Bullish inventory data drives Crude Oil higher, precious metals finish in the Red

Crude Oil spent most of its pit session in an up-trend, getting a boost from bullish inventory data that showed a draw of 6.522-M bbls when a draw of 1.0-M bbls was anticipated.

The energy component climbed to a session high of 89.49 but then plummeted to a session low of 87.92 bbl in reaction to the little-changed FOMC statement.

Crude Oil recovered the loss quickly and settled with a 1.0% gainer at 88.97 bbl.

Nat Gas rose to a session high of 3.24 per MMBtu in morning action but was unable to sustain the move. It dipped to a session low of 3.12 per MMBtu before it attempted a slight recovery and settled at 3.17 per MMBtu, or 1.6% lower.

Precious metals extended Tuesday's losses during Wednesday's pit trade as the USD inched higher. Action came on employment and manufacturing data, and ahead of the FOMC policy directive announcement.

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Gold slid to a floor session low of 1598.00 in morning action but was able to erase some losses. It settled the session with a 0.5% loss at 1607.10.

Silver's drop took it as low as 27.06 moments after pit trade opened. The white metal also inched slightly higher for the remainder of its session and settled with a 1.4% loss at 27.52.

US Gold futures prices ended the US day session modestly lower and then extended those losses slightly in the wake of the release of the FOMC statement from the US Federal Reserve.

The Fed statement did not contain any significant policy changes, as many market Bulls were hoping for a new monetary stimulus program aka QE3.

The USD index did rally following the FOMC statement, which was a bearish development for the precious metals.

Dec Gold last traded -8.80 at 1,605.80 oz.

Spot Gold was last quoted -9.70 at 1,604.9 oz.

Sept Comex silver last traded - 0.539 at 27.37 oz.

The focus is now on the European Central Bank's policy meeting and press conference Thursday. The Bank of England also meets to discuss its monetary policy, with results on Thursday.

The ECB is expected by many to announce a fresh monetary stimulus package. Any monetary easing moves by the major central banks of the world would be at least initially Bullish for many markets, including the precious metals.

In overnight news: Germany's economy minister reportedly said allowing the European Union's new bailout fund to have broad banking powers is not a good way to go. The German Bundesbank president also made hawkish comments on the EU bailout process. Those remarks seem to run counter to recent statements from the European Central Bank president Mario Draghi, who last week said the ECB would do whatever it takes to keep the Euro currency in its present form.

There was also more weak economic data coming out of the EU Wednesday. The Spanish 10-year bond yield was quoted just above 6.5%, while Italian bond yields were quoted just below 6% Wednesday.

The next focus of the market turn to the US employment report on Friday morning.

The USD index traded higher and hit a new daily high following the FOMC statement.

Crude Oil prices also traded modestly higher Wednesday.

WTI Crude Oil 88.82 +0.76 (+ 0.86%)

The London PM Gold fix is 1,599.00 vs the prior London PM fixing at 1,622.00.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.