FXStreet notes that a surge in the U.S. real yields pushed down XAU/USD in February. While strategists at Capital Economics don’t expect the U.S. real yields to rise much more if at all, reduced safe-haven demand as the global economy recovers will mean that the gold price falls a little further over the course of this year.

“The price of gold continued to fall in February, and now sits close to an eight-month low. This has been primarily due to the significant rise in real yields over the last two weeks. Outflows from gold ETFs also continued, reflecting reduced investor demand for safe-havens.” 

“While the price of silver also declined over the past month, this was largely a reflection of heightened price volatility at the start of February. The silver price is still above its level at the start of the year and is high relative to the price of gold, potentially as a result of the recent rally in industrial metals.”

FXStreet notes that U.S. commercial crude stocks skyrocketed last week as refinery activity plunged and net imports surged. Strategists at Capital Economics expect stocks to rise a bit further in the coming weeks as refinery throughput remains constrained.

“The EIA’s weekly US Petroleum Report estimates that crude oil in commercial storage ballooned by a record 21.6 M barrels last week. This was much larger than the 7.4 M barrel increase reported by the American Petroleum Institute (API).

“The main factor behind the increase in crude stocks was the sharp decline in crude inputs to refineries. Refinery throughput plummeted by 2.3 M bpd to just 9.9 M bpd, the lowest level since records began in 1982, owing to the ongoing freezing weather-related disruption in the southern parts of the country.”

“The partial easing of quarantine measures and the warmer weather has supported road travel activity. We expect that gasoline stocks will rise further in the next few weeks as demand continues to revive as the virus is brought under control and as refinery throughput remains soft.”