Copyright Aditya Birla Nuvo Limited 2008 Aditya Birla Money Monthly Commodities Insight (July 2013) Aditya Birla Money Limited

Copyright Aditya Birla Nuvo Limited 2008 S NAPSHOT  Gold prices witnessed unprecedented fall, taking cues from the US Federal Reserve Chairman Ben Bernanke’s statement with regard to ending their monetary easing program. The US Fed Chairman said that it will start tapering the central bank’s $85 billion-per-month bond-purchase plan later this year and that an unemployment rate of 7% could be the time when all the purchases are completed.  The monetary easing policy by major central banks was a key driver for gold rally in past decade.  Gold dropped by nearly 4% on MCX and by nearly 14% on Comex during the month of June following the Fed announcement. On quarterly basis gold witnessed 23% fall in international market.  CFTC data suggest that net speculative length(longs-shorts) has dropped sharply during June to MT, its lowest in five years.  Factors to watch- Economic optimism related to US economy - Negative for gold Rally in US dollar - Negative for gold US Fed further action over its monetary policy Monetary policy of other major banks - End to easing policy will be negative for gold Gold – Bears holds sway over the market…

Aditya Birla Money Limited Copyright Aditya Birla Nuvo Limited 2008 Gold Monthly Outlook F UNDAMENTAL -  Gold- To find pressure amidst rising economic optimism over US economy  Given the sharp fall in prices after the FOMC decision, we can expect the downtrend to continue in gold and further liquidation of speculative longs is likely possible.  ETFs Outflows, if continues at same pace will add to selling pressure. ETF holdings’ were MT (week ended 21 st June),down 18.8 on weekly basis. ETF’s- net sellers of gold for 19 consecutive weeks. Average weekly liquidation of gold was 28.1 MT  Any indication of continuation of monetary easing by central banks across globe or negative economic data from any of the major nation will be supportive. TECHNICAL -  Long-term trend, Medium-term and short term trend is down.  Key support at Comex is $1170 and at MCX is at Break below these prices likely to touch $1075 and at MCX at  Key resistance at Comex is $1325 & MCX at Gold Weekly Price Movement

Aditya Birla Money Limited Copyright Aditya Birla Nuvo Limited 2008 S NAPSHOT  Crude oil prices rose by 1% amidst geopolitical concerns and economic optimism related to US.  As per US government data released in May, U.S. stockpiles climbed to the highest in 82 years. The Data is bearish as indicates high supplies.  U.S. production is projected to climb 14 percent to 7.42 million barrels a day. The Energy Information Administration lowered its outlook for global oil consumption to million barrels a day from 90 million estimated last month.  Disappointing China’s HSBC PMI data weighed on crude oil prices. PMI fell to 48.3, indicating shrink in manufacturing amidst cash crunch.  Factors to watch- Weekly Inventory data- Rise will be bearish Rally in US dollar- Negative for crude US Fed further action over its monetary policy Economic data in China, US and EU. OPEC decision and outlook US Crude Oil Inventory is at 82 yrs high Crude Oil – To remain range bound..

Aditya Birla Money Limited Copyright Aditya Birla Nuvo Limited 2008 Crude Monthly Outlook F UNDAMENTAL -  To remain under pressure until China economy show signs of growth.  US Federal Reserve decision to end bond buying program will prove bearish  If inventories show no significant signs of drop, it will put pressure on prices  Positive US economic data especially for housing sector will be bullish.  Overall trend is likely to remain bearish amidst weak demand and high inventory levels. T ECHNICAL -  Short and medium term trend is likely to remain down.  Key support at Nymex is $92.50 and at MCX is at  Key resistance at Comex is $101 and at MCX is at 6000.

Aditya Birla Money Limited Copyright Aditya Birla Nuvo Limited 2008 S NAPSHOT  LME copper dropped nearly 7% while MCX Copper fell 3% on m-o-m basis in June.  Major reasons for sharp fall-  Slowdown in China as it misses GDP target of 7.8%.  US Federal Reserve indication to end monetary easing  Higher inventory level of copper at LME warehouses- Inventories are at 5 yr high ( MT on 24 th June)  Sluggish China economic data - China’s HSBC PMI fell to 48.3, indicating shrink in manufacturing amidst cash crunch.  Speculative shorts at Comex increased to highest in five years.  Factors to watch- Inventory Level- Rise will be bearish Rally in US dollar- Negative US Fed further action over its monetary policy Economic data in China, US and EU.- Positive data will be bullish LME inventory at multi year high level Copper– Trend remains flat..

Aditya Birla Money Limited Copyright Aditya Birla Nuvo Limited 2008 Copper Monthly Outlook F UNDAMENTAL –  To remain under pressure following higher inventory levels and weak China growth data.  Tightening credit conditions in China to weigh further  US Federal Reserve decision to end monetary easing will be bearish  China economic scenario, if continues to show slowdown will be bearish. China’s GDP forecast was reduced to 7.4%(2013), from 7.7% earlier.  Overall trend is likely to remain down amidst weak demand and ample supply T ECHNICAL -  Short and medium term trend is sideways to down.  Key support at LME is $6400 and at MCX is at 385.  Key resistance at LME is at $7150 and at MCX is at 422 and breach of this on weekly basis will take it to 432 on MCX and $7400 on LME.

Aditya Birla Money Limited Copyright Aditya Birla Nuvo Limited 2008 Thank You 6 0f 6 Deepa Shakdwipee Commodity Research