Key Takeaways
- Gold prices surged nearly 1% to $4,429.87 per ounce, rebounding as a cooling U.S. labor market and a weaker dollar bolstered the appeal of the non-yielding asset.
- Sberbank (SBER) CEO German Gref warned that Russia's oil refining capacity losses—estimated at 10% to 15% due to drone strikes—are a primary driver of accelerating domestic inflation.
- Declining consumer spending has emerged as a critical concern for Russian leadership, with Gref noting that the economy is "overcooled" by high interest rates.
- Russia's 2026 oil production forecast was revised downward to 511 million tonnes, a 17-year low, reflecting the long-term impact of infrastructure disruptions and sanctions.
Gold Prices Rally Amid Shifting U.S. Economic Data
Gold (XAU) prices extended their recent gains on Thursday, rising close to 1% to reach $4,429.87 per ounce. The rally was supported by a retreat in U.S. Treasury yields and a softening U.S. Dollar Index, which typically makes bullion more attractive to international buyers.
Market sentiment shifted following data showing a slowdown in U.S. private employment growth for August. While the Federal Reserve remains focused on its 2% inflation target, investors are increasingly betting that a cooling labor market could limit the scope of future interest rate hikes, providing a tailwind for precious metals.
Sberbank CEO Sounds Alarm on Refining and Inflation
In a series of candid remarks, Sberbank (SBER) CEO German Gref highlighted the severe structural pressures facing the Russian economy. Gref identified the reduction in oil refining capacity as a major catalyst for faster inflation, as domestic fuel shortages drive up costs across the supply chain.
Recent estimates suggest that approximately 10% of Russia's refining infrastructure is currently offline for repairs following a wave of drone attacks. The resulting supply squeeze has forced the government to implement fuel sale restrictions in several regions, further complicating the Central Bank's efforts to stabilize prices.
Consumer Spending Slowdown Signals Recession Risks
Beyond the energy sector, Gref warned that declining consumer spending is becoming a significant drag on growth. He argued that the Russian Central Bank's decision to maintain high interest rates—which reached a peak of 21% in late 2024 before easing slightly—has "overcooled" the economy.
While Russia reported a 4.1% GDP growth rate in 2023, that momentum is fading as the "military multiplier" effect reaches its limit. Sberbank analysts have noted a deterioration in credit portfolio quality, with an increasing number of individuals and businesses seeking debt restructuring as the cost of borrowing remains prohibitively high.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.