Commodities Daily Report

Monday| December 31, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135

Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104view:

D Vijiya Rao - Research Analyst vijiya.d@angelbroking.com (022) 2921 2000 Extn. 6134view

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Commodities Daily Report

Monday| December 31, 2012

International Commodities
Overview
US Pending Home Sales rose 1.7 percent in the month of November. Italian 10-y Bond Auction yields rose to 4.48|1.5 levels. US Chicago PMI rose to 51.6 levels in the month of December French Consumer Spending m/m rose to 0.2 percent in November.

Market Highlights (% change)

Last INR/$ (Spot)
54.76

as on 28 December, 2012

Prev day
0.3

w-o-w
0.6

m-o-m
1.7

y-o-y
-3.4

Asian markets are trading on a bearish note as the US fiscal cliff issue remains unresolved. The US law makers are holding discussion today also to avert the $600 million budget deficit. However positive manufacturing data from the China is expected to cushion sharp fall.

$/Euro (Spot)

1.3214

-0.2

0.2

2.0

2.2

US Pending home sales data increased 1.7 percent in the month of November as compared to 5 percent in month of October. Chicago PMI rose to 51.6 levels in the month of December as compared to 50.4 levels in November.

Dollar Index

79.79

0.1

0.1

-0.7

-1.4

NIFTY

5908.4

0.7

1.0

3.2

25.6

US Dollar Index (DX) remained volatile throughout the week. The index settled 0.1 percent higher week on week as the talks amongst the US law makers remained stalled. This caused risk aversion in the global markets and increased the demand for low yielding currency that is DX. US equities settled lower on weekly basis due to lingering concerns fo the fiscal cliff issue. Equities had earlier witnessed strength on hopes that President Barack Obama and US law makers might be able to strike a deal over the issue. But the stalemate condition caused risk aversion and caused bearish market sentiments. The index touched a Weekly high of 79.69 and closed at 79.79 on Friday.

SENSEX

19444.8

0.6

1.1

3.2

23.6

DJIA

12938.11

-1.2

-1.9

-0.4

6.5

S&P

1385.0

-2.1

-3.0

-0.4

11.2

Source: Reuters

The Indian Rupee appreciated 0.6 percent on weekly basis due to sustained capital inflows from the foreign institutions along amidst selling of dollars by the exporters. The currency had witnessed volatile trend during the week taking cues from the international markets which were deriving the movement from the fiscal cliff issue of the US which remained unresolved yet. In the domestic market, the participants also adopted a cautious approach before the trade data scheduled to be released on December 31st 2012. The rupee closed at 54.76 after touching a high of 54.68 in the last week. For the current month FII inflows totaled at Rs. 24,183.30 crores. While for the year 2012, net capital inflows stood at Rs. 1,27,455.30 crores.

Euro ended 0.2 percent higher on a weekly basis. Strength in the Euro was on reports that German Finance Minister said that the worst of the euro zone debt crisis is over. However, towards the end of the week unfavorable data from the region and the stalemate condition over the US fiscal cliff issue created risk aversion and supported an upside in the US Dollar Index. The currency touched a weekly high of 1.3284 and closed at 1.3214 on Friday. Italian 10-y Bond Auction yields rose to 4.48|1.5 levels indicating a rise in the borrowing costs. French Consumer Spending m/m rose to 0.2 percent in November as compared to a decline of 0.1 percent in the month of October.

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Commodities Daily Report

Monday| December 31, 2012

Bullion Gold

International Commodities

Market Highlights - Gold (% change)

Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Feb13) MCX Gold (Feb13) Unit $/oz Rs/10 gms $/oz
1654.9 -0.5 30370.0 -0.2

as on 28 December, 2012 Prev day

-0.5

Spot gold prices declined 0.1 percent week on week due to long liquidation by the market participants at the end of the year. Strength in the DX also acted as bearish factor of the gold prices. However, gains were witnessed in the early part of the week on the back of safe haven buying by the market participants as US fiscal cliff issue stands unresolved as the deadline nears. (January 1st 2013). The yellow metal touched a weekly low of $ 1,1635.24/oz and closed at $ 1,654.9 per ounce on Friday. On the MCX, Gold February contract ended 0.7 percent lower on account of appreciation in the Indian rupee and traced bearishness in the spot gold prices. Gold prices on the MCX closed at Rs. 30,663/10 gms on Friday after touching a weekly low of Rs. 30,621/ 10gms.

Last
1654.9

WoW
-0.1

MoM
-3.7

YoY
6.6

0.3

#N/A

12.5

1657.5

0.4

0.4

-3.0

3.2

-0.3

-3.6

5.9

$/oz Rs /10 gms

30663.0 -0.5 -0.7 -3.9 10.9

Source: Reuters

Silver
Spot silver witnessed mild gains of 0.1 percent week on week taking cues from firmness in the base metals pack. However, strength in DX along with bearishness in spot gold prices capped gains in the silver prices. The white metal touched a weekly high of $ 29.61/oz and closed at $ 30.0 per oz on Friday. In the Indian markets, MCX silver prices fell 1.3 percent and closed at Rs. 57,516/kg on Friday and touched a weekly low of Rs. 57,440 / kg. Appreciation in the Indian rupee exerted downside pressure on silver prices on MCX.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg $/oz
2992.0 -0.9 57846.0 30.2 0.1 1.3

as on 28 December, 2012 WoW

0.1

Last
30.0

Prev day
-0.5

MoM
-11.1

YoY
10.9

0.1 0.9 -0.7

-9.7 -10.9 -11.2

11.3 5.2 10.0

$/ oz
57516.0 -1.1 -1.3 -8.9 #N/A

Rs / kg
Source: Reuters

Outlook
In the intra-day, we expect precious metals to remain volatile as the US fiscal cliff issue remains unresolved as the deadline to avert the same nears. Safe haven buying by the market participants might be initiated. US law makers are expected to discuss the issue today also. Silver prices are expected to trade firm taking cues from strength in the industrial metals. In the domestic markets depreciation in the Rupee will act as a supportive factor for the precious metals on MCX. Technical Outlook
Unit Spot Gold MCX Gold Feb13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for December 31, 2012 Support 1656/1652 30620/30550 30.05/29.90 57400/57200 Resistance 1663/1667 30750/30820 30.30/30.50 57900/58200
Source: Telequote

Technical Chart Spot Gold

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Commodities Daily Report

Monday| December 31, 2012

Energy Crude Oil

International Commodities
Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Feb13) ICE Brent Crude (Feb13) MCX Crude (Jan12) Unit $/bbl $/bbl Last
90.7 110.9

Nymex crude oil prices gained 2.41 percent in the last week due to decline in US crude oil inventories. However, strength in the DX capped gains in the crude oil prices. Additionally, US fiscal cliff which remained unresolved led to expectations that it can threaten the economic growth and affect demand for the fuel. Crude oil prices touched a weekly high of $91.49/bbl and closed at $90.71/bbl in the last trading session of the week. On the domestic bourses, prices rose but appreciation in the Indian Rupee capped sharp gains and closed at Rs. 4,995/bbl on Friday after touching a high of Rs.5,040/bbl in the last week.. EIA Inventories Data As per the US Energy Department (EIA) report on Friday, US crude oil inventories declined less than expectations by 586,000 barrels to 371.10 million barrels for the week ending on 21st December 2012. Gasoline stocks rose by 3.78 million barrels to 223.10 million barrels and whereas distillate stockpiles gained by 2.42 million barrels to 119.40 million barrels for the last week.. Natural Gas: On a weekly basis, Nymex natural gas prices gained by more than 3 percent on the back of decline in US natural gas inventories coupled with expectations of cooler winter weather. However, strength in the DX capped sharp gains in the gas prices. Natural gas prices touched a weekly high of $3.469/mmbtu and closed at $3.46/mmbtu in the last trading session of the week. On the domestic front, prices gained and touched a weekly high of Rs.192.80/mmbtu and closed at Rs.191.40/mmbtu on Friday. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories on Friday and US natural gas inventory declined as than expected by 72 billion cubic feet (bcf) which stood at 3.652 trillion cubic feet for the week ending on 21st December 2012. Outlook In the intra-day we expect crude oil prices to remain bearish as the US law makers discuss over the fiscal issue which still remains unresolved. st, The deadline to avert the fiscal cliff issue is December 31 2012. This is expected to raise worries that US economy might be pushed back to recession if the issue is not solved. Strength in the DX is also expected to exert downside pressure on the crude oil prices. In the domestic market depreciation in the rupee is likely to act as a supportive factor for the crude oil prices on MCX. Technical Outlook valid for December 31, 2012
Unit NYMEX Crude Oil MCX Crude Jan 13 $/bbl Rs/bbl Support 90/89.30 4960/4920 Resistance 91.30/92 5030/5070

as on 28 December,2012 WoW
2.8 -0.1

Prev. day
-0.3 -0.3

MoM
5.3 1.5

YoY
-8.8 2.1

90.8 $/bbl
110.6

-0.08

2.41

4.98

-8.62

-0.2

1.5

1.0

2.8

$/bbl
4995.0 0.1 1.7 3.7 #N/A

Rs/bbl
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Dec 12) Unit $/mmbtu Rs/ mmbtu Last 3.469 191.4

(% change)

as on 28 December, 2012

Prev. day 3.43 1.65

WoW 0.52 -0.16

MoM -6.14 -8.99

YoY 12.48 12.79

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

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Commodities Daily Report

Monday| December 31, 2012

International Commodities
Base Metals
The base metals pack traded on mixed note last week with copper and lead ending on a firm note. The prices witnessed an upside on the back of positive data from the US which showed that the labour market and the housing sector are improving. The profits of Chinese industrial firms displayed as increase of 22.8 percent which increased the appetite fro the metals. However, the US fiscal cliff issue still remains unresolved which restricted the rise in the metal prices. MCX base metals prices, tracking the international prices also declined. Appreciation in the rupee was also a supportive factor for the decline of the base metal prices on MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) MCX Aluminum (Dec12) LME Nickel (3 month) MCX Nickel (Dec12) LME Lead (3 month) MCX Lead (Dec12) LME Zinc (3 month) MCX Zinc (Dec12) Rs /kg
111.4 -1.9 -1.5 1.7 #N/A

as on 28 December, 2012 WoW

0.6

Last
7893.5

Prev. day
1.0

MoM
1.9

YoY
3.6

$/tonne

Rs/kg

438.8

-0.5

0.0

1.5

8.8

$/tonne

2060.0

-1.0

-1.1

3.1

2.0

Rs /kg

111.6

-0.8

-1.4

0.4

5.7

$/tonne

17158.0

-0.8

-1.4

1.2

-7.6

Copper
Copper prices increased 0.6 percent in the last week. The increase in the prices was due to the positive data from the US and China. However, the US fiscal cliff issue and rise in the LME inventories excreted downside pressure on the prices. Strength in the DX also exerted downside pressure on the copper prices in the last week. LME Copper inventories increased by 0.22 percent during last week and stood at 318,050 tonnes on Friday as against 317,350 tonnes on 21st December 2012. Prices of Copper on LME touched a weekly high of $7,955.25 per tonne and closed at $ 7,893.50/tonne on Friday. In the domestic markets, MCX copper remained unchanged. In the domestic markets, prices of Copper on MCX touched a weekly high of Rs. 441.90 per kg and closed at Rs. 439.35 per kg on Friday. Outlook From the intraday perspective, the base metals are expected to gain due to positive data from China. However, the unresolved US fiscal cliff issue might exert downside pressure. Strength in the DX might also restrict gains. In the domestic markets, depreciation in the Indian rupee will support an upside in the metal prices on MCX. Technical Outlook
Unit MCX Copper Feb13 MCX Zinc Dec12 MCX Lead Dec12 MCX Aluminum Dec12 MCX Nickel Dec12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for December 31, 2012 Support 437/434 111.9/111.2 126.3/125.5 112.2/111.6 942/935 Resistance 441/443 113.2/114 127.4/128.2 113.4/114 954/962

Rs /kg

940.7

-0.6

-1.8

-0.1

#N/A

$/tonne

2322.8

-0.3

0.8

6.1

14.7

Rs /kg

126.7

-0.5

0.4

3.9

20.1

$/tonne

2058.8

-1.7

-1.1

3.9

10.9

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 28 December
318050 5216675 139074 1223500 323400
th

27 December
318000 5222300 138702 1224575 327650

th

Actual Change 50 -5,625 372 -1,075 -4,250

(%) Change 0.0 -0.1 0.3 -0.1 -1.3

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Monday| December 31, 2012

International Commodities
Important Events for Today

Indicator Bank Holiday HSBC Final Manufacturing PMI German Bank Holiday

Country JPY CNY EUR

Time (IST) All Day 7:15 am All day

Actual -

Forecast 50.9

Previous 50.9

Impact Low Medium Low

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