The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories fell by 1.001 million barrels in the week ended October 16. Economists had forecast a drop of 1.021 million barrels.

At the same time, gasoline stocks rose by 1.895 million barrels, while analysts had expected a decline of 1.829 million barrels. Distillate stocks tumbled by 3.832 million barrels, while analysts had forecast a decrease of 1.743 million barrels.

Meanwhile, oil production in the U.S. plunged by 600,000 barrels a day to 9.900 million barrels a day.

U.S. crude oil imports averaged 5.1 million barrels per day last week, down by 167,000 barrels per day from the previous week. 

FXStreet notes that gold prices have struggled lately. A weaker dollar has supported the yellow metal somewhat but more investors have taken profit recently. Investors are now less convinced of another rise above $2,000 per ounce and are set to continue taking profits. However, economists at ABN Amro expect XAU/USD to race higher towards $2,100 in 2021. 

“The US elections are approaching and we think that it is likely that more investors will take profit in gold for two reasons: First, more uncertainty could result in a more risk-off behaviour and thus liquidating long gold positions. Second, expectations of higher economic growth if Biden wins could temporarily support the dollar. As a result, gold prices will probably decline.” 

“As the Fed will keep rates low for the coming years, US real yields will continue to be negative. This will support gold prices again in 2021.” 

“Next year, we expect gold prices to move towards $2,000 per ounce again.”