US-Iran Negotiations Kick Off, Silver Prices Drift Higher [SMM Daily Commentary]

Published: Aug 3, 2026 11:18

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[SMM Daily Review: US-Iran Negotiations Kick Off, Silver Drifts Higher] SMM, August 3 – US-Iran negotiations kicked off, with risk-off sentiment intertwined with plummeting crude oil and a weakening US dollar. The market interpreted this as a net bullish factor, and silver prices rebounded. Spot trading was sluggish early this month, with both supply and demand remaining weak. Attention turns to guidance from US economic data.

Today, SMM's 10:00 AM price for SGE Ag (T+D) was 14,170 yuan/kg. The premium/discount quote range was from parity to +10 yuan/kg against TD, with an average of +5 yuan/kg.

On the macro front, Trump announced the cancellation of strikes on Iran (the eighth such cancellation), and US-Iran negotiations officially began on the morning of August 4 Beijing time, marking the largest geopolitical shift of the day. On one hand, fading risk aversion sentiment was bearish for precious metals; on the other hand, a more than 6% plunge in crude oil, combined with a weaker US dollar, provided bullish support. At Monday's open, gold rose 0.75% and silver rose 1.42%, with the market interpreting the net effect as predominantly bullish. This week, attention may focus on US July economic data for further market direction.

On the spot market front, beginning-of-month trading remained sluggish, with the weak supply-demand pattern not yet improved. Early quotes from traders mostly favored discounts of 50-55 yuan/kg against the most-traded SHFE silver 2610 contract, while feedback from smelters and downstream buyers indicated quotes concentrated between parity and +5 yuan/kg against TD, with overall offers on the high side. In July 2026, SMM's 1# silver ingot production was 1,556 mt, down 0.38% MoM and down 3.59% YoY; cumulative production for January-July was up 5.3% YoY. Early quotes in Shanghai centered mainly from parity to +10 yuan/kg against TD; in Shenzhen, some national-standard supply was concentrated around parity, and although low-priced cargo existed, it did not significantly disrupt spot trade. Today, the premium/discount quote against the most-traded SHFE 2610 contract was at a discount of 65 to 50 yuan/kg.

Overall, the direction of the precious metals market this week remains unclear, and interpretations of US inflation data and the Federal Reserve meeting could intensify price fluctuations. The weak supply-demand pattern in the spot market persists, and attention should be paid to changes in actual trading conditions in the coming days.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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