Silver Prices Consolidated at Highs; Spot Cargo Transactions Skewed Toward a Narrow Range [SMM Daily Review]

Today, SMM’s 10:00 pricing for SGEX Ag (T+D) was 16,039 yuan/kg, with premiums quoted in a range of TD-10 to +10 yuan/kg and an average of 0 yuan/kg.

On the macro front, the probability that the US Fed would keep interest rates unchanged in September was 66.9%, while the probability of a cumulative 25-bp hike was 33.1%. Market pricing showed that rate-hike expectations cooled further, forming a key bullish factor. However, a senior US senator demanded that Bessent explain the basis for intervening in the yen, and a potential yen rate hike could trigger a liquidity shock, indirectly weighing on gold and silver. Overall, the bullish structure in precious metals continued, continuing to consolidate at highs.

In the spot market, higher silver prices curbed downstream procurement demand, and wait-and-see sentiment was strong today. Against the backdrop of a widening spot-futures price spread, suppliers became more cautious in offering quotes. The market was mainly driven by transactions to meet rigid demand for partial acceptance, and overall was on par with parity. In Shanghai, morning quotes were mainly in the range of TD-5 to +10 yuan/kg; buying momentum was insufficient, and transactions tended toward the lower end. In Shenzhen, some national-standard cargoes were concentrated around a slight discount to parity. Today, the market’s premiums quotes against the SHFE the most-traded contract 2610 were a discount of 70-50 yuan/kg.

Overall, silver prices rebounded slightly today, but the news flow lacked further upward momentum, and prices are expected to move sideways in a narrow range in the short term. In the spot market, higher silver prices continued to suppress follow-up demand, and downstream players were mainly on the sidelines at the start of the week.