Silver Prices Extend Rise but Spot Silver Discounts Widen; Market Awaits CPI Guidance [SMM Daily Review]

SMM’s 10:00 AM Ag(T+D) fixing on the Shanghai Gold Exchange was 16,144 yuan/kg, with premium/discount quotes ranging from TD-10 to +5 yuan/kg and an average of -2.5 yuan/kg.

On the macro front, the Bank of Japan governor hinted at a rate hike in September and helped orchestrate joint U.S.-Japan yen buying, with a stronger yen potentially putting some pressure on the U.S. dollar index. According to the CME FedWatch Tool, the probability that the Fed will keep rates unchanged through September is 48.8%, while the probability of a cumulative 25-basis-point hike is 51.2%, indicating cooling rate-hike expectations. Bullish factors currently dominate the precious metals market, and prices are expected to maintain a fluctuating upward trend in the near term. Today’s focus is on CPI data guidance; if the data comes in weaker than expected, it will further boost gold and silver prices.

In the spot market, the continuous rise in silver prices continued to suppress downstream industrial demand, with buyers largely staying on the sidelines. The price spread narrowed today, traders lowered their offers, and some suppliers opted to sell at reduced prices. Morning quotes in Shanghai centered around TD-5 to +5 yuan/kg. Reduced purchases by banks weakened the floor support, and only some acceptance-demand rigid transactions were concluded, with overall prices leaning toward parity or a small discount. In Shenzhen, some standard-grade cargoes were quoted at small discounts, with both buyers and sellers cautious. Today, the market’s premium/discount quotes for the SHFE most-traded 2610 contract were at a discount of 65-55 yuan/kg.

Overall, precious metals drifted higher today, supported by bullish factors and buying interest. In the spot market, selling pressure increased after silver prices rose, and transactions gradually shifted to discounts.