further, expectations of warm winter weather conditions also prevented positive movement in the prices. Gas prices touched a weekly high of $4.096/mmbtu and closed at $4.058/mmbtu in the last trade of the week. On the domestic front, prices rose by 3.9 percent and closed at Rs.223.50/mmbtu on Friday after touching a high of Rs.225.7/mmbtu in the last week. Depreciation in the Indian Rupee also supported an upside in the prices on the MCX. Outlook

WoW 3.86 5.07

MoM -3.47 -0.88

YoY 53.77 63.41

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

From the intra-day perspective, we expect crude oil prices to trade higher on the back of rise in risk aversion in the global market sentiments coupled with weakness in the DX. Further, unrest in Syria also led to expectations of supply concerns from the region which will also support an upside in the crude oil prices. Additionally, favorable consumer sentiments data from US in the last week will act as a positive factor for the oil prices. Appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude May13 $/bbl Rs/bbl valid for May 20, 2013 Support 95.20/94.00 5260/5190 Resistance 96.80/97.60 5350/5390

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Monday| May 20, 2013

Base Metals

International Commodities
Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (April13) LME Nickel (3 month) MCX Nickel (April13) LME Lead (3 month) MCX Lead (April13) LME Zinc (3 month) MCX Zinc (April13)
Source: Reuters

The base metals pack traded on a negative note on the back of strength in DX coupled with overall rise in LME inventories. Further, Europe GDP contracted by 0.2 percent in the first quarter of 2013 added downside pressure on the prices. Additionally, weak economic data from China along with rise in US initial jobless claims kept prices under pressure. Apart from that, decline in US housing starts coupled with fall in Philly Fed manufacturing index acted as a negative factor for the prices. However, optimistic global market sentiments along with rise in US consumer sentiments cushioned sharp fall in the prices. In the Indian market depreciation in the Indian Rupee prevented sharp downside in the prices.

as on 17 May, 2013 WoW -1.1 MoM -6.8 YoY -4.7

Last 7310.0

Prev. day 0.6

$/tonne

Rs/kg

406.0

1.4

-0.5

8.4

-3.3

$/tonne

1855.0

0.0

-1.1

-1.4

-9.7

Rs /kg

101.4

0.7

-0.8

0.7

-7.7

Copper
Copper, the leader of the base metal pack declined by 1.1 percent on the back of strength DX. Further, weak economic data from US, China and Euro Zone increased the worries over demand for copper. Additionally, rise in LME inventories by 4.2 percent acted as negative factor for the prices. However, sharp fall in the prices was cushioned on the back of rise in risk appetite in the global market sentiments coupled with rise in US consumer sentiments. The red metal touched a weekly low of $7101/tonne and closed at $7310/tonne in the last trading session of the week. On the domestic front, prices ended on negative note by 0.5 percent and closed at Rs. 406/kg on Friday after touching a low of Rs. 392.6/kg in the last week. Depreciation in the Indian rupee prevented sharp downside in the prices. Copper Inventories LME copper inventories increased by 4.25 percent in the last week th and stood at 629,950 tonnes as on 17 May, 2013 as against 604,250 th tonnes as on 10 May, 2013. Copper inventories in the warehouse monitored by the Shanghai fell by 2.4 percent and stood at 190,330 tonnes for the week ending on th 17 May, 2013. Outlook In the intra-day, we expect base metals prices to trade on the negative note on the back of expectation among the Investors that the US may start trimming its bond buying purchasing programme. Additionally, worries over Chinas economic growth may act as a negative factor for the prices. However, optimistic global market sentiments coupled with weakness in the DX may cushion sharp fall in the prices. In the Indian market appreciation in the Indian Rupee may add downside pressure on the prices. Technical Outlook valid for May 20, 2013
MCX Copper April13 MCX Zinc April 13 MCX Lead April 13 MCX Aluminum April13 MCX Nickel April 13 Unit Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg Support 402/398 99.50/98.50 109.9/109 100.5/99.8 807/798 Resistance 408/412 101/102.8 111.3/112.2 102/102.8 825/833

$/tonne

14830.0

-0.3

-4.0

-2.3

-13.4

Rs /kg

817.1

0.3

-3.5

-0.1

-12.4

$/tonne

2014.0

1.0

0.8

-0.2

3.9

Rs /kg

111.1

1.7

1.5

2.7

5.2

$/tonne

1841.8

0.5

-1.4

-1.9

-3.1

Rs /kg

100.6

1.2

-1.0

0.7

-2.7

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 17th May 629,950 5,238,500 177,948 1,113,875 240,875 16th May 624,400 5,230,925 178,776 1,115,975 243,250 Actual Change 5,550 7,575 -828 -2,100 -2,375 (%) Change 0.9 0.1 -0.5 -0.2 -1.0
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Monday| May 20, 2013

International Commodities
Important Events for Today
Indicator French Bank Holiday German Bank Holiday FOMC Member Evans Speaks Country Europe Europe US Time (IST) All Day All Day 10:30pm Actual Forecast Previous Impact Medium

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