Today, SMM's 10:00 am price for Ag (T+D) on the Shanghai Gold Exchange was 16,282 yuan/kg, with premiums quoted in the range of TD-5 to +5 yuan/kg and a weighted average price of 0.8 yuan/kg.
On the macro front, Fed Governor Waller said he expects CPI and PPI next month to be at reasonable levels, that the current rate setting is sufficient to bring inflation back to the 2% target, and that the Fed can wait one more meeting before making a decision. After Waller's dovish remarks, traders' bets on a Fed rate hike in September edged down from 63% to 60%, the US dollar fell 0.56%, US Treasury yields declined across the board, and spot gold rose about 2% in a single day. The market reacted early with an overall bullish bias ahead of tonight's non-farm payrolls data release; if the data beats expectations, precious metals may receive further support.
In the spot market, the spot-futures price spread widened slightly today, trader selling sentiment was weak, and overall quotes leaned toward the higher end. At the start of the month, smelters faced relatively small shipment pressure, with quotes mostly concentrated near parity against TD. Higher silver prices continued to curb some downstream consumption, with purchases mostly leaning toward negotiated lower-priced cargoes, and overall trading was average. Early morning quotes in the Shanghai region were mainly concentrated near TD-5 to +5 yuan/kg. Today, the market's premium/discount quote against the most-traded SHFE 2610 contract was a discount of 45 to 35 yuan/kg.
Overall, the US Fed released dovish signals, and combined with the market's early reaction to expectations of stronger-than-expected non-farm payrolls, precious metals extended their rebound in the short term. In the spot market, rising prices led to an increase in short positions, the spot-futures price spread widened slightly, suppliers held prices firm with strong sentiment, and quotes leaned toward parity.
