Gold Prices Rebound but Face Further Decline Amid Strong Dollar
Gold and silver prices have been influenced by recent events in the market. The US retail diesel price set a record of $6.31 on September 16, up 68% from a year ago, and crude oil is up about 52% over the same period. This surge in diesel prices is attributed to refining shortages, not crude shortages.
The shortage is caused by the Russia-Ukraine war, which has disabled about a quarter of Russia's refining capacity and collapsed its diesel exports. The US East Coast distillate stocks are at a record low with the heating season weeks away.
Oil prices may be influenced by WTI futures, but diesel prices have a more significant impact on inflation data and the dot plot. The median federal funds rate for the end of 2027 is 4.1%, the same as the end of 2026, with projections showing inflation back at 2% until 2029.
Gold settled Friday at $4,424.90, up $25.20, but fell by about $36 to near $4,389 this morning. The metal has no bid of its own on a day when yields are falling and the dollar is flat, which suggests that it may decline further.