Commodity Weekly Report

Commodity
24th January - 29th January 2011
WEEKLY

Metals ends lower on China’s

monetary policy !

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Economic Data

Weekly Report

Commodity
Date Time Currency Economic Data Forecast Previous

Tue Tentative USD Treasury Currency Report

Jan 25
7:30pm USD S&P/CS Composite-20 HPI y/y -1.4% -0.8%

8:30pm USD CB Consumer Confidence 54.5 52.5

8:30pm USD HPI m/m -0.1% 0.7%

8:30pm USD Richmond Manufacturing Index 23 25

Wed All Day USD WEF Annual Meetings

Jan 26
8:30pm USD New Home Sales 303K 290K

9:00pm USD Crude Oil Inventories 2.6M

Thu 12:45am USD FOMC Statement 0.56M 0.54M

Jan 27
12:45am USD Federal Funds Rate <0.25% <0.25%

All Day USD WEF Annual Meetings

7:00pm USD Core Durable Goods Orders m/m 0.9% 3.6%

7:00pm USD Unemployment Claims 409K 404K

7:00pm USD Durable Goods Orders m/m 1.6% -0.3%

8:30pm USD Pending Home Sales m/m 1.1% 3.5%

9:00pm USD Natural Gas Storage -243B

Fri All Day USD WEF Annual Meetings

Jan 28
7:00pm USD Advance GDP q/q 3.5% 2.6%

7:00pm USD Advance GDP Price Index q/q 1.8% 2.1%

7:00pm USD Employment Cost Index q/q 0.5% 0.4%

8:25pm USD Revised UoM Consumer Sentiment 73.1 72.7

8:25pm USD Revised UoM Inflation Expectations 3.3%

Sat All Day ALL WEF Annual Meetings

Jan 29

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Fundamental Market Overview

Weekly Report

Commodity
GOLD NOTCHES THIRD WEEKLY LOSS AS SAFE HAVEN WANES
Gold prices fell for a second day on Friday as a stronger appetite for riskier assets such as equities and an improving economic outlook diminished
safe-haven buying, more than offsetting a weaker dollar. Bullion notched a third consecutive weekly loss, its longest since July, and that called into
question the metal's lengthy Bull Run due to signs that the economic recovery is taking hold and as fears about an European debt crisis have
subsided for now. Gold prices fell on Friday as safe-haven demand faded; a day after the metal was pushed down nearly 2 percent to two-month lows
as investors sold bullion together with equities and commodities like crude oil and copper that are perceived as riskier. German business sentiment
rose to its highest level in 20 years in January, surging past economists' forecasts on a strong manufacturing sector. The bright European report
followed a raft of strong U.S. economic data, including encouraging jobs and housing numbers on Thursday. Spot Gold fell 0.2 percent to $1,343 an
ounce. U.S. Gold futures for February delivery settled down $5.50 at $1,341 an ounce. Bullion hit a low of $1,337.50, their weakest price since Nov.
18, as financial markets opened in New York. U.S. traders cited an increase in margin requirements for precious metals futures as a reason for the
decline. The latest trade report by the U.S. Commodity Futures Trading Commission (CFTC) showed that net long positions in U.S. Gold futures
contracts held by speculators dropped sharply by 7 percent for a second week. In the previous week, speculators' net longs declined over 12
percent, suggesting investors liquidated bullish positions and large funds might have exited the market. Silver inched up 0.2 percent to $27.53 an
ounce. The Gold-to-Silver ratio -- the number of ounces of Silver needed to buy an ounce of Gold - rose back towards 50, its highest level since late
November, as some traders believed Gold is becoming increasingly expensive relative to silver.

CRUDE ENDS WEEK DOWN 2 PCT ON RISING SUPPLY

U.S. Crude oil futures fell for the fourth straight day on Friday, ending the week more than 2 percent weaker as rising domestic stockpiles weighed.
U.S. Crude losses deepened as investors continued to factor government inventory data on Thursday which showed domestic inventories rose last
week, after an unbroken stretch of drawdowns in the previous six weeks. Resumption of operations earlier this week of the Trans Alaska Pipeline, a
major artery for U.S. Crude production, after a disruption due to a leak, also pressured prices. Earlier in the day, new front month March Crude rose
above $90 a barrel as the dollar weakened, a factor that helped curb losses on the day.
Fundamentals
U.S. Crude oil futures fell for the fourth straight day on Friday, ending the week more than 2 percent weaker as rising domestic stockpiles weighed.
U.S. Crude losses deepened as investors continued to factor government inventory data on Thursday which showed domestic inventories rose last
week, after an unbroken stretch of drawdowns in the previous six weeks. Resumption of operations earlier this week of the Trans Alaska Pipeline, a
major artery for U.S. Crude production, after a disruption due to a leak, also pressured prices. Earlier in the day, new front month March Crude rose
above $90 a barrel as the dollar weakened, a factor that helped curb losses on the day.

COPPER ENDS FIRM AS CHINA TIGHTENING FEARS EASE

Copper bounced nearly one percent on Friday, snapping a two-day slide that dragged prices to their lowest level in a month, as the dollar weakened
and on worries about more monetary tightening in top-consumer China abated. Copper prices -- down as much as 5 percent from all-time record
peaks at $9,781 per tonne in London this week and $4.4980 per lb in New York earlier this month -- found their footing on Friday, as investors
reassessed global demand prospects for the industrial metal. London Metals Exchange (LME) Copper for three-month delivery rose $86, or 0.92
percent, to end at $9,441 a tonne. COMEX March Copper firmed 3.70 cents to settle at $4.3090 per lb. Demand concerns flared up on Thursday as
investors equated robust fourth-quarter growth and rising inflation in the metal-consuming giant as a bearish development, likely to trigger a new
round of monetary tightening. China is the world's largest Copper consumer, representing 40 percent of global metals demand. Indeed, German
business confidence rose to its highest level in 20 years in January on the back of a manufacturing sector now fully recovered from the 2008 financial
crisis. Copper also benefited from a weaker U.S. dollar, which fell to a two-month low against the euro amid improving confidence in the euro zone. A
weaker U.S. currency makes dollar-priced commodities more affordable for holders of other currencies.

Demand Destruction
Record prices in Copper could cause demand destruction as industry switches to cheaper aluminum instead, said Standard Bank said in a research
note. One area where substitution could increase is air conditioning, with aluminum piping replacing Copper. Aluminum stocks jumped by 64,000
tonnes to 4,550,325 tonnes, up by more than 6 percent so far this year alone. Lead stocks last fell 175 tonnes to 264,175 tonnes, after touching their
highest level since May 1995 on Wednesday. The backwardation on lead - a premium for cash material over the three-month contract - rocketed to
$80 a tonne; it's highest since October 2007. This compared with a backwardation of $31 earlier this week. Data on Friday continued to show a
dominant position controlling 80 to 90 percent of the stock warrants and cash contracts on LME lead. Lead closed down $12 at $2,425 a tonne. Tin
rose to touch a record of $27,750 as investors focused on supply deficit expectations and the weaker dollar. The metal climbed $845 to end at
$27,745.

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Technical Analysis

Weekly Report

Commodity
GOLD
Script R3 R2 R1 PP S1 S2 S3

Levels 1436 1394 1367 1352 1325 1310 1268

Market Overview
COMEX Gold is in an upward consolidation phase. Last week COMEX Gold closed near to its weekly
low. In the coming week 1310$ will act as a major support in COMEX Gold, if COMEX Gold sustains
above 1325$ an ounce then above 1355 $ an ounce it can touch the level of 1375$ an ounce and if
COMEX Gold sustains below 1310$ then it can slightly correct and test the level of 1270$ an ounce.

Strategy
For the next week traders can use buy on lower level strategy if COMEX Gold sustains above 1310$ an
ounce, then above 1355$ it can test the level of 1380$ an ounce and above 1400$ it can further move
upward. Trade by keeping the strict stop losses.
Major support for COMEX Gold in the coming week is 1310$ and 1260$.
Major resistance for COMEX Gold in the coming week is 1400$ and 1435$
Major support in MCX Gold is 19800 and 19250
Major resistance in MCX Gold is 20550 and 20850

SILVER
Script R3 R2 R1 PP S1 S2 S3

Levels 3281 3040 2891 2799 2650 2558 2317

Market Overview
COMEX Silver is technically weak on charts. Last week COMEX Silver broke its crucial level of 2800$
and closed below it. For the upcoming week 2630$ and 2500$ are the crucial supports and 3000$ and
3130$ are crucial resistance in COMEX Silver. In MCX Silver 44300 and 45800 will act as major
resistance and 40600 and 38500 will act as major supports.

Strategy
Technically COMEX Silver is weak, For the next week traders can use buy on lower level strategy if
Silver sustains above the level of 2630$ an ounce, then above 2900$ an ounce it can further go upward
and can test the level of 2960$ an ounce. Trade by keeping the proper stop losses.

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Technical Analysis

Weekly Report

Commodity
CRUDE OIL
Script R3 R2 R1 PP S1 S2 S3

Levels 96.48 93.25 91.18 90.02 87.95 86.79 83.56

Market Overview
NYMEX Crude is in upward consolidation phase. Last week Crude oil was facing stiff resistance near
93$ level. For the coming week 86$ will act as major support and 93.50$ a barrel will be a major
resistance. In MCX Crude Oil major resistance is found at 4190 and 4300 and major supports will be
3950 and 3750.

Strategy
For the next week traders can use sell on higher level strategy, if NYMEX Crude sustains below the
level of 88.00$ a barrel then below 87.20$ it can slightly come down and touch the level of 86$ a barrel
and in MCX below 4050 Crude oil can touch the level of 3990. Trade by keeping the proper stop loss.

COPPER
Script R3 R2 R1 PP S1 S2 S3

Levels 481.30 457.40 444.15 433.50 420.25 409.60 385.70

Market Overview
Copper is in an upward consolidation phase and traders should use the strategy of sell on higher
levels. Last week COMEX Copper was bearish for most part of the week and was not sustaining at
higher levels but we saw some good short covering at the end of the week. If next week COMEX
Copper sustains below the level of 440 then below the level of 421 Copper can test the level of 415. In
MCX Copper below 429 Copper can test the level of 422 if it does not break the level of 438 on the
upside.

Strategy
For the upcoming week 450 and 460 will act as major resistance and 415 and 405 will act as major
supports in COMEX Copper. For MCX Copper major resistance would be 450 and 460 and supports
would be found at 419 and 408.

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Technical Analysis

Weekly Report

Commodity
NATURAL GAS
Script R3 R2 R1 PP S1 S2 S3

Levels 5.413 5.023 4.880 4.633 4.490 4.243 3.853

Market Overview
Natural Gas is in a consolidation phase and traders should use the strategy of buying on lower levels.
Last week Natural Gas sustained on higher level and closed near to its weekly high. If next week
Natural Gas does not sustains above the level of 4.380$ then above the level of 4.825$ Natural Gas
can test the level of 4.950 $ and below 4.300$ Natural Gas can slightly go down and test the level of
4.200$. In MCX, if Natural Gas sustains above 224 in the coming week then it can test the level of 230,
if it does not break the level of 197 on the downside.

Strategy
For the upcoming week 4.320$ and 3.990$ will act as major supports and 5.000$ and 5.200$ will act as
major resistance in US Natural Gas. For MCX Natural Gas major resistance would be 225 and 235,
supports would be found at 197 and 185.

USD / INR
Script R3 R2 R1 PP S1 S2 S3

Levels 46.8100 46.1800 45.9000 45.5500 45.2700 44.9200 44.2900

Market Overview
USD/INR is consolidating on charts so traders can use the strategy of buying on lower levels. If next
week USD/INR sustains above the level of 45.2000 then above the level of 45.9000 USD/INR can test
the level of 46.2500 and below 45.2000USD/INR can slightly go down and test the level of 44.9000.

Strategy
For the upcoming week 44.5000 and 43.8000 will act as major supports and 46.4000 and 47.1000 will
act as major resistance in USD/INR.

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 Weekly Market Update

Weekly Report

Commodity
Weekly
Exch- Expiry Commodity Previous Qty. Open
Symbol Price Unit Open High Low Close Net TurnOver
ange Date Name Close Traded Interest (Rs. in Lakhs)

Gold MCX 5-FEB-11 Gold Rs./ 10gm 20261 20285 20425 19972 20069 171009 -192 18438 3461228.49

Silver MCX 05-Mar-11 Silver RS./ KG. 43842 43877 44970 42253 42708 404847 -1134 27066 5302717.44

Copper MCX 28- FEB-11 Copper RS./ KG. 446.6 445.85 448.75 430.65 437.85 553989 -8.75 28951 2442575.19

Crude Oil MCX 21- FEB-11 Crude Oil RS./ BBL. 4230 4230 4247 4086 4099 415151 -131 20380 1727116.69

Natural Gas MCX 23- FEB-11 Natural Gas RS./ MM BTU 206.2 206.5 220 203.1 219.2 39155 13 5452 515611.40

Lead MCX 31- JAN -11 Lead RS./ KG. 122.8 122.25 122.85 112.25 113.25 125272 -9.55 6040 734982.19

Zinc MCX 31- JAN -11 Zinc RS./ KG. 111.85 111.4 112.35 105.65 106.1 119155 -5.75 8226 648736.29

Nickel MCX 31- JAN -11 Nickel RS./ KG. 1186.1 1184.5 1205 1157.3 1196.6 299656 10.5 8617 885868.39

Aluminum MCX 31- JAN -11 Aluminium RS./ KG. 112.25 112.35 112.65 108.3 109.75 34923 -2.5 2892 192503.00

WEEKLY GAINERS INTERNATIONAL MARKET UPDATE WEEKLY

Commodity Expiry Date Closing Price % Change Commodity Closing Price % Change

NATURAL GAS 23- FEB-11 219.2 6.31 GOLD 1341 -1.43

NICKEL 31-JAN -11 1196.6 0.86 SILVER 2742.7 -3.15

COPPER 430.9 -2.33

CRUDE 89.11 -2.65

WEEKLY LOOSERS
NATURAL GAS 4.736 5.71
Commodity Expiry Date Closing Price % Change
USD/INR 45.62 0.60
LEAD 31-JAN -11 113.25 -7.78

ZINC 31-JAN -11 106.1 -5.14

CRUDE OIL 21-FEB-11 4099 -3.10

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Weekly Pivots

Weekly Report

Commodity
Scripts R3 R2 R2 PP S1 S2 S3

Gold 21061.33 20608.33 20338.67 20155.33 19885.67 19702.33 19249.33

Silver 48744.33 46027.33 44367.67 43310.33 41650.67 40593.33 37876.33

Copper 475.28 457.18 447.52 439.08 429.42 418.97 402.88

Crude Oil 4466.00 4305.00 4202.00 4144.00 4041.00 3983.00 3822.00

Natural Gas 247.90 231.00 225.10 214.10 208.20 197.20 180.30

Lead 137.32 126.72 119.98 116.12 109.38 105.52 94.92

Zinc 121.43 114.73 110.42 108.03 103.72 101.33 94.63

Nickel 1281.70 1234.00 1215.30 1186.30 1167.60 1138.60 1090.90

Aluminum 118.93 114.58 112.17 110.23 107.82 105.88 101.53

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