The U.S. Energy Information Administration (EIA) reported on Wednesday that crude inventories plunged by 7.169 million barrels in the week ended August 27, following a decline of 2.979 million barrels in the previous week. Economists had forecast a decrease of 3.088 million barrels.

At the same time, gasoline stocks rose by 1.290 million barrels, while analysts had expected a fall of 1.633 million barrels. Distillate stocks reduced by 1.732 million barrels, while analysts had forecast a draw of 0.650 million barrels.

Meanwhile, oil production in the U.S. increased by 100,000 barrels a day to 11,500 million barrels a day.

U.S. crude oil imports averaged 6.3 million barrels per day last week, up by 183,000 barrels per day from the previous week.

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that gold's moves higher are still viewed as corrective only while the yellow metal remains below the $1835 region.

“Gold has spent the past week consolidating around the 200-DMA at $1810. Dips back from here are indicated to remain shallow and should be contained ideally by $1781.”

“While above $1750, the 29th June low it will remain neutral to positive.” 

“Key resistance is the mid-July high at $1834, and the 55-week ma at $1835.41, a move above here is needed to retest the $1856/57 4th June low and the $1871 2020-2021 downtrend.” 

“Below $1750, support is found at $1679.80/$1677.83, and is reinforced by the $1670 June 2020 low.”

FXStreet reports that economists at TD Securities note that gold outperforms silver in stagflation whereas the yellow metal is set to form an uptrend on a break above $1870 by the end of this year.

“Slowing global growth momentum and portfolio effects from tapering QE should impact silver more than gold.”

“Gold should benefit from rising central bank interest while presenting optionality for an inflation overshoot, as prices need only breach $1870/oz by year-end for an uptrend to form.”