Commodities Daily Report

Wednesday| October 31, 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| October 31, 2012

International Commodities
Overview
RBI cuts CRR by 25 basis points to 4.25 percent. Spanish Flash GDP declined by 0.3 percent Q3 of 2012. German Unemployment Change rose to 20,000 in September. UKs CBI Realized Sales increased to 30-mark in October. Japans Overnight Call Rate unchanged at 0.10 percent in October.

Market Highlights (% change)

Last INR/$ (Spot)
53.96

as on 30 October, 2012

Prev day
0.2

w-o-w
-0.4

m-o-m
-2.9

y-o-y
-9.8

Asian markets are trading on a positive note on the back of better corporate earnings and favorable industrial output in the South Korea along with rise in the home prices in the U.S. US Standard & Poor's (S&P) / Case-Shiller (CS) Composite-20 House Price Index (HPI) increased by 2 percent in August as against a rise of 1.2 percent a month ago. Indias Reserve Bank of India (RBI) kept the repo rates and reserve repo rates unchanged at 8 percent and 7 percent respectively. However, the central bank has cut the Cash Reserve Ratio (CRR) by 25 basis points to 4.25 percent. Additionally, RBI has reduced the Gross Domestic Product (GDP) forecast for India to 5.8 percent from previous estimate of 6.5 percent respectively. While on the other hand, projection for inflation in March was revised to 7.5 percent from earlier 7 percent. US dollar Index (DX) declined 0.4 percent due to rise in the risk appetite amongst market participants and thereby increase in the demand for the low yielding currency that is DX. Trading activity remained subdued and the US markets prepare to reopen today after the powerful Hurricane hit the U.S. east coast. US equities remained shut as Hurricane Sandy hits the east coast of US. The currency touched a low of 79.90 and closed at 80.02 on Tuesday. The Indian Rupee swung between gains and losses and finally appreciated by 0.2 percent in the yesterdays trading session. The currency appreciated in the later part of the trade on the back of rise in risk appetite in the global market sentiments along with weakness in the DX. However, in the early part of the trade currency had depreciated as the central bank had kept key rates unchanged and cutting the forecast of GDP for the current fiscal year. The currency touched an intra-day high of 53.80 and closed at 53.96 on Tuesday. For the current month FII inflows totaled at Rs. 11,521.50 crores till 30 October 2012. While year to date basis, net capital inflows stood at Rs. th 93,852.30 crores till 30 October 2012.
th

$/Euro (Spot)

1.2956

0.4

-0.2

0.3

-6.5

Dollar Index

80.02

-0.4

-0.1

0.2

4.9

NIFTY

5597.9

-1.2

-1.6

-1.8

5.1

SENSEX

18430.9

-1.1

-1.5

-1.8

4.1

DJIA

13107.2

0.0

0.0

-2.8

9.6

S&P

1411.94

-0.1

-0.1

-2.0

9.9

Source: Reuters

Euro gained 0.4 percent taking cues from better corporate earnings. Additionally, weakness in the DX also supported an upside movement in the currency. However, unfavorable data from the region capped sharp gains in the currency in yesterdays session. The currency touched a low of 1.2983 and closed at 1.2956 on Tuesday. Spanish Flash Gross Domestic Product (GDP) declined by 0.3 percent in Q3 of 2012 from previous fall of 0.4 percent in Q2 of 2012. German Unemployment Change was at 20,000 in September as against a rise of 12,000 in August. European Retail Raw Materials Price Index (RMPI) declined by 1.8 points to 45.3mark in October with respect to previous rise of 47.1-level in September. UKs Confederation of British Industry (CBI) Realized Sales increased to 30-mark in October from previous rise of 6-level in September. UKs GfK Consumer Confidence was at -30-level in October as compared to previous mark of -28 in September.

Japans Overnight Call Rate remained unchanged at 0.10 percent in the month of October. Japans Manufacturing Purchasing Managers' Index (PMI) declined by 1.1 points to 46.9-mark in October from previous 48level in September. www.angelcommodities.com

Commodities Daily Report

Wednesday| October 31, 2012

Bullion Gold

International Commodities

Market Highlights - Gold (% change) Spot gold prices swung between gains and losses and finally settled on a flat note today taking cues from upbeat global market sentiments which led to rise in the risk appetite amongst market participants. Better corporate earnings of the Europe also supported an upside in the gold prices in the early part of the trade. Further, weakness in the DX also acted as supportive factor for the gold prices in yesterdays session. Sharp gains were not witnessed as the New York markets remained closed as Hurricane Sandy hit the east coast of U.S. The yellow metal touched an intra-day high of $1,715.39/oz and closed at $1,708.9 on Tuesday. On the MCX, Gold October contract ended on a flat note taking cues from the spot gold prices and depreciation of the Indian Rupee. Gold prices on the MCX closed at Rs.31,089/10 gms after touching an intra-day high of Rs. 31,155/ 10gms.
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Dec12) MCX Gold (Dec12) Unit $/oz Rs/10 gms $/oz Last
1708.9

as on 30 October, 2012 Prev day

0.0

WoW
0.0

MoM
-3.9

YoY
-0.3

30615.0

-0.9

-0.3

-2.4

12.0

1710.0

0.2

-0.1

-3.7

-0.7

$/oz Rs /10 gms

1710.5

0.2

0.1

-3.5

-0.8

31089.0

0.0

0.4

-0.4

13.7

Source: Reuters

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
31.8 60780.0 3203.0

as on 30 October, 2012 WoW

0.5 1.5 1.0

Silver
Spot silver prices gained 0.2 percent higher taking cues firmness in the spot gold prices and strength in the base metals pack. Weakness in the DX also acted as a supportive factor of the silver prices on Tuesday. The white metal touched an intra-day high of $32.12/oz and closed at $31.8/oz on Tuesday. In the Indian markets, MCX silver prices settled on a flat note after trading firm in most part of the trading session. Prices closed at Rs. 59,399/kg on Tuesday after touching an intra-day high of Rs.59,820/kg. Depreciation in the Indian rupee also acted as a supportive factor for the MCX silver prices.

Prev day
0.2 0.1 0.7

MoM
-8.0 -2.3 -8.1

YoY
-6.9 8.0 -6.5

3178.8

0.2

0.1

-8.1

-7.4

59398.0

0.0

0.4

-5.4

5.3

Source: Reuters

Technical Chart Spot Gold

Outlook
In todays session we expect precious metals to trade with upward bias on the back of positive global market sentiments along with weakness in the DX. Investors are also awaiting unemployment data from the U.S. So they are following a wait and watch stance. In the domestic market depreciation in the Indian rupee is expected to support an upside in the precious metals on MCX. Technical Outlook
Unit Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for October 31, 2012 Support 1705/1699 30980/30880 31.70/31.54 59100/58800 Resistance 1716/1720 31180/31260 31.97/32.13 59600/59900
Source: Telequote

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Commodities Daily Report

Wednesday| October 31, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices gained 0.2 percent due to better corporate earnings that raised confidence and expectations that demand might witness a rise due to global recovery. Further, six refineries curbed production accounting for 1.22 million barrels of the areas crude processing capacity of 1.29 million barrels a day because of Hurricane Sandy. Crude oil prices touched an intra-day high of $86.24/bbl and closed at $85.69/bbl on Tuesday. On the domestic bourses, prices declined 0.2 percent and closed at Rs.4,663/bbl after touching a high of Rs.4,683/bbl in yesterdays session. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories increased more than expected by 2.1 million barrels to 371.70 million barrels for the week ending on 26th October 2012. Gasoline inventories declined around 173,000 barrels and whereas distillate inventories fell by 2.6 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) which was scheduled to release its weekly inventories report today at 8:00pm IST will be released tomorrow because of disruption from Tropical Storm Sandy and US crude oil inventories is expected to rise by 1.5 million barrels for the week ending on 26th October 2012. Gasoline stocks are expected to remain gain by 0.2 million barrels whereas distillate inventories are expected to drop by 1.3 million barrels for the same period. Outlook In the intra-day, we expect crude oil prices to trade on a negative bias on the back of sufficient US crude oil inventories. Weakness in the DX along with upbeat global market sentiments is expected to cushion sharp fall in the crude oil prices. In the domestic markets depreciation in the Indian rupee is expected to cushion sharp fall in the MCX crude oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Nov 12 $/bbl Rs/bbl valid for October 31, 2012

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Dec12) ICE Brent Crude (Dec12) MCX Crude (Nov12) Unit $/bbl $/bbl Last
85.6 110.3

as on 30 October, 2012 WoW

-1.2 1.8

Prev. day
0.1 0.1

MoM
-6.8 -2.4

YoY
-8.2 1.2

$/bbl

85.7

0.2

-1.1

-6.8

-8.1

$/bbl

109.1

-0.3

0.8

-2.2

-0.4

Rs/bbl

4663.0

0.3

-0.1

-4.7

3.3

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Nov 12)

as on 30 October, 2012

Unit $/mmbtu Rs/ mmbtu

Last
3.705 200.9

Prev. day
-2.76 -3.74

WoW
5.08 5.29

MoM
12.89 14.60

YoY
-5.68 4.47

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

Support 85.0/84.26 4620/4580

Resistance 86.29/87.02 4690/4730

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Commodities Daily Report

Wednesday| October 31, 2012

International Commodities
Base Metals
The base metals pack traded on a positive note in yesterdays trading session on the back of rise in risk appetite in the global markets coupled with weakness in the DX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) $/tonne Last
7735.0

as on 30 October, 2012 WoW

-1.5

Prev. day
0.1

MoM
-7.0

YoY
-3.4

However, mixed LME inventories scenario capped sharp upside (Nov12) movement in the prices. In the Indian markets, appreciation in the Rupee prevented sharp upside in the prices.

MCX Copper

Rs/kg

421.2

0.1

-1.3

-4.4

7.2

LME Aluminum (3 month) MCX Aluminum (Oct12)

$/tonne

1918.8

0.7

-1.7

-8.8

-13.5

Rs /kg

101.9

0.5

-2.2

-7.6

-4.6

Copper
Copper, the leader of the base metals complex increased 0.1 percent due to improved buying at lower levels amidst weakness in the DX. However, sharp upside in the prices was capped as demand from the major consumer China remained sluggish.

LME Nickel (3 month) MCX Nickel (Oct12) LME Lead (3 month) MCX Lead

$/tonne

16097.0

0.9

-1.9

-13.0

-18.1

Rs /kg

864.2

0.4

-2.0

-11.6

-8.2

$/tonne

2046.3

1.7

0.6

-10.8

-1.4

Rs /kg

111.2

1.8

1.5

-8.1

14.7

Rise in LME Copper inventories by 0.03 percent also restricted sharp (Oct12) gains in the Copper prices on Tuesday. LME Copper stocks stood at LME Zinc 2,40,525 tonnes. The red metal touched an intra-day high of (3 month) $7,778/tonne and closed at $7,735/tonne on Tuesday.
MCX Zinc

$/tonne

1858.5

1.6

0.2

-11.4

-5.9

Rs /kg

98.0

1.2

0.0

-10.7

4.6

On the domestic front, prices increased by 0.1 percent and closed at (Oct12) Rs.421.2/kg after touching a high of Rs.423.5 /kg. Depreciation in the LME Inventories Indian rupee also supported an upside in the copper prices.
Unit 30th October
240,525 5,083,150 129,720 1,174,750 321,300

Source: Reuters

29th October
240,450 5,060,825 128,934 1,177,800 323,200

Outlook From the intraday perspective, base metal prices are expected to trade on a positive note due to positive global market sentiments. Announcement of stimulus measures in Japan may boost the demand for the red metal. Additionally, weakness in the DX is expected to add to the gains in the base metals pack. Depreciation in the Rupee will act as a supportive factor for the base metal prices on MCX. Technical Outlook
Unit MCX Copper Nov12 Rs /kg valid for October 31, 2012 Support 419/416 Resistance 424/428

Actual Change
75 22,325 786 -3,050 -1,900

(%) Change
0.0 0.4 0.6 -0.3 -0.6 Source: Reuters

Copper Aluminum Nickel Zinc Lead

tonnes tonnes tonnes tonnes tonnes

Technical Chart MCX Copper

MCX Zinc Oct12

Rs /kg

97.3/96.5

98.8/99.5

MCX Lead Oct12

Rs /kg

110.5/109.8

112.2/113

MCX Aluminum Oct12

Rs /kg

101.1/100.5

102.5/103.3
Source: Telequote

MCX Nickel Oct12

Rs /kg

857/851

869/874

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Commodities Daily Report

Wednesday| October 31, 2012

International Commodities
Important Events for Today

Indicator Average Cash Earnings y/y German Retail Sales m/m French Consumer Spending m/m Eurogroup Meetings CPI Flash Estimate y/y French 10-y Bond Auction Unemployment Rate Employment Cost Index q/q Chicago PMI Crude Oil Inventories MPC Member Bean Speaks

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

Time (IST) 7:00am 12:30pm 1:15pm All Day 3:30pm Tentative 3:30pm 6:00pm 7:15pm 8:00pm 11:30pm

Actual 0.0% -

Forecast -0.3% 0.6% 0.2% 2.5% 11.4% 0.5% 51.0 1.6M -

Previous 0.0% 0.3% 0.4% 2.6% 2.28/2.2 11.4% 0.5% 49.7 5.9M -

Impact Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium

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