Oil And Gold Trade Higher Wednesday

Crude oil futures moved sharply higher during U.S. afternoon trade Wednesday, after a U.S. government report showed oil supplies fell less than expected last week. The U.S. EIA reported in its weekly report that U.S. crude oil inventories fell by a modest 0.1 million barrels in the week ended June 1, below expectations for a 0.5 million barrel decline. U.S. crude supplies rose by 2.2 million barrels in the preceding week. Total U.S. crude oil inventories stood at 384.6 million barrels as of last week, just below the highest level since 1990. Total motor gasoline inventories increased by 3.3 million barrels, above expectations for a gain of 0.7 million barrels, after falling by 0.8 million barrels in the preceding week.  The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand. Oil prices were sharply higher before the supply data as investors hung on to hopes for action by global central banks and other authorities to stimulate growth and boost the world economy.

Gold
Gold futures traded sharply higher during U.S. afternoon hours Wednesday, surging to a four-week high after the European Central Bank kept rates unchanged and pledged to extend some of its liquidity providing operations. Market participants noted that gold’s gains accelerated after breaking above key resistance close to USD1, 630, triggering fresh buy orders amid bullish chart signals. Investors hung on to hopes for action by global central banks and other authorities to stimulate growth and boost the world economy, boosting the appeal of the precious metal. Gold prices have rallied on past monetary stimulus measures. Investors tend to pile in to the yellow metal on fears that excess liquidity would put a damper on the value of paper currencies and spark inflation. The precious metal is widely considered a hedge against inflation and a store of value. Gold traders will be looking for clues as to the likelihood of a fresh round of monetary easing, which could potentially hurt the U.S. dollar and support gold.