daily metals and energy report october 7 2013

International Commodities

Content

Overview

Precious Metals

Energy

Base Metals

Important Events for today

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Daily Report October 7, 2013


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Overview

• India’s Services PMI fell to four year low in the month of September

• Spot Gold prices slipped around 2 percent in the

• US Federal Reserve may delay QE taper on partial shutdown of govt.

• Indian Rupee appreciated around 1.8 percent in the last week

• MCX Copper falls 3.4 percent prior week due to Rupee appreciation.

Asian markets are trading lower today on the back of partial shutdown of

US government along with US President Barack Obama and Congress

failing to meet at consensus for the debt ceiling.

Indian HSBC Services PMI declined sharply to 44.6

from 47.6 level in August.

The US Dollar Index (DX) declined by 0.2 percent in the last

back of shutdown of US government over its debt ceiling issue. Further,

unfavorable economic data indicated a slow economic growth and may

prompt Federal Reserve to delay its tapering program which exerted

downside pressure on the currency.

Additionally, negotiations between the US President Barack Obama and

Congress didn’t pay off as the President said he won’t negotiate on

budget until the reopening of government and raise the borrowing limit

without any conditions acted as a negative factor.

weekly low of 79.72 and closed at 80.22 on Friday.

On a weekly basis, Indian Rupee appreciated around 1.

currency appreciated on the back of rising foreign funds of around $2

billion in Indian equities in September which was the first month for

inflows of foreign funds after May. Further, expectation that shutdown of

US government will delay any tapering from the US Federal Reserve

supported an upside in currency. Even statement from country’s Finance

Minister that growth outlook of the economy will improve in future

coupled with rise in manufacturing data led to gains in the currency.

Additionally, rise in the domestic market sentiments along with weakness

in the DX acted as a positive factor. The Indian Rupee touched a weekly

high of 61.25 and closed at 61.43 on Friday.

For the month of October 2013, FII outflows totaled at Rs.555.2 crores

($29.44 million) as on 4th

October 2013. Year to date basis, net capital

inflows stood at Rs.73782.50 crores ($13675 million) till 4

2013.



India’s Services PMI fell to four year low in the month of September.

Spot Gold prices slipped around 2 percent in the previous week.

taper on partial shutdown of govt.

Indian Rupee appreciated around 1.8 percent in the last week.

MCX Copper falls 3.4 percent prior week due to Rupee appreciation.

Asian markets are trading lower today on the back of partial shutdown of

g with US President Barack Obama and Congress

Indian HSBC Services PMI declined sharply to 44.6-mark in September

The US Dollar Index (DX) declined by 0.2 percent in the last week on the

back of shutdown of US government over its debt ceiling issue. Further,

unfavorable economic data indicated a slow economic growth and may

prompt Federal Reserve to delay its tapering program which exerted

ditionally, negotiations between the US President Barack Obama and

Congress didn’t pay off as the President said he won’t negotiate on

budget until the reopening of government and raise the borrowing limit

without any conditions acted as a negative factor. The DX touched a

On a weekly basis, Indian Rupee appreciated around 1.8 percent. The

currency appreciated on the back of rising foreign funds of around $2

billion in Indian equities in September which was the first month for

inflows of foreign funds after May. Further, expectation that shutdown of

tapering from the US Federal Reserve

supported an upside in currency. Even statement from country’s Finance

Minister that growth outlook of the economy will improve in future

coupled with rise in manufacturing data led to gains in the currency.

lly, rise in the domestic market sentiments along with weakness

in the DX acted as a positive factor. The Indian Rupee touched a weekly

For the month of October 2013, FII outflows totaled at Rs.555.2 crores

October 2013. Year to date basis, net capital

inflows stood at Rs.73782.50 crores ($13675 million) till 4th

October

Market Highlights (% change)

Last Prev day

INR/$

(Spot)

61.43 1.6

$/Euro

(Spot)

1.3557 -0.1

Dollar

Index

80.22 0.3

NIFTY 5909.7 2.2

SENSEX 19916.0 0.1

DJIA 15072.6 0.5

S&P 1690.5 0.7

The Euro appreciated by 0.3 percent yesterday in the last week

taking cues from weakness in the DX. Further, favorable retail

sales and unchanged unemployment rate of the Euro Zone

supported an upside in the currency. Additionally, Portuguese

government increased the growth forecast for 2014 to 0.8

percent from 0.6 percent also acted as a positive factor. The

government has now projected that economy will shrink by 1.8

percent in current year from earlier estimates of 2.3 percent.

However, weak global market sentiments coupled with decline

in manufacturing data from the region capped sharp gains in

the currency. The Euro touched a weekly high of 1.3645 and

closed at 1.3557 on Friday.

German PPI remained unchanged in August.



change) as on October 4, 2013

Prev day w-o-w m-o-m y-o-y

1.6 1.7 8.4 -15.8

0.1 0.3 2.7 4.1

0.3 -0.2 -2.4 1.0

2.2 8.5 8.5 3.1

0.1 7.3 7.3 8.9

0.5 -1.2 0.1 11.0

0.7 2.3 2.3 15.7

Source: Reuters

The Euro appreciated by 0.3 percent yesterday in the last week

taking cues from weakness in the DX. Further, favorable retail

sales and unchanged unemployment rate of the Euro Zone

supported an upside in the currency. Additionally, Portuguese

creased the growth forecast for 2014 to 0.8

percent from 0.6 percent also acted as a positive factor. The

government has now projected that economy will shrink by 1.8

percent in current year from earlier estimates of 2.3 percent.

ket sentiments coupled with decline

in manufacturing data from the region capped sharp gains in

the currency. The Euro touched a weekly high of 1.3645 and

German PPI remained unchanged in August.


Bullion

Gold

Spot gold prices declined around 2 percent last week on the back of

weak global market sentiments coupled with declining trend

Gold holdings.

SPDR gold holdings dropped by 0.2 percent to 899.99 tonnes which is

at lowest level since February 2009. Also, fears of

government as there were no signs of negotiations between the

Republicans and Congress acted as a negative factor. Weakness in the

DX cushioned further fall in prices. The yellow metal touched a weekly

high of $1335.71/oz and closed at $1310.79/oz in yesterday’s trading

session.

In the Indian markets, gold prices declined by 4 percent over the week

due to Rupee appreciation and closed at a weekly low of Rs.29,493/10

gms on Friday.

Silver

Taking cues from downside in gold and base metals group along with

weak global market sentiments, Spot silver prices slipped around 0.1

percent last week.

However, sharp downside in the prices was prevented on

weakness in the DX. The white metal touched a weekly low of

$21.11/oz and closed at $21.70/oz in yesterday’s trade.

On the MCX Silver prices fell 3 percent on account of Rupee

depreciation touching a weekly low of Rs.47902/kg and closed at

Rs.48,202/kg.

Outlook

In today’s trade, precious metals are expected to trade on a mixed

note on the back of weak global market sentiments. Further, partial

shutdown of US government had led to increased concerns over the

default of the government which will add downside pressure on prices.

Further, decline in SPDR gold holdings act as a negative factor.

However, sharp downside in prices will be prevented as a result of

weakness in the DX. In the Indian markets, depreciation in the Rupee

will cushion sharp downside in prices.

Technical Outlook valid for October 7

Unit Support

Spot Gold $/oz 1303/1297

MCX Gold Dec’13 Rs/10 gms 28900/28750

Spot Silver $/oz 21.50/21.20

MCX Silver Dec’13 Rs/kg 47700/47300



Market Highlights - Gold (% change)

Gold Unit Last

Gold (Spot) $/oz 1310.8

Gold (Spot -

Mumbai)

Rs/10

gms

29700.0

Gold

(LBMA-PM

Fix)

$/oz 1309.8

Comex Gold

(Dec’13)

$/oz 1309.7

MCX Gold

(Dec’13)

Rs /10

gms

29493.0

Market Highlights - Silver (% change)

Silver Unit Last Prev day

Silver

(Spot)

$/oz 21.7

Silver

(Spot -

Mumbai)

Rs/1 kg 48990.0

Silver

(LBMA)

$/oz 2165.0

Comex

Silver

(Dec’13)

$/ oz 21.7

MCX Silver

(Dec’13) Rs / kg 48197.0

Technical Chart – Spot Gold

Spot gold prices declined around 2 percent last week on the back of

declining trend in SPDR

by 0.2 percent to 899.99 tonnes which is

fears of default in US

as there were no signs of negotiations between the

Republicans and Congress acted as a negative factor. Weakness in the

prices. The yellow metal touched a weekly

high of $1335.71/oz and closed at $1310.79/oz in yesterday’s trading

In the Indian markets, gold prices declined by 4 percent over the week

w of Rs.29,493/10

Taking cues from downside in gold and base metals group along with

weak global market sentiments, Spot silver prices slipped around 0.1

However, sharp downside in the prices was prevented on account of

weakness in the DX. The white metal touched a weekly low of

$21.11/oz and closed at $21.70/oz in yesterday’s trade.

On the MCX Silver prices fell 3 percent on account of Rupee

depreciation touching a weekly low of Rs.47902/kg and closed at

In today’s trade, precious metals are expected to trade on a mixed

note on the back of weak global market sentiments. Further, partial

concerns over the

default of the government which will add downside pressure on prices.

Further, decline in SPDR gold holdings act as a negative factor.

However, sharp downside in prices will be prevented as a result of

preciation in the Rupee

October 7, 2013

Resistance

1317/1324

29200/29350

21.80/22.10

48600/49050



(% change) as on October 4, 2013

Prev.

day WoW MoM YoY

1310.8 -0.3 -1.9 -5.8 -26.7

0.7 -2.0 -8.3 -0.3

0.3 -2.3 -5.8 -26.9

-0.6 -1.3 -4.0 -27.0

29493.0 -2.4 -4.0 -9.5 -4.0

Source: Reuters


Prev day WoW MoM YoY

0.0 -0.1 -7.4 -37.9

-0.6 -2.6 -13.0 -10.4

2.4 0.2 -8.7 -38.1

-0.5 -0.2 -8.2 -38.0

-0.9 -3.0 -9.3 -22.4

Source: Reuters

Source: Telequote

International Commodities Energy

Crude Oil

Nymex crude prices gained around 0.9 percent last week on the back of

weakness in the DX coupled with expectations of completion of the

Keystone pipeline by the end of October that will increase the refining

capacity and eventually lead to decline in inventories.

However, tensions regarding the US shutdown still weigh down on

prices as the US is the world’s biggest oil consumer and

reduction in demand for the fuel. Crude oil prices touched a weekly high

of $104.1/bbl and closed at $103.84/bbl on Friday.

The MCX near-month crude oil contract traded on a negative note in the

last week by 2.3 percent due to Rupee appreciation and closed at

Rs.6386/bbl in the last trading session.

Natural Gas

On a weekly basis, Nymex natural gas prices declined 2.3 percent on the

back of more than expected rise in US natural gas inventories. Further,

expectations of decline in demand after partial shutdown of US

government added downside pressure on prices.

However, sharp downside in prices was restricted as a result of

weakness in the DX. Gas prices touched a weekly low of $3.499/mmbtu

and closed at $3.506/mmbtu on Friday.

On the domestic front, prices slipped around 5 percent due to Rupee

appreciation and closed at a weekly low of Rs.216.10/mmbtu on Friday.

Outlook

From the intra-day perspective, we expect crude oil prices to trade

lower on the back of weak global market sentiments as a result of

increasing worries over the shutdown in US government can lead to

default in the government. Further, restart of production in Gulf of

Mexico after ease in Tropical Storm Karen will add downside pressure

on prices. Crude production in the Gulf of Mexico was shut

6th

October due to worries over the Tropical Storm and

around 62 percent of the global crude oil production

downside in prices will be prevented on account of weakness in the DX.

In the Indian markets, depreciation in the Rupee will

downside in oil prices.


Unit Support

NYMEX Crude Oil $/bbl 102.50/101.70

MCX Crude Oct’13 Rs/bbl 6340/6290



Market Highlights - Crude Oil (% change)

Crude Oil Unit Last

Brent

(Spot)

$/bbl 110.9

Nymex

Crude (Nov

’13)

$/bbl 103.8

ICE Brent

Crude

(Nov’13)

$/bbl 109.5

MCX Crude

(Oct ’13) Rs/bbl 6386.0

Market Highlights - Natural Gas

Natural

Gas (NG) Unit Last Prev. day

Nymex

NG

$/mmbtu 3.506

MCX NG

(Oct

’13)**

Rs/

mmbtu

216.1

Technical Chart – NYMEX Crude Oil

Technical Chart – NYMEX Natural Gas

Nymex crude prices gained around 0.9 percent last week on the back of

weakness in the DX coupled with expectations of completion of the

increase the refining

.

However, tensions regarding the US shutdown still weigh down on oil

il consumer and may lead to

. Crude oil prices touched a weekly high

month crude oil contract traded on a negative note in the

last week by 2.3 percent due to Rupee appreciation and closed at

Nymex natural gas prices declined 2.3 percent on the

back of more than expected rise in US natural gas inventories. Further,

expectations of decline in demand after partial shutdown of US

ide in prices was restricted as a result of

weakness in the DX. Gas prices touched a weekly low of $3.499/mmbtu

On the domestic front, prices slipped around 5 percent due to Rupee

ow of Rs.216.10/mmbtu on Friday.

day perspective, we expect crude oil prices to trade

lower on the back of weak global market sentiments as a result of

increasing worries over the shutdown in US government can lead to

restart of production in Gulf of

will add downside pressure

Crude production in the Gulf of Mexico was shut down since

October due to worries over the Tropical Storm and it contributes

production. However, sharp

downside in prices will be prevented on account of weakness in the DX.

preciation in the Rupee will cushion sharp

October 7, 2013

Support Resistance

102.50/101.70 104.20/105.00

6340/6290 6440/6490




Prev.

day WoW MoM YoY

-0.1 -0.3 -5.7 -0.1

0.5 0.9 -5.2 13.2

0.2 0.8 -4.7 -2.8

-1.0 -2.3 -10.4 35.3

Source: Reuters


Prev. day WoW MoM YoY

-0.2 -2.31 -4.57 2.82

-1.7 -5.01 -11.47 21.95

Source: Reuters

Oil

Source: Telequote

Natural Gas

Source: Telequote


Base Metals

Base metals pack on the LME traded lower this week as

developments regarding the US Debt ceiling debate between the US

President Barack Obama and Congress leaders leading to concerns

regarding the default in the US government.

Decline in LME inventories over the week coupled with weakness in

the DX cushioned sharp downside in prices of base metals. Also

positive economic outlook regarding the Euro Zone

downside in prices.

In the Indian markets, prices declined sharply owing to Rupee

appreciation.

Copper

LME Copper prices declined by 0.6 percent last week on the back of

ongoing tensions in the US, fuelling concerns regarding the

government default, thereby hurting demand in the world’s second

largest consumer of the metal.

Decline in inventories by around 2.3 percent to 525,925 tonnes

during the week coupled with weakness in the DX cushioned sharp

fall in prices. The red metal touched a weekly low of $7190/tonne

and closed at $7251.5/tonne in the last trading session.

The near month Copper contract on the MCX declined by 3.4 percent

last week due to Rupee appreciation and closed at a weekly low of

Rs.454.2/kg on Friday.

Outlook

In today’s session, we expect base metal prices to trade on a negative

note on the back of weak global market sentiments.

expectations of default in US government after partial shutdown will

exert downside pressure on prices. However, sharp upside in prices

will be cushioned on account of weakness in the DX.

expectations of favorable investor’s confidence and Gross Domestic

Product (GDP) data from Euro Zone will restrict sharp downside in

prices.

In the Indian markets, appreciation in the Rupee will add downside

pressure in prices.


Unit Support

MCX Copper Nov’13 Rs /kg 451/447

MCX Zinc Oct’13 Rs /kg 113.00/112.00

MCX Lead Oct ’13 Rs /kg 125.00/124.00

MCX Aluminum Oct’13 Rs /kg 110.80/109.80

MCX Nickel Oct ’13 Rs /kg 850/844



Base metals pack on the LME traded lower this week as no positive

developments regarding the US Debt ceiling debate between the US

President Barack Obama and Congress leaders leading to concerns

Decline in LME inventories over the week coupled with weakness in

the DX cushioned sharp downside in prices of base metals. Also

positive economic outlook regarding the Euro Zone restricted sharp

sharply owing to Rupee

LME Copper prices declined by 0.6 percent last week on the back of

ongoing tensions in the US, fuelling concerns regarding the

overnment default, thereby hurting demand in the world’s second

Decline in inventories by around 2.3 percent to 525,925 tonnes

coupled with weakness in the DX cushioned sharp

fall in prices. The red metal touched a weekly low of $7190/tonne

and closed at $7251.5/tonne in the last trading session.

The near month Copper contract on the MCX declined by 3.4 percent

Rupee appreciation and closed at a weekly low of

In today’s session, we expect base metal prices to trade on a negative

note on the back of weak global market sentiments. Further,

ter partial shutdown will

exert downside pressure on prices. However, sharp upside in prices

will be cushioned on account of weakness in the DX. Additionally,

confidence and Gross Domestic

Product (GDP) data from Euro Zone will restrict sharp downside in

In the Indian markets, appreciation in the Rupee will add downside

ctober 7, 2013

Resistance

458/461

115.50/116.50

127.30/129.00

113.00/114.00

865/872

Market Highlights - Base Metals (% change)

Unit Last

LME Copper (3

month)

$/tonne 7251.5

MCX Copper

(Nov’13)

Rs/kg 454.2

LME Aluminum

(3 month)

$/tonne 1841.8

MCX Aluminum

(Oct’13)

Rs /kg 111.9

LME Nickel

(3 month)

$/tonne 13949.0

MCX Nickel

(Oct’13)

Rs /kg 859.5

LME Lead

(3 month)

$/tonne 2054.3

MCX Lead

(Oct’13)

Rs /kg 126.0

LME Zinc

(3 month)

$/tonne 1872.0

MCX Zinc

(Oct’13)

Rs /kg 114.3

LME Inventories

Unit 4th

October

Copper tonnes 525,925

Aluminum tonnes 5,360,475

Nickel tonnes 227,562

Zinc tonnes 1,013,025

Lead tonnes 237,800

Technical Chart – LME Copper




Prev. day WoW MoM YoY

-0.5 -0.6 1.6 -12.8

0.0 -3.4 -6.1 4.8

-0.1 0.1 2.8 -13.1

-0.1 -1.2 -4.6 3.1

1.1 -0.1 2.0 -25.4

1.8 -2.1 -5.6 -11.0

-1.5 -2.3 -3.8 -10.3

-1.1 -4.0 -11.0 7.2

-1.0 -2.0 -0.1 -9.8

-0.9 -3.7 -7.4 7.7

Source: Reuters

3rd

October

Actual

Change

(%)

Change

529,950 -4,025 -0.8

5,366,125 -5,650 -0.1

226,998 564 0.2

1,014,675 -1,650 -0.2

238,300 -500 -0.2

Source: Reuters

Source: Telequote


Important Events for Today

Indicator Country

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Time (IST) Actual Forecast Previous

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Previous Impact

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daily metals and energy report october 7 2013

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