Commodities Daily Report

Wednesday| September 12, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Overview:

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135 Anish Vyas - Research Associate anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Wednesday| September 12, 2012

International Commodities
Overview
US Trade Balance was at a deficit of $42 billion in July. German WPI increased to 1.1 percent in the last month. UKs Trade Balance was at a deficit of 7.1 billion Pounds in July. US Dollar Index (DX) slips below the 80-mark in yesterdays trade. Japans Core Machinery Orders increased by 4.6 percent in July.
INR/$ (Spot) Last 55.25 Prev day 0.3 w-o-w 0.6 m-o-m 0.6 y-o-y -14.5

Market Highlights (% change)

as on 11 September, 2012

Asian markets are trading on a positive note on the back of rise in risk appetite in the global markets as a result of expectations that China and US will take stimulus measures to boost the economic growth. US Trade Balance was at a deficit of $42 billion in July as against a previous deficit of $41.9billion a month ago. Investor's Business Daily (IBD) / Techno Metrica Institute of Policy and Politics (TIPP) Economic Optimism increased by 6.2 points to 51.8-mark in September from previous rise of 45.6-level in August. The US Dollar Index (DX) declined by 0.6 percent on the back of rise in risk appetite in the global markets which led to fall in demand for the low yielding currency. The currency declined taking cues from expectations of stimulus measures from US and China to boost the economic growth in the world largest two economies. Additionally, US equities also ended on an upbeat note which added downside pressure on the currency. It touched an intra-day low of 79.77 in yesterdays trading session and closed at 79.84 on Tuesday. The Indian Rupee appreciated by 0.3 percent in the yesterdays trading session. The currency appreciated taking cues from increase in the FII inflows coupled with expectations of stimulus measures from US and China. Additionally, a weaker DX also supported further upside in the currency. However, dollar demand from the oil companies capped sharp positive movement in the currency. It touched an intra-day high of 55.25 in yesterdays trade and closed at same level on Tuesday. For the current month, FII inflows totaled at Rs 1,340.80 crores till 11 September 2012. While year to date basis, net capital inflows stood at Rs 64,410.40 crores till 11th September 2012.
th

$/Euro (Spot)

1.2854

0.8

2.3

4.3

-6.0

Dollar Index

79.84

-0.6

-1.8

-3.3

2.8

NIFTY

5390.0

0.5

2.2

0.2

9.0

SENSEX

17853.0

0.5

2.4

0.7

8.2

DJIA

13323.4

0.5

2.2

1.1

20.5

S&P

1433.56

0.3

2.0

2.0

19.6

Source: Reuters

The Euro increased 0.5 percent in yesterday session on expectations that German constitutional court might clear the way for ruling on the $500 billion euro ($640 billion) on September 12, 2012. Additionally, weakness in the DX along with favorable economic data from the region is also supported an upside in the currency. It touched a high of 1.2871 and closed at 1.2854 on Monday. French Final Non-Farm Payrolls remained unchanged at -0.1 percent in Q2 of 2012. German Wholesale Price Index (WPI) increased to 1.1 percent in August as against a rise of 0.3 percent in July. Japans Core Machinery Orders increased at slow pace of 4.6 percent in July as against a previous rise of 5.6 percent a month ago. Tertiary Industry Activity declined by 0.8 percent in July from earlier rise of 0.2 percent in June. Corporate Goods Price Index (CGPI) declined by 1.8 percent in August as compared to previous decline of 2.2 percent in July.

UKs Trade Balance was at a deficit of 7.1 billion Pounds in July as against a previous deficit of 10.1 billion Pounds a month ago. Japans Prelim Machine Tool Orders declined by 2.6 percent in August as against a previous decline of 6.7 percent in July.

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Commodities Daily Report

Wednesday| September 12, 2012

Bullion Gold

International Commodities

Spot gold prices gained by 0.4 percent on the back of positive global market sentiments ahead of the German constitution court hearing on September 12, 2012 and Federal Reserve policy meeting on September 12-13. Weakness in the DX also added to the gains in the gold prices. Expectation that US Federal Reserve and Chinese government might take stimulus measures to boost the economy created positive market sentiments in yesterdays session. The yellow metal touched an intra-day high of $1,737.80/oz and closed at $1,731.6/oz in yesterdays trading session. On the MCX, Gold October contract declined by 0.1 percent and closed at Rs31,876/10 gms after touching an intra-day low of Rs.31808/10 gms on Tuesday. Appreciation in the Indian Rupee led MCX gold prices to witness correction in yesterdays trade.

Market Highlights - Gold (% change)

Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMAPM Fix) Comex Gold (Dec12) MCX Gold (Oct12) Unit $/oz Rs/10 gms $/oz Last 1731.6 31900.0 Prev day 0.4 0.0

as on 11 September, 2012 WoW 2.2 1.6 MoM 8.4 6.3 YoY -4.5 13.5

1736.8

0.3

2.3

8.7

-5.3

$/oz Rs /10 gms

1731.8

0.2

2.3

8.3

-4.3

31876.0

-0.1

1.4

6.2

14.7

Source: Reuters

Silver
Taking cues strength in gold prices along with weakness in the DX, Spot silver prices increased 0.6 percent in yesterdays trading session. Upside in the base metals complex also added to the gains of the silver prices. The white metal touched an intra-day high of $33.81/oz and closed at $33.49/oz on Tuesday. In the Indian markets appreciation in the Rupee led prices to decline 0.3 percent and closed at Rs.63,804/kg after touching an intra-day low of Rs.63,638/kg in yesterdays trading session.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last 33.5 62900.0 3355.0 3350.9 63804.0 Prev day 0.6 -0.3 -0.1 -0.2 -0.3

as on 11 September, 2012 WoW 3.6 3.2 4.6 3.6 5.3 MoM 20.7 16.1 20.5 20.7 19.4 YoY -16.7 -2.9 -17.8 -16.6 0.0

Outlook
In todays session, we expect precious metals to trade with positive bias due to upbeat global market sentiments ahead of US Federal Reserve meeting September12-13, 2012 and the German constitutional court ruling on September 12,2012. Optimism that stimulus measures might be taken by the US is expected to create positive market sentiments. Weakness in the DX will also act as a supportive factor for the precious metals. In the Indian markets appreciation in the Rupee will cap sharp gains in the prices. Technical Outlook
Unit Spot Gold MCX Gold Oct12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for September 12, 2012 Support 1732/1726 31800/31700 33.49/33.33 63500/63200 Resistance 1740/1745 31980/32050 33.81/34.02 64100/64500

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Wednesday| September 12, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 0.7 percent yesterday taking cues from expectations of stimulus measures from US and China to boost the economic growth coupled with weakness in the DX. However, sharp upside in the prices was capped as a result of rise in US crude oil inventories. Crude oil prices touched an intra-day high of $/bbl and closed at $97.20/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.6 percent and closed at Rs.5,356/bbl after touching an intra-day high of Rs.97.31/bbl on Tuesday. Appreciation in the Indian Rupee restricted further upside in the prices. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories increased unexpectedly by 221,000 barrels to 359.0.1 million barrels for the week ending on 7th September 2012. Gasoline inventories fell by 4.16 million barrels to 197.68 million barrels and whereas distillate inventories gained by 2.55 million barrels to 128.90 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to decline by 2.6 million barrels for the week ending on 7th September 2012. Gasoline stocks are expected to fall by 1.6 million barrels whereas distillate inventories are expected to rise by 0.2 million barrels for the same period. Outlook In todays trade, we expect crude oil prices to trade on a firm note on the back of expectations of stimulus measures from US and China along with weakness in the DX. Expectation of decline in the crude oil inventories will also add to the gains in the crude oil prices. Appreciation in the Indian Rupee however would cap sharp gains in the crude oil prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Sept12 $/bbl Rs/bbl valid for September 12, 2012 Support 96.25/95.52 5310/5270 Resistance 97.70/98.60 5390/5440
Source: Telequote

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Oct12) ICE Brent Crude (Oct12) MCX Crude (Sept12) Unit $/bbl $/bbl Last 97.0 114.6 Prev. day 0.5 0.9 WoW 1.8 -0.7

as on 11 September, 2012 MoM 3.9 0.0 YoY 10.0 -1.7

$/bbl

97.2

0.7

2.0

4.0

10.2

$/bbl

115.4

0.5

1.1

1.2

2.8

Rs/bbl

5356.0

0.6

0.8

2.8

28.8

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Sept12) Unit $/mmbtu Rs/ mmbtu Last 3.006 165.8

(% change)

as on 11 September, 2012

Prev. day 12.80 11.80

WoW 7.36 6.01

MoM 8.01 7.38

YoY -23.74 -10.48

Source: Reuters

Technical Chart Nymex Crude Oil

Technical Chart Nymex Natural Gas

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Commodities Daily Report

Wednesday| September 12, 2012

International Commodities
Base Metals
The base metals pack traded on a positive note in the yesterdays trading session on the back of rise in risk appetite in the global markets along with weakness in the DX. However, mixed LME inventories capped sharp upside in the prices. In the Indian markets appreciation in the Rupee added downside pressure on the prices. Copper Copper, the leader of the base metals complex gained by 0.2 percent in the yesterdays trading session on the back of upbeat global market sentiments along with weakness in the DX. Additionally, decline in LME Copper inventories by 50 tonnes which stood at 214,600 tonnes also supported upside in the prices. The red metal touched a high of $8,127.75/tonne in yesterdays trade and closed at $8,088.30/tonne on Tuesday. On the domestic front, prices gained by 0.1 percent as a result of appreciation in the Indian Rupee and closed at Rs.452.90/kg on after touching a low Rs.449.6/kg in the yesterdays trading session. Outlook In todays session, we expect base metal prices to trade on bullish note on the back of upbeat global market sentiments coupled with weakness in the DX. Additionally expectation of stimulus measures from the US Federal Reserve and the Chinese government to foster growth of the nations is expected to support an upside in the base metals pack. Appreciation in the Rupee will cap sharp gains in the base metal prices in the Indian markets. Technical Outlook
Unit valid for September 12, 2012

Market Highlights - Base Metals (% change)

Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum (Sept12) LME Nickel (3 month) MCX Nickel (Sept12) LME Lead (3 month) MCX Lead (Sept12) LME Zinc (3 month) MCX Zinc (Sept12) Rs /kg 110.2 $/tonne 2011.8 Rs /kg 116.8 $/tonne 2127.0 Rs /kg 927.1 $/tonne 16783.0 Rs /kg 113.7 $/tonne 2073.0 Rs/kg 452.9 $/tonne Last 8088.3

as on 11 September, 2012 WoW 6.0 MoM 9.0 YoY -7.7

Prev. day 0.2

-0.1

5.4

9.2

8.4

0.4

7.0

11.5

-12.7

0.4

5.7

10.8

1.7

0.2

4.9

8.4

-22.2

0.0

3.4

6.9

-9.5

0.2

6.9

14.5

-12.3

-0.2

5.5

12.2

0.5

0.1

7.4

10.3

-9.1

-0.1

5.9

8.4

5.7

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 11 September 214,600 4,862,825 120,810 933,100 300,650
th

10 September 214,650 4,869,925 120,816 938,275 303,150

th

Actual Change -50 -7,100 -6 -5,175 -2,500

(%) Change 0.0 -0.1 0.0 -0.6 -0.8

Source: Reuters

Technical Chart LME Copper

Support Resistance

MCX Copper Nov12

Rs /kg

449/447

454/457

MCX Zinc Sept12

Rs /kg

109.6/109

110.9/111.5

MCX Lead Sept12

Rs /kg

116.1/115.5

117.4/118.2

MCX Aluminum Sept12

Rs /kg

112.5/113

114.1/114.8

MCX Nickel Sept12

Rs /kg

921/916

932/938
Source: Telequote

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Commodities Daily Report

Wednesday| September 12, 2012

International Commodities
Important Events for Today

Indicator Core Machinery Orders m/m Tertiary Industry Activity m/m Italian Industrial Production m/m German Constitutional Court Ruling Claimant Count Change Unemployment Rate Industrial Production m/m MPC Member Broadbent Speaks Import Prices m/m Crude Oil Inventories 10-y Bond Auction

Country Japan Japan Euro Euro UK UK Euro UK US US US

Time (IST) 5:20am 5:20am 1:30pm 1:30pm 2:00pm 2:00pm 2:30pm 4:30pm 6:00pm 8:00pm 10:30pm

Actual 4.6% -0.8% -

Forecast 1.8% -0.4% -0.4% 0.1K 8.0% 0.0% 1.4% -2.6M -

Previous 5.6% 0.1% -1.4% -5.9K 8.0% -0.6% -0.6% -7.4M 1.68/2.5

Impact Medium Medium Medium High High Medium Medium Medium Medium Medium Medium

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