Oil prices jumped more than 1 percent reaching 2016 highs on Tuesday, with U.S. crude settling above $50 a barrel the first time in almost a year, on concerns of domestic stockpile drops and worries about global supply shortfalls resulting from attacks on Nigeria's oil industry.
U.S. crude stockpiles were down by 2.7 million barrels last week, marking a third straight week of declines and a report by trade group American Petroleum Institute (API) released after prices settled showed a higher-than-expected crude draw of 3.6 million barrels.
Gold Higher
Gold also was up, hitting a fresh two-week high on Wednesday as the possibility of an early U.S. interest rate hike faded.
Spot gold was up 0.4 percent at $1,248.30 an ounce by 0355 GMT. It hit a high of $1,249.20 earlier in the session, its strongest since May 24. U.S. gold climbed 0.3 percent to $1,251.20.
According to William Wong, assistant head of dealing at Wing Fung Precious Metals in Hong Kong, "The direction for this week will be a little quiet (for gold), waiting for the FOMC meeting next week. But I think nothing is going to change due to disappointing non-farm payroll data."
China, the world's biggest consumer of the yellow metal, kept its gold reserves unchanged, at 58.14 million fine troy ounces at the end of May, from the end of April, the central bank said on Tuesday.
Analysts believe, however, that China still has enormous U.S. dollar holdings and will probably continue purchasing gold in order to diversify its Forex reserves which should help support the metal.