ZOID RESEARCH 19- MAY-2014 : LEAD

Excerpt from weekly report: As of Friday 3 month forward lead prices at LME is seen trading at $2100+ up by 2.00% from its previous close while the commodity is still down in the month of May down by 0.57%. Price rising at the LME and SHFE are basically due to rise in the physical prices during the week. We believe the same scenario may now continue in the short term thereby prices may surge so we suggest buying the metal from lower levels. Coming to inventory front, the global inventories at LME stood at 190950 tons while the same has declined from 193475 tons supporting the metal to trade higher. Lastly from the arbitrage front, the cash to forward spread stood at $44 which has increased from $22 indicating the short term demand for the commodity is higher. At the local front, price gains were limited due to Indian rupee. We believe the same scenario may continue in the next week too as we have a selling view in the USD/INR pair. Also, the market indicates the LME and MCX price performance could be diverged.

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