The National Bureau of Statistics of China released data on February 11, revealing that in January 2026, the national Consumer Price Index (CPI) rose by 0.2% year-on-year and by 0.2% month-on-month. Compared to the 0.8% year-on-year increase in December 2025, the current rise decreased by 0.6 percentage points, indicating that overall prices are still operating in a low range. Behind the relatively stable overall figures, there is still significant differentiation in the fluctuation of food prices. The price of gold jewelry surged by 77.4% year-on-year, standing out prominently against the backdrop of low inflation, drawing market attention to changes in fund preferences and risk sentiment.
According to the data, the CPI in urban and rural areas both increased by 0.2% month-on-month in January. In terms of categories, food prices remained stable while non-food prices increased by 0.2%. Consumer goods prices and service prices both increased by 0.2%.
On a year-on-year basis, prices of food, tobacco, alcohol, and dining out decreased by 0.2%. Among them, pork prices dropped by 13.7% year-on-year, egg prices fell by 9.2%, becoming important factors contributing to the decline in CPI. Meanwhile, fresh vegetable prices rose by 6.9% year-on-year, fresh fruit prices increased by 3.2%, and aquatic product prices rose by 0.7%.
With less than a week until the traditional Chinese New Year (February 17), consumers are facing heavier bills for fresh vegetables as they enter the final countdown of New Year shopping.
In other categories, prices of other goods and services rose by 13.2% year-on-year, household goods and services increased by 2.6%; clothing and healthcare prices rose by 1.9% and 1.7%, respectively; transportation and communication prices decreased by 3.4%, and housing prices fell by 0.1%.
Feng Lin, Executive Director of Research and Development at East Money, stated that the current low inflation rate is fundamentally due to over 4 years of adjustments in the real estate market, continuous shrinkage of household wealth, and insufficient consumer confidence. It is expected that the low inflation trend will continue this year, with the annual CPI expected to stay around 0.5%, marking the fourth consecutive year in a state of low inflation.
Dong Lijuan, Chief Statistician of the Urban Department of the National Bureau of Statistics of China, attributed the decrease in the year-on-year CPI increase to “holiday mismatches” and “decreases in energy prices.” Last January, due to the Chinese New Year, the base figure was higher, and the international oil price fluctuations led to a year-on-year decrease of 11.4% in domestic gasoline prices, jointly pulling down the overall price level.
However, in the category of “other goods and services,” prices rose by 13.2% year-on-year, indicating that beyond basic commodities, the cost of life services continues to rise.
While consumer prices remain low, upstream industrial prices have not yet shaken off deflationary pressures. In January, the Producer Price Index (PPI) fell by 1.4% year-on-year, with a narrowing decline of 0.5 percentage points. Despite the narrowing decline, PPI has maintained a year-on-year negative growth for 40 consecutive months since October 2022, indicating continued weak demand in the industrial sector.
Wang Qing, Chief Macro Analyst at East Money, told Interface News that industrial prices will continue to face downward pressure until trends stabilize in the real estate market and consumer confidence improves.
Amidst China’s economic cooling and persistent low prices, gold jewelry prices skyrocketed by 77.4% year-on-year, making them one of the most significant categories of consumer goods.
Gold prices have fluctuated sharply internationally this year. After reaching a historic high on January 29, prices quickly fell back, experiencing a drop of about 9.25%, one of the largest single-day declines in over a decade.
US Treasury Secretary Benson, in an interview with Fox News on February 8, attributed the recent violent fluctuations in gold prices to speculative trading in the Chinese market, characterizing the trend as a “speculative peak and fall.” However, reports also suggest that factors such as adjustments in metal futures margins may also influence market volatility.
In recent years, China’s economic situation has continued to deteriorate, with the real estate market shifting from a wealth engine to a loss-making sink, stock market fluctuations, and meager deposit interest rates. Bloomberg cited Xing Zhaopeng, Senior China Strategist at ANZ Bank, stating that in an environment with low bond yields and extremely limited investment choices, “gold and silver have stood out as a few options that can bring returns.”
To boost the sluggish economy, the People’s Bank of China has insisted on loose policies, intensifying monetary over-issuance and idle capital. Massive speculative capital and individual retail investors have flooded into the precious metals market in China, raising global gold and silver prices and underscoring the challenge authorities face in directing capital toward the real economy.
This structural differentiation of “slight rise in consumer prices and soaring prices of precious metals” reflects that in the current economic environment, some funds are more inclined to allocate to hedge assets.