The China's National Bureau of Statistics released their data on consumer inflation (CPI) which increased 1.5 percent for the yearly period in March. This data was released on Monday, 11 of March 2022.

This figure rose significantly from the previous month, and exceeded the economists' expectations for a 1.2 percent increase. When compared to previous years, china's current consumer inflation trend has been far away. 

The reason is that the pork stocks that were previously very limited due to the outbreak of African swine fever. However, the things have now returned to normal situation again. 

This condition became a back of the pork meat price decline for about 41.4% yearly know this March. As a result, the prices of foods declined up to 1.5% and this is an impact because of limited stock. 

The Non – Food Goods Prices Rise Significantly 

On the other hand, the price of non-food goods skyrocketed by 2.2% in the market. Various staples also increased such as flour (+1.7%), vegetable oil (+0.6%), fresh vegetables (+0.4%), and also eggs (+0.3 percent). 

The sharp rise in the price of staples is more due to the increase in the price of several goods. Those are like the wheat, corn, and soybean commodities in the International market.

The core inflation which doesn’t insert the food and energy prices category was noted in a higher position. That increased by 1.1% yearly on this March. That was unchangeable or not different than the previous month. 

Core inflation itself is a data which is always highlighted by the policy makers. The reason is that it doesn’t count the food and energy prices which were fluctuating the time, so that it describes the economic condition further. 

The PPI Data or Release also Increased by 8.3%

Elsewhere, the producer inflation (PPI) data was also released this morning. It showed an 8.3 percent increase from a year earlier. This experienced a small change in the number which becomes a sign of something. 

Although slightly higher than the 8.8% rise in February, but historically, the China's PPI is still near multi-year highs. The quite high PPI is caused by the supply chain and distribution disruptions caused by the pandemic.

Meanwhile, the Gold prices closed higher at the weekend, shrugging off the U.S. Dollar which faced uncertainty at the peak of its rally. The spot of gold rose by 0.5% to $1941.94 an ounce.

Besides that, the gold futures on the New York Comex increased by 0.4% to $1945.6. The XAU/USD chart below shows the close of the price at $1945.80, up 0.77% from the daily opening level.

Some Policies are Inline with the Market Expectation 

An important fundamental catalyst last week was the release of minutes of the Fed meeting. In the report, it was revealed that a number of meeting members approved another rate hike for some time to come by 50 bps.

They also agreed a plan to downsize assets of up to $95 billion which swelled due to the crisis because of the COVID-19 pandemic. These policies are in line with the market expectations.

Participants Of the meeting in general also agreed that the restrictions (balance sheet) can be carried out gradually over a period of three months or a little longer.

That is if the market conditions allow that. This was explained in the minutes of the FOMC meeting which took place on March 15-16, 2022.

Several Situations Press the Gold commodities 

A Fed rate hike will generally put the gold prices under pressure. However, the warming U.S. inflation that underlies the policy managed to hold this commodity back from significant pressure. 

In addition, the uncertainty of the Russian-Ukrainian war also makes the safe haven function of gold still looming. That brings the stream enters the precious metal commodity.