Gold futures took a breather as traders moved market positions for profit taking on Thursday (7 July) following three successive sessions in positive territory. Meanwhile, oil prices slid further as the US Energy Information Administration's (EIA) data pointed to a weaker than anticipated inventory drawdown stateside.

Overnight, the US Federal Reserve revealed a dovish stance leading up to the Brexit vote. Minutes of the US central bank's 14-15 June meeting noted that monetary policymakers felt it was "prudent to wait" for the result of the UK's Brexit vote before deciding whether or not to raise interest rates.

In the vote that followed on 23 June, the UK voted to leave the EU. The ensuing turmoil triggered $2trn (£1.5trn, €1.8trn) in losses on global stock markets the day after the referendum, further diminishing chances of a rate hike by the Fed at its next meeting scheduled for 26-27 July.

The minutes saw the dollar shed 0.55% versus the yen and 0.27% versus the euro to change hands at JPY100.76 and €1.107 respectively. Despite a weaker dollar, Comex gold futures headed 0.98% or $13.40 lower, at 3:54pm BST to $1353.70 an ounce, on profit taking by traders, as new figures revealed voracious safe-haven calls by investors.

According to Bloomberg data, holdings in bullion-backed exchange-traded funds rose 4.1 tonnes to 2,001.4 tonnes, the first capping of the 2,000 tonne level in three years.

Nikolas Xenofontos, director of risk management at easyMarkets, said: "What is interesting about the rise in gold is that it pushed out of a predictable price range so we may see higher highs. Along with other precious metals, the fundamentals are providing a lot of support for gold."

Despite a marginal rise in Asian trading on a weaker dollar, oil benchmarks plummeted during early US trading as the EIA said commercial crude inventories fell by 2.2m barrels to a total of 524.4m in the week through July 1.

Further increases predicted for Brent

The figure was much less than the American Petroleum Institute's data published overnight which indicated that US crude stockpiles fell by 6.7m barrels last week; declining for a seventh week in a row. In response, the Brent front month futures contract fell 3.16% or $1.54 to $47.26 per barrel at 5:26pm BST, while the WTI fell 3.27% or $1.55 to $45.88.

However, investment bank UBS increased its second half forecasts for Brent and WTI to $51 and $48 per barrel respectively, up from $46.50 and $43.50 as the market continues to grapple with supply and demand rebalancing. UBS also predicts a further increase to $60 for Brent, and $57 for WTI in 2017, up from $55 and $52 respectively.

Going in the other direction, Morgan Stanley has forecast that a recovery in Canadian output alone, from outages following the Alberta wildfires earlier this year, will be sufficient to put the market back into oversupply for 2016, and oil may return to a trading range of $30 to $50.