COMMODITY NEWS AND TRADING LEVELS FOR 3RD MAY 2012

Commodity Tips

COPPER (JUNE) – the Chinese inventories have been easing off late, world markets have been supported by the shrinking LME inventories, which are currently at their lowest level since November 2008. The red metal, which hit its three-week high last week, eased today as Spanish economy contracted 0.3% in the first quarter of 2012- the second straight quarter of economic decline and entered into a recession. Expected resistance and support level for today trade are as follows:

TREND BULLISH

SUPPORT 1: 440.55

SUPPORT 2: 436.35

RESISTANCE 1: 449.75

RESISTANCE 2: 455.85

CRUDE OIL (MAY) – International oil price politics have returned to the frontage, including obvious pressure from consuming governments for policy actions to dampen the oil market. Among the most prominent of those caught in the middle of this renewed flaring of oil price politics is of course Saudi Arabia. Expected resistance and support levels for the crude may contract with expiry date of 19 MAY 2012 are:

TREND BULLISH

SUPPORT 1: 5505

SUPPORT 2: 5415

RESISTANCE 1: 5695

RESISTANCE 2: 5785

GOLD (JUNE) – COMEX Gold remained in a thin range today after hitting two-week highs in the last session as a jump in the US dollar following Spanish economic fears and the euro zone's inflation data capped the upside for the metal. The commodity rose well above $1660 per ounce in the last session, adding to prior gains on follow up buying and ideas that global central bankers would continue to execute money printing operations and debase their currencies. The local MCX Gold futures for June delivery are quoting at Rs. 29161, up Rs. 52 per kg on the day. The counter had edged up towards Rs. 29200 in intraday moves but failed to break above the same. Resistance and support levels for the today’s session for Gold June contract which will expire on June 2012 are:

TREND BULLISH

SUPPORT 1: 29075

SUPPORT 2: 28965

RESISTANCE 1: 29295

RESISTANCE 2: 29385

SILVER (MAY) – Investors are losing their interest in gold and are putting their money in silver, latest data released by the London Bullion Market Association (LBMA) shows. LBMA represents the wholesale over-the-counter market for gold and silver in London. Silver’s Expected resistance and support levels for today trade are as follows:

TREND CONSOLIDATE

SUPPORT 1: 55205

SUPPORT 2: 55095

RESISTANCE 1: 55265

RESISTANCE 2: 55395

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Market Overview

We expect a slightly lower start today on account of sluggish global cues. US stocks recovered from session lows, but European indices slipped on downbeat data.

The Government appears to be in a conciliatory mood. Reports suggest it could settle the tax row with Vodafone by waiving penalty. This will be a positive development if indeed it happens. The next on the FII watch list is the GAAR proposal, which will be taken up by the parliament next week along with the Finance Bill.

Meanwhile, the renewed weakness in the rupee is eroding FII investments in shares and debt. FIIs turned net sellers in April after a strong first quarter mainly due to the controversy over GAAR provisions and Vodafone tax disputes. The sentiment towards Indian markets will improve if the two thorny tax issues are addressed amicably.

We expect a slightly lower start today on account of sluggish global cues. US stocks recovered from session lows, but European indices slipped on downbeat data. All eyes will be on the ECB policy meet later today. Asian markets are mostly in red.

Banks will be in focus after the RBI announced guidelines on implementation of Basel III capital rules. Sugar counters will also be in the spotlight after the Government removed the cap on exports.

Daily Commodity News Updates

Copper

Zincore Metals Inc. (TSX:ZNC) says that it has discovered high grade mineralization at its wholly owned Dolores copper porphyry project located in Peru.

Gold

Dia Bras Exploration Inc. (TSX-V:DIB) says that first quarter gold, silver, copper, lead and zinc production all reached record highs after a full first quarter of production.

Silver

Bullion traders in India are calculating that Silver prices could rocket to new historic highs by the end of 2012. Silver imports had surged to 4800 tonnes in 2012 and demand, though weak in the first quarter of 2012, is expected to pick up as higher prices attract investors.

Crude oil

High crude oil prices may soon be a thing of the past says Byron Wein- Vice Chairman of Blackstone Advisory Partners. Blackstone is the biggest private-equity firm in the world and has an estimated $190 billion in Assets Under Management (AUM).

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