FXStreet notes that Gold/Silver ratio sold off aggressively eroding the 2011-2020 uptrend and Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, awaits further losses to the 200-week moving average at 82.34.

“The Gold/Silver ratio has sold-off aggressively eroding the 2011-2020 uptrend. It will shortly encounter the 84.04 December 2019 low. This may hold the initial test, but having eroded a major uptrend we suspect further losses to the 200-week ma at 82.34. Failure there will target the 79.17 September 2019 low.” 

“Rallies are likely to find the previous high at 93.10 – the July 2019 high.”

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories rose by 4.892 million barrels in the week ended July 17. Economists had forecast a decrease of 1.950 million barrels.

At the same time, gasoline stocks dropped by 1.802 million barrels, while analysts had expected a decline of 1.386 million barrels. Distillate stocks increased by 1.073 million barrels, while analysts had forecast a decrease of 0.618 million barrels.

Meanwhile, oil production in the U.S. grew by 100,000 barrels a day to 11.100 million barrels a day.

U.S. crude oil imports averaged 5.9 million barrels per day last week, up by 373,000 thousand barrels per day from the previous week.

Gold to challenge the $1921.50 2011 high - Commerzbank

FXStreet notes that gold is trading close to the $1860 mark, on course for the $1921.50 September 2011 high. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the yellow metal rally to stop at $1983.

“Gold is on course for the 1921.50 September 2011 high.” 

“Please note there is room for an overshoot to the top of a 49-year channel at 1983.00. It represents our long-term target. This should hold the initial test and provoke some profit taking.”

“Forays above 2000 are expected to remain short-lived.” 

“Support is offered by the 55-day ma at 1797 and the four-month uptrend at 1795. Below 1795 lies the 1765 May high. This guards the 1670 June low.”

FXStreet reports that Citi’s Ed Morse said, while talking to Bloomberg that gold, a zero-yielding safe haven, is a beneficiary of the low interest rate environment and the rally in the yellow metal may stall or run out of steam if inflation rises, forcing central banks to lift borrowing costs. 

Analysts at Goldman Sachs also see a potential rise in inflation as a key risk to gold’s price rally. The investment bank said earlier this year that gold would rise to a new record high above $1,920, but may a tough time crossing the psychological hurdle $2,000 if the Fed hikes rates in response to a rise in inflation. 

Gold has rallied by 21.5% so far this year, The metal picked up a strong bid at lows near $1,450 in mid-March after the U.S. Federal Reserve and other major central banks launched unprecedented liquidity-boosting programs to stabilize markets and help the global economy absorb shocks arising from the coronavirus outbreak.