Precious metals were dragged lower by gold futures on Wednesday (17 August) as the commodities market awaited minutes of the July meeting of Federal Open Market Committee, the US Federal Reserve's rate-setting body.

Gold traders did little to firm up trading volumes of the yellow metal, worried about a sharp price correction should the US central bank convey a more hawkish tone on a possible interest rate hike in 2016.

At 4.23pm BST, the Comex gold futures contract for December delivery was down 0.43% or $5.90 to $1,351 an ounce, having risen to $1357.90 on Tuesday before declining back lower after the dollar strengthened on hawkish comments from New York Federal Reserve President William Dudley on the possibility of a September US interest rate hike.

FXTM research analyst Lukman Otunuga said: "Risk aversion has kept gold buoyed but US rate hike expectations continue to pressure prices lower. From a technical standpoint, bulls need to keep above $1315 to maintain the daily bullish uptrend."

While largely in-step with a weaker precious metals market, silver futures registered even steeper intraday declines with the Comex contract down 1.10% or 22 cents at $19.66 an ounce. Concurrently, spot platinum was down 0.52% or $5.83 to $1,111.62 an ounce. Analysts expect further declines if the equity market strengthens and the Fed issues hawkish soundings.

Meanwhile, the oil futures rally, triggered by market chatter of possible talks on an output freeze by producers, received further support after the US Energy Information Administration (EIA) reported a higher than expected drawdown of crude supplies.

In a scheduled data release, the EIA said domestic crude supplies declined by 2.5m barrels in the week ended 12 August, totalling 521.1m barrels, contrary to market forecasts of a much lower drawdown in the region of 200,000 to 500,000 barrels.

Nonetheless, analysts at Morgan Stanley believe US crude oil inventories face growing challenges. In a note to clients, ahead of the latest data release, the investment bank's commentators observed: "Oil inventories are set to build – likely above normal – over the coming months. In essence, the US is done drawing for the year other than random weeks and December."

"Given the market's intense focus on these US statistics of late, it may be difficult to support any larger oil rally if US inventories are rising. Furthermore, not only are Canadian imports to the US likely to continue to rise, but waterborne imports should be slow to fade after strong incentive pricing just a few weeks ago," Morgan Stanley analysts added.