FXStreet notes that gold extended its record-breaking rally with futures touching $2,000/oz for the first time in history while silver hit $26/oz on Tuesday. Economists at TD Securities expect gold and silver to consolidate their gains at levels around $1,880/oz and $22/oz before resuming the uptrend.

“Before gold moves above $2,000/oz and silver into new highs, it is quite likely these metals consolidate their gains at levels around $1,880/oz and $22/oz first. After settling at lower price levels, however, a normalizing global economy, sub-potential growth for a prolonged period and the fraying of global supply chains in the aftermath of the coronavirus crisis likely means that policy rates could well continue to be set below the rate of inflation with yield suppression also being a feature of monetary policy, which should eventually see the resumption of the downward trend in real rates into even deeper negative territory.

“Gold prices could test well above TD Securities' Q4-2021 projected average price of $2,000/oz, with silver also surging to new cyclical records. Monetization pressures as fiscal deficits surge in the US and across the world, should increasingly see investors choose the yellow and white metal as safe-havens.”

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories tumbled by 10.612 million barrels in the week ended July 24. Economists had forecast a gain of 0.357 million barrels.

At the same time, gasoline stocks increased by 0.654 million barrels, while analysts had expected a decline of 0.733 million barrels. Distillate stocks rose by 0.503 million barrels, while analysts had forecast a decrease of 0.267 million barrels.

Meanwhile, oil production in the U.S. remained unchanged at 11.100 million barrels a day.

U.S. crude oil imports averaged 5.1 million barrels per day last week, decreased by 0.8 million barrels per day from the previous week.