Events
On April 12, 2022, US CPI data were released. According to the statistics of the U.S. Department of labor, the year-on-year growth rate of CPI in the United States in March 2022 was 8.5%, expected to be 8.4%, and the previous value was 7.9%; The month on month growth rate was 1.2%, expected to be 1.2%, and the previous value was 0.8%.
Comments
The year-on-year growth rate of CPI in the United States hit a 41 year high, and the energy index contributed most. From the year-on-year data, the CPI of the United States increased by 8.5% year-on-year in March 2022, the highest level since December 1981. Among them, the fuel oil index, gasoline index and used car index contributed significantly throughout the year. The fuel oil index increased by 70.1% year-on-year in March 2022, the gasoline index increased by 48.0% year-on-year in March 2022 and the used car index increased by 35.3% year-on-year in March 2022. From the month on month data, the energy index made a great contribution in March 2022, including 22.3% month on month increase in fuel oil index, 18.3% month on month increase in gasoline index and 2.2% month on month increase in power index. Driven by various sub projects, the energy index rose by 11.0% month on month.
High inflation in the United States and strong volatility in gold prices. Before and after the US CPI data was released in March, the London cash price fluctuated significantly. At 7:40 p.m. on April 12, the current price of London gold began to rise sharply, and reached as high as US $1978 / ounce around 11 p.m. that day; COMEX gold prices also strengthened at the same time, rising to US $1977 / ounce around 11 p.m. that day.
The conflict between Russia and Ukraine has triggered disturbances in the international supply chain, and commodity prices may continue to be strong. First of all, Russia and Ukraine are major exporters of important commodities in the world. In 2020, the global proportion of Russia’s natural gas exports was 16.1%, and the global proportion of crude oil exports was 11.1%; In terms of Ukraine, in 2020, the global proportion of Ukrainian corn exports was 13.1%, and the global proportion of wheat exports was 8.6%. Secondly, under the influence of the conflict between Russia and Ukraine, the production and export of the two countries are generally limited, resulting in the general rise of global energy, Shenzhen Agricultural Products Group Co.Ltd(000061) and other commodity prices. As of April 11, 2022, the RJ / CRB commodity price index has reached 295.17 points, an increase of about 27.0% over the beginning of the year. As the current commodity price index continues to rise, US inflation is expected to remain high.
Gold has excellent anti inflation properties, and the high inflation level will continue to drive the gold price upward. According to the statistics of the World Gold Council, the nominal return of gold in the market environment of low inflation (the year-on-year growth rate of us CPI is less than or equal to 3%) is about 6.38%, higher than the nominal return of – 2.27% of Bloomberg commodity index in the same period, while in the market environment of high inflation (the year-on-year growth rate of us CPI is greater than 3%), the nominal return of gold is about 15.35%, higher than the nominal return of 12.91% of Bloomberg commodity index in the same period. Gold not only has certain benefits under different inflation conditions, but its benefits are more obvious under high inflation conditions. It is expected that under the background of high market inflation, the price of gold may rise further.
Investment advice
With high inflation in the United States, the hedging function of gold will be gradually reflected, and the gold price is expected to continue to be strong, and relevant gold production enterprises may benefit, such as Chifeng Jilong Gold Mining Co.Ltd(600988) , Zijin Mining Group Company Limited(601899) , Shandong Gold Mining Co.Ltd(600547) , etc.
Risk tips
Changes in the international geopolitical situation, abnormal fluctuations in commodity prices and changes in macroeconomic policies.
