CRUDE OIL & GOLD TALKING POINTS:
- Crude oil prices[1] rise as EIA reports dramatic inventory drawdown
- Gold prices[2] swing to range top courtesy of Trump/Junker meeting
- Dovish ECB might boost US Dollar[3], weighing on commodity prices
Crude oil prices shot higher as EIA inventory data showed stockpiles shed 6.15 million barrels last week, an outflow nearly three times larger than the projected 2.23 barrel draw. The outcome likewise dwarfed the larger 3.16 million barrel decrease signaled in a private-sector estimate from API[4].
Gold prices swung higher as the US Dollar weakened, boosting the appeal of the standby anti-fiat alternative. The greenback drifted lower as traders reduced exposure ahead of the closely watched meeting between US and European Commission presidents Donald Trump and Jean-Claude Junker, respectively.
When the conclave produced an agreement[5] that de-escalated immediate trade war escalation fears (as expected[6]), jubilant investors bid up sentiment-geared commodity bloc currencies. The Euro[7] managed tepid gains as well. All this pressured USD[8] lower still, offering gold a further lift.
COMMODITIES MAY FALL AS DOVISH ECB BOOSTS US DOLLAR
Looking ahead, the knock-on influence of the ECB monetary policy announcement may emerge as defining for near-term price action. The central bank has already put the path of QE asset purchases on autopilot through year-end but traders will want guidance on when rates will begin to rise thereafter.
ECB President Mario Draghi will almost certainly face a barrage of questions to this end at the press conference following the announcement. Earlier messaging suggested a hike won’t come at
