On April 15, the gold market gradually accumulated upward momentum amid range-bound fluctuations. GTC Zehui Capital believes that, although still in a broad consolidation phase overall, moderate inflation at the production end provides additional upward support for precious metals. Against a backdrop of macroeconomic uncertainty intertwined with safe-haven demand, gold's appeal continues to strengthen, and market sentiment is gradually tilting towards the bullish side.
The latest data shows that the Producer Price Index (PPI) rose 0.5% month-over-month in March, matching the revised 0.5% from the previous month but falling short of market expectations of approximately 1.0%. Year-over-year, wholesale inflation increased by about 4.0%, a relatively high level in over a year, yet still below the prior market estimate of around 4.6%. GTC Zehui Capital stated that this combination of data reflects inflation's resilience without being significantly out of control, preserving room for policy adjustments.
Core PPI, which excludes food and energy, rose only 0.1% month-over-month, lower than the prior revised figure of 0.3% and significantly below market expectations of about 0.4%. The year-over-year increase was approximately 3.8%, also weaker than expected. The cooling core inflation further indicates limited pressure from upstream prices transmitting downstream, which to some extent alleviates market concerns about persistently high inflation.
Following the data release, gold prices edged higher, with spot gold rising to around $4775 per ounce at one point, marking an intraday gain of about 0.7%. Analysts suggest that the retreat in inflation data provides breathing room for the market while diminishing the necessity for continued monetary policy tightening. Despite energy prices remaining elevated, inflation has not surged in tandem, indicating a relatively limited cost-pass-through effect.
From a macroeconomic perspective, the energy market remains influenced by geopolitical risks, with oil prices trading in a relatively high range, yet not broadly driving inflation higher. Simultaneously, the easing core price pressures increase the possibility of a marginal loosening in the policy stance, subsequently impacting interest rate expectations and currency trends. This combination of "supply shock coupled with slowing inflation" creates a typically bullish environment for gold.
As a leading indicator, the PPI typically reflects cost changes at the production end and may gradually transmit to the consumer side. The current data performance suggests that while cost pressures exist, their transmission to final prices is limited. GTC Zehui Capital believes this structural change will help stabilize inflation expectations while providing room for future policy adjustments, thereby indirectly supporting gold prices.
Some analytical views point out that, against the backdrop of a temporary rise in energy prices, producer inflation remaining below expectations indicates multiple counterbalancing factors within the economic system. For instance, falling natural gas prices, declines in some trade costs, and an overall moderation in services inflation are all weakening overall price pressures. Data shows that approximately half of the increase in final goods prices in March came from a roughly 15.0% rise in gasoline prices.
Overall, although the transmission of rising energy prices is ongoing, the overall pricing power within the economy has weakened, suggesting that the upside for inflation may be constrained. GTC Zehui Capital stated that, against this backdrop, the market is caught in a tug-of-war between multiple factors: on one hand, uncertainty stemming from supply disruptions, and on the other, expectations for policy easing driven by moderating inflation. The interplay of these forces allows gold to retain potential for further gains even while consolidating at high levels.