Geopolitical easing expectations fall through, oil prices and US Treasury yields rise, silver futures continue to decline [SMM Daily Review]

Today, SMM's 10:00 a.m. price for SGE Ag (T+D) was 14,782 yuan/kg, with the premium/discount range maintained at parity to +10 yuan/kg against TD, and the weighted average price was 4.39 yuan/kg. On the macro front, the failure of expectations for geopolitical easing pushed oil prices higher, while rising US Treasury yields weighed on precious metals valuations. On the US-Iran front, Trump rejected Iran's proposed ceasefire and plan to reopen the Strait of Hormuz, cooling market expectations for a short-term easing of US-Iran relations. Oil prices rose rapidly, while US Treasuries faced selling pressure, with 2Y, 10Y, and 30Y Treasury yields continuing to climb. The 10-year Treasury yield briefly rose above 5.2%, persistently weighing on precious metals asset valuations.

In the spot market, the spot-futures price spread between the most-traded SHFE silver contract and SGE silver T+D remained in the 50-60 yuan/kg range. In early trading, supplier quotations changed relatively little from the previous trading day, with some traders suspending quotes due to the approaching holiday, resulting in a wide price spread. Early morning quotations in Shanghai were at discounts of 60-50 yuan/kg against the most-traded SHFE 2612 contract, or at parity to premiums of 10 yuan/kg against SGE Ag (T+D). Downstream buyers made normal inquiries and purchases, with transactions skewed toward the mid-to-low end of mainstream quotations. Some orders for cargoes with invoices dated this month were transacted at the higher end, mainly in small lots.

Overall, precious metals lack support from further easing expectations in the short term. Market trading is gradually shifting toward core US economic data, with September PCE and non-farm payrolls data set to become key references for judging the US Fed's future monetary policy path. The silver spot market saw normal overall trading, with transactions concentrated in the parity to slight premium range against SGE Ag (T+D).