Gold tumbled as the Fed signaled in the March minutes that the chance of QE3 is low unless economic growth falters. The wordings of the minutes were also more hawkish than previous meetings. The benchmark Comex contract for the yellow metal plummeted to a 2-week low of 1640.2 before rebounding to 1662.4, down -0.46% at close. Strength in the US dollar also sent crude oil prices lower. Moreover, news that Saudi Arabia would not cut oil supply despite SPR release also pressured prices. The front-month contract for WTI crude oil fell -1.16% while the equivalent Brent crude contract slipped -0.45% during the day.

In the March minutes for the FOMC meeting, it's signaled that only 'a couple of members' believed further easing is 'necessary if the economy lost momentum' or if inflation falls below 2.0% over the medium term. This compared with the reference of 'a few' members in January and 'a number' of members at the December meeting.

The Fed upgraded its growth outlook slightly to 'moderate' from 'modest'. Yet, it emphasized that 'most participants' did not interpret the intermeeting economic data as 'pointing to a material revision to the outlook in 2013 and 2014' and a 'number of factors' are seen as likely to restrain the pace of the expansion. The balance of risk remained slightly to the downside and policymakers refrained from ruling out the chance of QE3.

Oil prices eased late last week amid talks of SPR release. Prices were further weighed down by a Reuters report that Saudi Arabia will not change its production even if the stocks are released. Yet, it would not attempt to attract buyers through price-cutting.

The industry-sponsored API reported a huge +7.8 mmb increase in crude oil inventory in the week ended March 30. The market had anticipated a milder gain of +2.5 mmb during the week. Gasoline fell -4.5 mmb while distillate dipped -1.4 mmb last week. Both dropped more than market expectations of -1.4 mmb and -0.5 mmb.