US Fed Interest Rate Decision Meets Expectations Silver Prices Rally and Retreat This Week [SMM Weekly Silver Market Review]

The US Fed decided to keep interest rates unchanged for the second time as of March 19, maintaining the target range for the benchmark rate at 4.25%-4.50%, in line with market expectations. Expectations for future interest rate cuts remain high. Due to concerns over trade tariff policy uncertainties, traders have been moving silver to the US, leading to tight silver inventories in the London market and a significant rise in the London silver lease rate. This large-scale metal transfer has increased the risk of a "silver run" in the London market.

【Economic Data】

Bullish: US February retail sales rose 0.2% month-on-month, higher than the previous value but lower than expected; EIA crude oil inventory for the week ending March 7 was 1.448 million barrels, below both expectations and the previous value.

Bearish: EIA crude oil inventory for the week ending March 14 was 174.5, above both expectations and the previous value. Initial jobless claims for the week ending March 15 were 223,000, with the previous value at 221,000 and expectations at 224,000.

【Spot Market】

Silver: After COMEX silver futures broke through the key resistance level of $34 per ounce this week, longs took profits, resulting in a slight correction. Domestic silver prices also experienced a jump initially and then pull back. In the spot market, premiums and discounts for self pick-up of ton-level national standard silver ingots in Shanghai ranged from -3 to -1 yuan/kg, while major TD premium quotes were 0-2 yuan/kg. In Shenzhen, national standard premium quotes remained at 2-3 yuan/kg. Mid-week, there was a delivery of SHFE silver, and after some traders transferred to delivery warehouses, the market saw a temporary shortage of circulating supply. As the weekend approached, silver prices pulled back after an initial surge, and buyers made purchases at low points, with moderate trading activity.

PV: The reference average price for solar cell rear-side silver paste this week was 5,399-5,454 yuan/kg; the reference average price for solar cell front-side finger was 8,133-8,216 yuan/kg; and the reference average price for solar cell front-side busbar was 8,083-8,166 yuan/kg. This week, prices continued to fluctuate at high levels. Silver nitrate companies mentioned that H1 PV installation orders maintained growth, and the increase in silver prices had not yet affected their raw material stockpiling needs. However, consumption in the non-PV electronic silver paste sector performed relatively poorly, with some areas still facing certain challenges.

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