US-Iran Peace Talks Conclude, Silver Prices Jump, Spot Premiums Widen, Trading Weak [SMM Daily Review]

Today, SMM's 10 o'clock Ag (T+D) price on the Shanghai Gold Exchange was 16,871 yuan/kg, with the premium range quoted at TD parity to +20 yuan/kg, averaging +10 yuan/kg.

On the macro front, the US and Iran reached a memorandum of understanding, to be officially signed in Switzerland on June 19, with fighting on all fronts to cease immediately and the Strait of Hormuz to resume free passage; geopolitical risk premiums pulled back sharply. Affected by this, oil prices opened with a plunge, precious metals opened higher with a gap, and as of now, silver's opening gain has exceeded 6%.

In the spot market, overall quoted price spreads were relatively large today. The rebound in silver prices may dampen downstream purchasing demand, while suppliers' sentiment to hold prices firm and hold back from selling intensified, pushing up the high end of premiums. Morning quotes in Shanghai were mainly centered around TD parity to +20 yuan/kg, but the actual consumer market saw little change, with transactions still skewed toward the lower end. Low-priced cargoes in other regions were largely cleared, and smelters' market quotes mostly hovered around parity to +10 yuan/kg.

Overall, the macro situation was significantly disrupted by news. This week, market focus is on the progress of US-Iran tensions and signals from Friday's Fed meeting. The high end of spot premiums edged up, but actual transactions were weak; going forward, attention should be paid to downstream purchase willingness.