metals & energy aug. 10, 2016 · forecasts for less hot weather in the days ahead dampened...

Metals & Energy Aug. 10, 2016

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Market synopsis Precious Metals

Base metals

High Low Close %Chg OI


MCX

MCX (Rs/kg)

Gold(Oct) (Rs/10 gm) 31,297 31,062 31,273 0.3 13,025

Alum.(Aug) 110.0 109.3 109.6 (0.1) 2,780

Silver(Sept) (Rs/kg) 46,450 45,911 46,372 0.2 12,140

Copper(Aug) 320.4 317.6 318.2 (0.8) 29,290

Gold Mini (Rs/10 gm) 31,165 30,891 31,133 0.4 11,634

Lead(Aug) 121.0 119.4 120.8 0.7 3,559

Silver Mini (Rs/kg) 46,440 45,924 46,373 0.2 11,997

Nickel(Aug) 723.4 713.5 721.2 0.0 13,272

COMEX (US$/oz)

Zinc(Aug) 152.6 151.2 152.0 (0.4) 14,026

Gold(Oct) 1,339.4 1,328.5 1,339.0 0.4 580,039

COMEX (US$/Ib)

Silver(Sept) 19.90 19.61 19.85 0.2 211,278

Copper 216.5 214.0 215.0 (0.7) 188,809

Ratios

LME Inventory levels

in US$ in US$ Ratio

Base Metals Close Prev close %Chg

Gold v/s Oil 1,339.0 42.8 31.3

Aluminum 2,256,400 2,259,325 (0.1)

Gold v/s Silver 1,339.0 19.85 67.5

Copper 205,350 205,025 0.2

Lead 188,100 188,175 (0.0)

Energy

Nickel 371,154 369,228 0.5


Zinc 429,275 429,425 (0.0)

MCX

Cr. oil(Aug) (Rs/bbl) 2,914 2,848 2,862 (1.0) 24,568

Currency

Nat.gas(Aig) (Rs/mmbtu) 184.2 175.8 176.1 (4.5) 11,750

Close Prev close %Chg

NYMEX

Rs/US$ 66.8425 66.8425 0.0

Cr. oil(Sept) (US$/bbl) 43.5 42.5 42.8 (0.6) 1,842,601

US$/EUR 1.1117 1.1088 0.3

Brent Cr. oil (US$/bbl) 45.8 44.8 45.0 (0.9) 2,197,342

US$/GBP 1.3003 1.3040 (0.3)

Nat.gas(Sept) (US$/mmbtu) 2.74 2.61 2.62 (4.8) 1,056,733

JPY/US$ 101.8800 102.4500 (0.6)

Pivot Levels MCX levels

Commodity R3 R2 R1 Pivot S1 S2 S3

Gold 31,457 31,391 31,328 31,273 31,218 31,156 31,089

Silver 46,795 46,642 46,499 46,372 46,245 46,103 45,949

Aluminum 110.15 109.95 109.76 109.60 109.44 109.25 109.05

Copper 320.35 319.55 318.81 318.15 317.49 316.75 315.95

Lead 122.10 121.63 121.19 120.80 120.41 119.98 119.50

Nickel 729.0 726.2 723.5 721.2 718.9 716.3 713.4

Zinc 153.10 152.70 152.33 152.00 151.67 151.30 150.90

Crude oil 2,914 2,895 2,878 2,862 2,846 2,829 2,810

Nat. Gas 182.69 180.30 178.07 176.10 174.13 171.90 169.51

International levels

Commodity R3 R2 R1 Pivot S1 S2 S3

Gold 1,347.56 1,344.45 1,341.56 1,339.00 1,336.44 1,333.55 1,330.44

Silver 20.08 20.00 19.92 19.85 19.78 19.70 19.62

COMEX Copper 216.963 216.250 215.588 215.000 214.413 213.750 213.038

Crude oil 43.59 43.30 43.02 42.77 42.52 42.25 41.95

Br. Crude oil 45.77 45.49 45.22 44.98 44.74 44.48 44.19

Nat. Gas 2.724 2.685 2.648 2.615 2.582 2.546 2.506

LME Aluminum 1,651.42 1,648.00 1,644.82 1,642.00 1,639.18 1,636.00 1,632.58

LME Copper 4,817.47 4,803.50 4,790.52 4,779.00 4,767.49 4,754.50 4,740.54

LME Nickel 10,893.83 10,852.50 10,814.08 10,780.00 10,745.93 10,707.50 10,666.18

LME Lead 1,826.09 1,818.25 1,810.96 1,804.50 1,798.04 1,790.75 1,782.91

LME Zinc 2,292.06 2,285.50 2,279.41 2,274.00 2,268.60 2,262.50 2,255.95

A pivot is a level at which the market direction can change for the day.

Pivot levels are only broad indicators and not necessarily our view on the commodity.



Market news and Technical forecast

Gold prices added to gains in early trades today,

holding gains from the previous session as the

dollar fell, with investors evaluating the

likelihood of a Federal Reserve rate hike after a

weak U.S. productivity report.

Gold prices traded steadily in a quiet trade, as

equities worldwide hit their highest level in

almost a year dampening the precious metal's

appeal as a safe-haven asset, while investors

engaged in a search for higher dividends amid a

continuing rout in global bond yields.

The dollar weakened against major currencies, as

investors evaluated the likelihood that the U.S.

Federal Reserve will raise interest rates this year,

with no major new economic indicators due until

Friday's retail sales report.

The greenback had gained after last Friday's jobs

report for July showed better-than-expected

employment gains, raising expectations that a

further rate increase this year is likely.

The holdings of SPDR Gold trust declined to

972.62 tons, as on August 9, while that of ishares

Silver trust increased to 10,941.12 tons, as on

August 8.

Technical outlook:

Gold’s trend looks sideways to up till support at

31200 holds, while on the upside prices may test

31400-31450.

Silver’s trend looks sideways till prices are

trading above support at 46280, while on the

upside prices may test 46700-46950.

Precious metals




Oil prices fell by about 1%, extending losses in

post-settlement trade after preliminary data

showed a surprise U.S. crude stockpile build last

week, heightening worries about a global

petroleum glut.

The market also lost the previous day's upward

momentum as speculation fizzled that the

Organization of the Petroleum Exporting

Countries and other oil producers would embark

on another round of talks on price cooperation

after their failed effort in April.

Trade group American Petroleum Institute (API)

reported U.S. crude stockpiles rose by 2.1mn

barrels during the week to Aug. 5.

In separate data issued on Tuesday, EIA said it

expected a smaller decline of 700,000 barrels per

day (bpd) in U.S. crude oil production in 2016

than the 820,000-bpd drop it forecast a month

ago. It said an uptick in drilling will lead to more

output later this year.

Natural gas futures fell for the fourth session in a

row, touching a more than 1-week low as

forecasts for less hot weather in the days ahead

dampened demand expectations for the cooling

fuel.

Technical outlook:

Crude oil’s trend looks sideways to up till prices

are trading above 2848, while on the upside

prices may test 2900-2925.

Natural gas trend looks down till prices are

trading below 178-180.5, while on the downside

prices may test 173-170.

Energy complex




Copper fell to its lowest in 4-weeks, weighed

down by seasonally weak demand in top metals

consumer China and concern that Beijing may

not cut rates soon.

3-month copper on LME closed down 0.7% at

$4,779 per ton, having hit a low of $4,761, its

weakest since July 12.

LME nickel closed up 0.1% at $10,780 per ton. A

crackdown on nickel mines in Philippines has

lifted prices by more than 20% over the past 2-

months and could see further upside in prices.

Among other metals, LME aluminum closed

unchanged at $1,642 while zinc dipped 0.2% to

$2,274 and lead gained 0.8% to $1,804.50.

Technical outlook:

Copper’s intra-day trend looks sideways to down

with resistance at 320.5 with support at 317,

below which prices may test 314-311.

Nickel trend looks sideways with support at

717.5-714, while on the upside resistance holds

at 725.5 and next at 730.

Lead trend remains down till prices are trading

below 121-121.2, while on the downside prices

may test 119.5-118 levels.

Zinc’s trend remains sideways with support at


at 153.5-154.5.

Aluminum’s trend looks sideways with support at


at 110.1-111.5

Base metals



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Spreads and Arbitrage Calendar spreads

Global Indices

Commodity Near month 2nd month Close Prev close

Markets Close Prev close %Chg

Precious metals

Asia

Gold (Rs/10 gm) 31,273 31,565 292 294

Sensex 28,085.2 28,182.6 (0.3)

Silver (Rs/kg) 46,372 46,287 1,050 1,122

Nifty 8,678.3 8,678.3 0.0

Nikkie 16,765.0 16,650.6 0.7

Base metals

Hang Seng 22,465.6 22,494.8 (0.1)

Alum. (Rs/kg) 109.6 110.3 0.70 0.65

Shanghai 3,025.7 3,004.3 0.7

Copper (Rs/kg) 318.2 324.9 6.75 6.65

Straits Times 2,870.8 2,870.8 0.0

Lead (Rs/kg) 120.8 121.6 0.75 0.85

Nickel (Rs/kg) 721.2 726.9 5.70 5.70

America

Zinc (Rs/kg) 152.0 152.3 0.30 0.35

Dow Jones 18,533.1 18,529.3 0.0

Nasdaq 5,225.5 5,213.1 0.2

Energy

Cr. oil (Rs/bbl) 2,862 2,927 65 68

Europe

Nat.gas (Rs/mmbtu) 176.1 179.4 3.3 2.7

CAC 4,468.1 4,415.5 1.2

DAX 10,692.9 10,432.4 2.5

National-International price parity

FTSE 6,851.3 6,809.1 0.6

MCX COMEX Close* Prev close*

INR 66.84 66.8425

Arbitrage

Gold 31,273 1,339.00 105.96 128.83

Metals & Oil Close Prev close %Chg

Silver 46,372 19.85 (406.37) (394.57)

Lead - Zinc (31.20) (32.55) (4.1)

Copper 318.2 215.000 1.32 1.61

COMEX Gold - Silver 67.46 67.33 0.2

Crude oil 2,862 42.8 3.15 15.44

Brent - U.S. crude 2.21 2.37 (6.8)

*MCX premium/ (discount)

COMEX Gold Options (Near month i.e. Sept.)

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Economic calendar

Date

Country /

Currency Event IST Actual Cons. Previous

8-Aug JPY Trade Balance - BOP Basis (Yen) 5:20 ¥763.3b ¥773.3b ¥39.9b

CNY Foreign Direct Investment (y-o-y) CNY 6.30% 9.70%

CNY Imports (y-o-y) -12.5% -7.00% -8.40%

CNY Trade Balance $52.31b $47.30b $48.11b

CNY Imports (y-o-y) CNY -5.7% 1.10% -2.30%

CNY Trade Balance CNY 342.8b 311.85b 311.20b

JPY Eco Watchers Survey: Current 45.1 42.50 41.20

JPY Eco Watchers Survey: Outlook 47.1 42.00 41.50

CNY Exports (y-o-y) -4.4% -3.50% -4.80%

CNY Exports (y-o-y) CNY 2.9% 2.30% 1.30%

JPY Bankruptcies (y-o-y) 10:00 -9.25% -7.40%

EUR German IP n.s.a. and w.d.a. (y-o-y) 11:20 0.5% 0.50% -0.40%

EUR Euro-Zone Sentix Investor Confidence 14:00 4.2 3.00 1.70

9-Aug CNY Consumer Price Index (y-o-y) 7:00 1.8% 1.80% 1.90%

CNY Producer Price Index (y-o-y) 7:00 -1.7% -2.00% -2.60%

GBP GBP Visible Trade Balance (Pounds) 14:00 -£10075 -£9879

GBP GBP Total Trade Balance (Pounds) 14:00 -£2550 -£2263

GBP GBP Industrial Production (y-o-y) 14:00 1.60% 1.40%

GBP GBP Trade Balance Non EU (Pounds) 14:00 -£2563 -£2566

GBP GBP Manufacturing Production (y-o-y) 14:00 1.30% 1.70%

GBP GBP NIESR Gross Domestic Product Estimate 19:30 0.40% 0.60%

10-Aug CNY Aggregate Financing CNY 1024.0b 1630.0b

CNY New Yuan Loans CNY 900.0b 1380.0b

JPY Tertiary Industry Index (m-o-m) 10:00 0.30% -0.70%

USD MBA Mortgage Applications 16:30

USD DOE U.S. Crude Oil Inventories 20:00 1413k

USD DOE U.S. Gasoline Inventories 20:00 -3262k

USD DOE U.S. Distillate Inventory 20:00 1152k

USD DOE Cushing OK Crude Inventory 20:00 -1123k

USD Monthly Budget Statement 23:30 -$124b -$149.2b

11-Aug NZD Reserve Bank of New Zealand Rate Decision 2:30 2.00% 2.25%

USD Continuing Claims 18:00 2130k 2138k

USD Initial Jobless Claims 18:00 265k 269k

12-Aug CNY Industrial Production (y-o-y) 7:30 6.20% 6.20%

CNY Industrial Production YTD (y-o-y) 7:30 6.00% 6.00%

CNY Retail Sales (y-o-y) 7:30 10.50% 10.60%

EUR German Gross Domestic Product s.a. (q-o-q) 11:30 0.20% 0.70%

EUR German Gross Domestic Product w.d.a. (y-o-y) 11:30 1.40% 1.60%

EUR German Gross Domestic Product n.s.a. (y-o-y) 11:30 2.80% 1.30%

EUR German Consumer Price Index (MoM) 11:30 0.30% 0.30%

EUR German Consumer Price Index (y-o-y) 11:30 0.40% 0.40%

EUR Italian GDP s.a. and w.d.a. (y-o-y) 13:30 0.80% 1.00%

EUR Euro-Zone Gross Domestic Product s.a. (y-o-y) 14:30 1.60% 1.60%

EUR Euro-Zone Industrial Production w.d.a. (y-o-y) 14:30 0.40% 0.50%

EUR Euro-Zone Gross Domestic Product s.a. (q-o-q) 14:30 0.30% 0.30%

USD Advance Retail Sales 18:00 0.40% 0.60%

USD Retail Sales Less Autos 18:00 0.20% 0.70%

USD Retail Sales Control Group 18:00 0.30% 0.50%

USD U. of Mich. 1 Yr. Inflation 19:30

USD Business Inventories 19:30 0.10% 0.20%



USD U. of Michigan Confidence 19:30 91.50 90.00

USD Baker Hughes U.S. Rig Count 22:30

Commodity Research Team Pranav Mer Sr. Manager - Research

022-62257267/ 022-62257268/ 022-62257278

[email protected] Deepa Shakdwipee Sr. Research Analyst [email protected] Sivasubramaniam Palanisamy Sr. Technical Analyst [email protected] Sunil Darekar Advisor [email protected] Bharat Jha Advisor [email protected]

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metals & energy aug. 10, 2016 · forecasts for less hot weather in the days ahead dampened...

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