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1 : Daily 23 November 2010 Walter de Wet, CFA* Focus: Gold physical demand support gold on dips Leon Westgate* James Zhang* Focus: Gold physical demand supports gold on dips We believe gold remains a buy on dips. Not only do financial market conditions support gold investment demand, but the physical gold market also remains supportive. We have seen strong physical selling and scrap gold coming to market during the first two weeks of November as the gold price pushed above $1,400. However, the latest decline in the gold price to below $1,350 last week has spurred renewed physical buying interest. The base metals continued their descent during Asian trade, coming under pressure form a combination of a stronger dollar, weaker Asian equity markets and heightened geopolitical tensions in the Koran peninsular. The euro continues to weaken and precious metals continue to see selling into rallies. Given our believe that monetary policy by the Fed, ECB and PBOC will drive commodity prices for now, our interest lies with the release of the Fed minutes from the meeting on 2-3 Nov later today. Focusing on supply of crude Nigerian oil production continues to be affected by attacks on its oil facilities providing marginal support. However, the main focus remains on the US where we expect oil inventories to continue its decline, mainly on the back of higher seasonal demand and an increase in the discounted US benchmark prices. Commodity price data (22 November 2010) Base metals LME 3-month Open Close High Low Daily change Change (%) Cash Settle Change in cash settle Cash 3m Aluminium 2,290 2,289 2,296 2, % 2, Copper 8,379 8,290 8,329 8, % 8, Lead 2,245 2,255 2,260 2, % 2, Nickel 21,724 21,600 21,648 21, % 21, Tin 24,500 24,350 24,390 24, % 25, Zinc 2,151 2,140 2,170 2, % 2, Open Close High Low day/day Change (%) ICE Brent % NYMEX WTI % ICE Gasoil % API2 Q1' % EUA Dec % AM Fix PM Fix High bid Low offer Closing bid Change (d/d) EFPs Gold 1, , , , , /-0.5 Silver /0.0 Platinum 1, , , , , /3.0 Palladium /1.0 Sources: Standard Bank; LME; BBG Please refer to the disclaimer at the end of this document.

2 Focus: Gold physical demand supports gold on dips We believe gold remains a buy on dips. Not only do financial market conditions support gold investment demand, but the physical gold market also remains supportive. We have seen strong physical selling and scrap gold coming to market during the first two weeks of November as the gold price pushed above $1,400. However, the latest decline in the gold price to below $1,350 last week has spurred renewed physical buying interest. As a result our Standard Bank Gold Physical Flow Index (GPFI) has jumped into positive territory after lingering in negative territory earlier this month (an index value greater than zero indicates net buying in the physical gold market, while a value less than zero indicate net selling). Once again it appears the return of buying interest in the market is an indication that the physical gold market is slowly adjusting to the higher gold price and now sees a higher low in the gold price as a buying opportunity. Long-term this is a bullish sign. We continue to expect gold physical demand to prevail on dips. However, the demand on dips might not be as strong as it has been in October during the run up to Diwali in India. But on balance Indian demand should remain positive until at least mid-december on the back of wedding season. We also still have the festive seasons in the Western Hemisphere as well as Chinese New Year. In 2011 Chinese New Year is on 3 February. With regard to physical flows going forward: Our analyses find that Q2 is the second strongest quarter for jewellery demand behind Q4, after controlling for the gold price. But physical demand may fall away in February and March next year, before picking up in April. We note that physical demand is dominated by investment demand and we need to be cognizant of drivers of investment demand. We Standard Bank gold physical flow index Jan-10 Index Feb-10 Mar-10 Source: Standard Bank May-10 Flow index Jun-10 Aug-10 Sep-10 Oct-10 Gold spot Gold $ 1,460 believe the gold market is pricing the $600bn of QEII already. Our estimates are based on gold's close relationship since 2004 with global liquidity of which the Fed's balance sheet makes up an important component. This implies we cannot base an argument for greater investment demand and a higher gold price purely on a Fed QEII liquidity argument. We need to look for something else that will drive prices lower or higher. However, we do believe sovereign credit risk in Europe would provide investment demand for gold. Combined with the physical market which looks to provide support on dips for gold we believe gold in euro-terms should outperform gold in dollar-terms for the time being. By Walter de Wet 1,295 1, Base metals The base metals continued their descent during Asian trade, coming under pressure form a combination of a stronger dollar, weaker Asian equity markets and heightened geopolitical tensions in the Koran peninsular. Ongoing concerns over Chinese tightening measures, and the sovereign debt situation in Ireland and Southern Europe also continue to weigh on sentiment. With the Thanksgiving holiday also fast approaching, the market seems to be in risk-off mode, with the question perhaps one of whether the market will return en-masse next week or not? As such, the metals will likely continue to trade sideways over the coming days, with the dollar remaining a key short term driver. Geopolitical tensions in the Korean peninsular have resurfaced, with North Korea shelling a nearby South Korean island overnight, killing and injuring South Korean military personnel. Quite why the latest act of aggression occurred remains to be seen, however the news sparked a sell-off in Asian equity markets and a small-scale flight to safety and the dollar. Interestingly, copper turnover has been very strong, with the dip below $8,100 this morning eliciting strong buying interest. The nearby spreads also remain tight with the Cash-3 month spread heard at a backwardation of $33/35 compared to a valuation of back. Dec-Jan and Dec-3 month have tightened up in particular, however the farther forwards, Dec-11 and beyond, are trading more or less around valuation. Copper inventories remain steady, with the backwardation having little impact in terms of flushing out copper metal. On-warrant stocks fell by 1,525 mt this morning, due to fresh cancellations in Busan and Hamburg, offsetting yesterday s 1,425 mt increase. By Leon Westgate 2

3 The euro continues to weaken and precious metals continue to see selling into rallies. Given our believe that monetary policy by the Fed, ECB and PBOC will drive commodity prices for now, our interest lies with the release of the Fed minutes from the meeting on 2-3 Nov later today. This will be scrutinized for indication of how close the Fed came to providing less or more QE to the market and by extension, what the probability is for further QE. Our view on the precious metals market remains unchanged from yesterday. Given that further sovereign credit problems in Europe at this stage are a key theme, we believe gold in euro-terms may outperform gold in dollar-terms. Gold continues to trade around the $1,350 level. In the physical market buying on dips prevail. We expect this trend to continue into January (refer to Focus section). Gold support is at $1,340 and $1,330. Gold resistance is at $1,365 and $1,375. Despite selling in palladium this morning, pushing the metal towards $660, we still believe demand remains strong and the metal should push higher towards $780 in Q1:2011. Palladium support is at $657 and $650. Resistance is at $692 and $720. Fundamentally, based on cost-0f-production analysis we see good value for platinum below $1,600. As a result we expect buying interest to remain strong as we head towards this level. Platinum support is at $1,630 and $1,610. Resistance is at $1,675. By Walter de Wet The market appeared to breathe a sign of relief early yesterday after the news over the weekend that Ireland would be bailed out. However, the concerns over the details and implication of the bail-out took over before mid-day. In addition, monetary policy tightening in China is still looming large on the energy market. Net for the day, front month WTI and Brent was broadly flat as WTI moved up by 23c/bbl while Brent lost 38c/bbl. Volume remain relatively low given the short trading week in the US. Cracks and margins weakened slightly yesterday in general, so did physical differentials and time spread. This we believe is partly due to year-end de-stocking we will start to see over the next few weeks. Focusing on supply of crude Nigerian oil production continues to be affected by attacks on its oil facilities providing marginal support. However, the main focus remains on the US where we expect oil inventories to continue its decline, mainly on the back of higher seasonal demand and an increase in the discounted US benchmark prices. However, the gasoline arbitrage from Europe to the US has been open for the past two weeks which should see gasoline shifting to the US. ON top of this increased refining throughput in China to boost diesel production (following the recent diesel-shortages in China) is set to increase gasoline supply as well. Overall, we believe the recent counter-seasonal strength in gasoline cracks is likely to be short-lived. For the rest of the week, we continue to see the development in the financial market to overshadow the oil market. Sideway movement is likely for the rest week, bar significant news on Chinese rate increase or the Euro-zone debt situation. For the rest of year, we expect oil market to stay anchored by the weak but slowly-improving supply/demand fundamentals. Coal market continued its recent steady upward trend yesterday. The news that adverse weather at Hay Point Port in Australia, the world s largest export harbour for coal, is likely to push the market higher, besides seasonal demand increase in the North Hemisphere. By James Zhang 3

4 Base metals Daily LME stock movement (mt) Metal Today Yesterday In Out One day change YTD change (mt) Contract turnover Aluminium 4,298,025 4,302, ,650-4, , , ,022 Copper 359, ,825 1,400 2, ,325 31, ,141 Lead 203, , ,375 8, ,735 Nickel 130, , ,996 4, ,856 Tin 14,295 14, , ,078 Zinc 633, , ,825 35, ,210 Shanghai 3-month forward prices COMEX active month future prices ZAR metal prices (22 November 2010) Aluminium Copper Lead Nickel Tin Zinc ZAR/USD fix Cash 15,834 58,746 15, , ,123 14, month 16,215 58,726 15, , ,495 15, futures pricing Price Change Price Change Price Change Price Change Price Change 1-month forward 2-month forward 3-month forward 6-month forward 1-year forward Sing Gasoil ($/bbbl) Gasoil 0.1% Rdam ($/mt) NWE CIF jet ($/mt) Singapore Kero ($/bbl) % Rdam barges ($/mt) % Fuel Oil FOB ($/mt) Sing FO 380 Cargo ($/mt) Sing FO180 Cargo ($/mt) Thermal coal Q1-11 Q2-11 Q3-11 Cal 11 Cal 12 API2 (CIF ARA) API4 (FOB RBCT) Forwards (%) 1-month 2-month 3-month 6-month 12-month Gold Silver USD Libor Technical Indicators 30-day RSI 10-day MA 20-day MA 100-day MA 200-day MA Support Resistance Gold , , , , , , Silver Platinum , , , , , , Palladium Active Month Future COMEX GLD COMEX SLV NYMEX PAL NYMEX PLAT DGCX GLD TOCOM GLD CBOT GLD Dec'10 Dec 10 Jan'11 Jan'11 Dec'10 Oct'11 Dec'10 Settlement 1, , , , , Open Interest 627, ,778 24,737 34,680 1, ,031 2,477 Change in Open Interest 2,327-2, ,123 8 Date: 22 November 2010 Sources: Standard Bank; LME; Bloomberg Cancelled warrants (mt) Cancelled warrants (%) Metal Open Last 1d Change Open Close Change Change (%) Aluminium 16,350 16, Ali Dec' Copper 62,600 61,930-1,630 Cu Dec' % Zinc 17,605 17,

5 Disclaimer Certification The analyst(s) who prepared this research report (denoted by an asterisk*) hereby certifies(y) that: (i) all of the views and opinions expressed in this research report accurately reflect the research analyst's(s') personal views about the subject investment(s) and issuer(s) and (ii) no part of the analyst s(s ) compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed by the analyst(s) in this research report. Conflict of Interest It is the policy of The Standard Bank Group Limited and its worldwide affiliates and subsidiaries (together the Standard Bank Group ) that research analysts may not be involved in activities in a way that suggests that he or she is representing the interests of any member of the Standard Bank Group or its clients if this is reasonably likely to appear to be inconsistent with providing independent investment research. In addition research analysts reporting lines are structured so as to avoid any conflict of interests. For example, research analysts cannot be subject to the supervision or control of anyone in the Standard Bank Group s investment banking or sales and trading departments. However, such sales and trading departments may trade, as principal, on the basis of the research analyst s published research. Therefore, the proprietary interests of those sales and trading departments may conflict with your interests. Please note that one or more of the analysts that prepared this report sit on a sales and trading desk of the Standard Bank Group. Legal Entities: To U. S. Residents Standard New York Securities, Inc. is registered with the Securities and Exchange Commission as a broker-dealer and is also a member of the FINRA and SIPC. Standard Americas, Inc is registered as a commodity trading advisor and a commodity pool operator with the CFTC and is also a member of the NFA. Both are affiliates of Standard Bank Plc and Standard Bank of South Africa. Standard New York Securities, Inc is responsible for the dissemination of this research report in the United States. Any recipient of this research in the United States wishing to effect a transaction in any security mentioned herein should do so by contacting Standard New York Securities, Inc. To South African Residents The Standard Bank of South Africa Limited (Reg.No.1962/000738/06) is regulated by the South African Reserve Bank and is an Authorised Financial Services Provider. To U.K. Residents Standard Bank Plc is authorised and regulated by the Financial Services Authority (register number ) and is an affiliate of Standard Bank of South Africa. The information contained herein does not apply to, and should not be relied upon by, retail customers. General This research report is based on information from sources that Standard Bank Group believes to be reliable. Whilst every care has been taken in preparing this document, no research analyst or member of the Standard Bank Group gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy or completeness of the information set out in this document (except with respect to any disclosures relative to members of the Standard Bank Group and the research analyst s involvement with any issuer referred to above). All views, opinions and estimates contained in this document may be changed after publication at any time without notice. Past performance is not indicative of future results. The investments and strategies discussed here may not be suitable for all investors or any particular class of investors; if you have any doubts you should consult your investment advisor. The investments discussed may fluctuate in price or value. Changes in rates of exchange may have an adverse effect on the value of investments. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Members of Standard Bank Group may act as placement agent, advisor or lender, make a market in, or may have been a manager or a co-manager of, the most recent public offering in respect of any investments or issuers referenced in this report. Members of the Standard Bank Group and/or their respective directors and employees may own the investments of any of the issuers discussed herein and may sell them to or buy them from customers on a principal basis. This report is intended solely for clients and prospective clients of members of the Standard Bank Group and is not intended for, and may not be relied on by, retail customers or persons to whom this report may not be provided by law. This report is for information purposes only and may not be reproduced or distributed to any other person without the prior consent of a member of the Standard Bank Group. Unauthorised use or disclosure of this document is strictly prohibited. By accepting this document, you agree to be bound by the foregoing limitations. Copyright 2010 Standard Bank Group. All rights reserved. 5

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