Geopolitical Conflicts and Rate-Hike Expectations Suppress Silver Prices, Weakness Hard to Reverse [SMM Daily Review]

Today’s SMM quote for SGE Ag (T+D) at 10:00 AM is 13,960 yuan/kg, with the premium/discount range quoted at TD-10 to +10 yuan/kg and an average of 0 yuan/kg.

On the macro front, the US military launched airstrikes on Iran for the third consecutive night at 4:45 PM Eastern Time on July 13. Trump officially notified Congress that "hostilities with Iran have resumed." From 20:00 GMT on July 14, the US military will impose a naval blockade on all Iranian ports and coastal areas. Meanwhile, Federal Reserve Governor Waller made clearly hawkish remarks, adding further weight to expectations for rate hikes. The market has now fully priced in at least one rate hike in September and fully priced in two hikes by the end of next March. Geopolitical conflicts and expectations for Fed rate hikes continue to exert pressure, with the downtrend in precious metals remaining intact. At 20:30 tonight, attention may be paid to the US June CPI data for further market guidance.

Spot market, silver prices continued to fall, but a "rush to buy amid continuous price rise and hold back amid price downturn" sentiment emerged, leading to abundant selling offers. Combined with slightly narrowing export profits and weak domestic trade demand, today's premiums further dipped toward parity to slight discounts. Downstream transactions were mainly based on price negotiations, with suppliers' offers showing some divergence. In Shanghai, morning offers were mainly concentrated at TD-5 to +10 yuan/kg; in Shenzhen, some standard-grade sources were concentrated around TD-10 yuan/kg to parity, with low-priced supplies continuing to emerge and downstream buyers showing strong inclination to push for lower prices. Today’s market premium/discount quotes against the most-traded SHFE 2608 contract stood at a discount of 35-15 yuan/kg.

Overall, the downward trend in precious metals remains unchanged, with dense bearish factors and silver prices continuing to be under pressure. Spot premiums, affected by weak demand, saw limited transactions, with the center continuing to shift toward the lower end.