Macro drivers limited amid sluggish trading; silver prices lack momentum for a rebound [SMM Daily Commentary]

Today, SMM's 10:00 AM price for the SGE Ag (T+D) is 13,892 yuan/kg, with premiums quoted in the range of TD-5 to +10 yuan/kg and a weighted average price of 1.6 yuan/kg; against the most-traded SHFE 2612 contract, it is at a discount of 45-30 yuan/kg.

On the macro front, Fed Chairman Warsh declined to reveal any clues on interest rates and did not clarify whether the rate hikes would continue in October, prompting the market-implied probability of an October hike to pull back below 15%. In addition, Trump signed an executive order to waive or suspend multiple sanctions, restrictive measures, and tariffs on Russia under the Graham Act, marginally easing Russia-Ukraine tensions. Precious metals futures rebounded slightly, but the overall momentum remained weak, with insufficient bullish support. In the short term, bulls and bears are locked in a tug-of-war, and prices are mainly consolidating with fluctuations.

In the spot market, trading sentiment was poor today. On one hand, overall procurement sentiment among end-users was sluggish. After silver prices stabilized following last week's sharp decline, large-scale transactions were mostly released mid-to-late week. With silver prices rebounding slightly today, downstream buyers largely turned to a wait-and-see stance. On the other hand, the basis between TD and the SHFE 2612 contract widened slightly in early trading, fluctuating around 35-45 yuan/kg. Suppliers quoted at relatively high levels, with early quotes in Shanghai concentrated at a discount of 30 yuan/kg against the SHFE 2612 contract, reflecting strong reluctance to sell. The wide gap between buyers' and sellers' quotes and psychological price levels led to poor actual transactions, mainly concentrated near parity with TD, with some national-standard cargoes at a slight discount.

Overall, macro bullish drivers are limited, and futures lack momentum for a rebound. In the spot market, end-user wait-and-see sentiment is strong, and the tug-of-war between suppliers holding prices firm and downstream buyers pushing for lower prices has intensified, resulting in sluggish overall trading.