[Strong US Dollar and Treasury Yields Pressure Silver Prices; Spot Trading Sentiment Sluggish]

Today, SMM’s 10:00 a.m. price for the SGE Ag (T+D) was 14,567 yuan/kg, with the premium/discount range quoted at parity to +10 yuan/kg against TD, and the weighted average price at 4.5 yuan/kg; against the most-traded SHFE 2612 contract, it was at a discount of 45-35 yuan/kg.

On the macro front, Fed’s Hammack made hawkish remarks, saying rates still need to be raised; Kazakhstan’s central bank plans to reduce its gold holdings. Meanwhile, geopolitical tensions in the Middle East continue to escalate, and the Democratic Republic of Congo’s central bank plans to increase its gold holdings to 5 mt by year-end. Recently, precious metals prices have lacked clear news-driven guidance, with the US dollar and US Treasury yields staying high, continuing to pressure precious metals. Attention should be paid to upcoming US September CPI data for guidance.

In the spot market, the basis between TD and the SHFE 2612 contract narrowed to 30 yuan/kg in morning trading, and traders’ overall quoted premiums were higher than yesterday. In the Shanghai area, morning trader quotes were concentrated at a discount of 30-35 yuan/kg against SHFE 2612, smelters showed limited interest in offering, and overall trading activity was sluggish. Downstream purchases were mainly small orders, with most inclined to negotiate prices, and actual transaction prices were equivalent to parity to a slight discount against TD.

Overall, the macro front is mixed with no dominant guidance, and high US dollar and Treasury yields continue to pressure precious metals; the spot market is thinly traded, with downstream users only making small just-in-time procurements, and silver prices are expected to continue consolidating in the short term.