US CPI Cools More Than Expectations, Silver Prices See Technical Rebound [SMM Daily Review]

Today's SMM 10 a.m. Ag (T+D) price on the Shanghai Gold Exchange was 14,226 yuan/kg, with a premium/discount range of TD-5 to +10 yuan/kg and an average of 2.5 yuan/kg.

Macro side, the US June CPI recorded a negative MoM reading for the first time in six years: the unadjusted June CPI YoY growth rate slowed to 3.5% (expectations 3.8%, prior 4.2%), and the seasonally adjusted CPI fell 0.4% MoM (expectations -0.1%, prior +0.5%). The US dollar index fell below 101, giving precious metals a rebound momentum. Meanwhile, US forces resumed the naval blockade on Iran and continued airstrikes, while Iran claimed it had entered a "formal state of war," keeping geopolitical risks simmering. Tonight, attention may be paid to signals from Warsh's hearing and PPI data for guidance.

Spot market side, overall demand stayed sluggish today, with transactions leaning toward parity or slight discounts. Suppliers held offers steadily at relatively high levels, while downstream players mainly negotiated for lower prices. Early morning quotes in Shanghai were concentrated at TD-5 to +10 yuan/kg; in Shenzhen, some standard-grade cargoes centered around TD parity, with low-priced goods still emerging in the market. However, quotes for standard-grade silver ingots remained relatively stable, with strong sentiment among downstream players to push for lower prices. The spot-futures price spread widened today, with the market quoting a premium/discount of -40 to -20 yuan/kg against the most-traded SHFE 2608 contract.

Overall, CPI cooling more than expected postponed rate hike expectations, allowing precious metals to stage a technical rebound repair. However, spot premiums were constrained by sluggish demand, with the transaction center continuing to converge toward the lower end.