[Price Review]
Silver prices remained under pressure this week, primarily due to renewed Middle East geopolitical tensions and sustained expectations for US Fed interest rate hikes this year, along with strong performance in European and US stock markets that continued to divert funds from the precious metals market. On the macro front, the new US Fed Chairman Warsh officially took office, with a hawkish stance reinforcing market tightening expectations; US-Iran negotiations remained volatile, and according to a Reuters report on the 28th, the US military launched a new round of strikes on military facilities inside Iran. Industrial demand side, as silver prices declined during the week, mainstream quotations and transaction discounts narrowed, but some suppliers' willingness to sell was limited by tax invoice audits and the nearing month-end, coupled with downstream consumption still not showing significant improvement. Only some downstream enterprises, short of tax invoice input quotas, could accept limited high-premium quotes, leaving the spot market overall sluggish in both trading and buying, with inventory continuing to accumulate. On the gold/silver ratio, as of May 27, the LBMA gold/silver ratio rebounded to 62x, continuing to widen WoW.
[Key Data]
Bearish Factors
Warsh officially took office as US Fed Chairman, with a clear hawkish tone.
US-Iran negotiations suffered major reversals, throwing market expectations into disarray. On May 25, Iran stated that consensus had been reached with the US on most issues, but on May 28, Trump publicly stated that "Iran negotiations have made no progress,"
Speculative funds withdrew en masse, with COMEX silver non-commercial net long positions falling sharply for three consecutive weeks and cumulative reduction exceeding 25,000 lots. The earlier influx of speculative funds concentrated on closing positions, amplifying the decline in silver prices.
Bullish Factors:
Peru's energy crisis persists, with a national state of emergency in place until year-end, and 12 large mines have implemented staggered production. May silver production is expected to decline by 5%-8%, and the global supply-demand gap remains.
[Near-term Focus]
May 29: US May University of Michigan consumer sentiment index final value
June 3: US May ISM manufacturing PMI
June 5: US May non-farm payrolls report
June 12: US May CPI data
Key attention points: Fed official speeches, latest developments in US-Iran negotiations, implementation of production restrictions at Peru mines
[Price Forecast]
Silver is expected to maintain a low-level consolidation seeking a bottom pattern next week, with core variables being Fed official speeches and the direction of US-Iran negotiations. Current market sentiment is extremely cautious, with macro pressure remaining the dominant factor, and the previous supply speculation narrative having largely faded. Operationally, it is advised to mainly watch and wait for clear stabilization signals. Domestic fundamentals side, downstream buying sentiment remains cautious, overall consumption remains sluggish, and the social inventory of spot silver ingots continues to accumulate. However, due to the lower absolute silver price and narrowing discounts for bank-backed purchase prices, mainstream spot transaction discounts are expected to contract slightly to within the gold exchange TD discount range of 20-0 yuan/kg.
![Gold, silver, platinum, and palladium rebound; precious metals sector surges over 5%; spot silver supply-demand dual weakness pattern continues [SMM Flash]](https://imgqn.smm.cn/usercenter/fNuSg20251217171735.jpg)
![[SMM Precious Metals Express]](https://imgqn.smm.cn/usercenter/JYbQQ20251217171736.jpg)
![[SMM Precious Metals Express]](https://imgqn.smm.cn/usercenter/PeWqW20251217171735.jpg)
