Event
February 10, 2022, the United States CPI data released. According to the Labor Department, CPI growth in the United States in January 2022 was 7.5% year-on-year, the highest level since March 1982, higher than the expected value of 7.3% and higher than the previous value of 7.0%. The month-on-month growth rate was 0.6%, expected to be 0.4%, and the previous value was 0.5%.
Comment
The year-on-year growth rate of CPI in the United States is the highest in nearly 40 years, with most of the contribution of the energy index. According to year-on-year data, CPI in the United States rose 7.5% in January 2022 from a year earlier, the highest level since August 1982. Among them, the major energy index and the used car index contributed significantly for the whole year, with the major energy index rising 39.9% year-on-year in January 2022 and the used car index rising 40.5% in January 2022. From the month-on-month data, the energy and food index contributed a lot in January 2022, of which the food index rose 0.9% month-on-month, and the energy index maintained a 0.9% month-on-month growth while the sub-project bulk energy index declined month-on-month.
Global inflation is high and gold prices are volatile. Gold prices fluctuated sharply before and after the release of US CPI data in January. Among them, the current price of London gold broke through $1840 / oz for the first time in nearly two weeks, reaching as high as $1842 / oz. COMEX gold futures also showed the same trend, breaking through $1840 / oz and reaching as high as $1843 / oz.
In the medium and long term, gold has excellent anti-inflation properties, and the higher level of inflation will drive the gold price up. According to the World Gold Council, the nominal return on gold is about 6.38 per cent in a low-inflation market (US CPI growth is less than or equal to 3 per cent year-on-year), while in a high-inflation market (US CPI growth is greater than 3 per cent), the nominal return on gold is about 15.35 per cent. Gold not only has a certain return under different inflation conditions, but also its income is more obvious under the condition of high inflation, and the anti-inflation property of gold is still excellent. Therefore, in the medium to long term, the price of gold is expected to rise further against the background of persistently high inflation in the United States.
Overseas outbreaks and geopolitical conflicts have intensified, economic uncertainty has increased, and gold prices have been supported. Judging from the current epidemic situation of novel coronavirus, the global spread of Omicron virus is making the number of new infections around the world experience the fourth wave of outbreaks. As of February 09, 2022, the number of new confirmed cases worldwide reached 2.3097 million on that day, and the cumulative number of confirmed cases has reached 403 million. In the context of the continued spread of the global epidemic, the uncertainty of the future economic situation still exists. On the other hand, the continuous emergence of geopolitical conflicts such as the Ukraine issue has intensified the volatility of the global market. On January 26th, 2022, the panic index (VIX) closed at 31.96, and the market volatility reached a new high in nearly a year. As of February 9, 2022, the average value of the VIX index in 2022 is about 22.94 points, which is higher than 19.67 points in 2021, and the overall market volatility is still relatively high. As a result, global economic uncertainty has increased and gold prices are poised to rise.
Investment suggestion
Under the operation of high gold prices, relevant gold production enterprises may benefit, such as Zijin Mining, Chifeng Gold, Yintai Gold and so on.
Risk hint
International geopolitical changes, abnormal fluctuations in commodity prices, macroeconomic policy changes.
