Last Week's Prices Showed Inverted "V" Trend: Silver Gathered Strength [SMM Analysis]

Last week, market news was relatively stable. Silver prices fluctuated slightly and showed an inverted "V" trend.

[Macroeconomic Data]:

Bullish: The US July core PCE price index year-on-year was 2.6%, the same as the previous value and lower than the expected 2.7%. The final value of the US August University of Michigan consumer confidence index was 67.9, higher than the previous value of 67.8 and lower than the expected 68.

Bearish: The US EIA crude oil inventory for the week ending August 23 decreased by 846,000 barrels, lower than the previous value of 4.649 million barrels and the expected 2.265 million barrels. The US initial jobless claims for the week ending August 24 were 231,000, lower than the previous value of 233,000 and the expected 232,000.

The core PCE price index is known as the US Fed's "favorite" inflation indicator, and the July core PCE price index data proved that inflation is moving towards the Fed's target, which is bullish for the dollar and led to a brief drop in silver prices.

Since this data ultimately points to a Fed rate cut, the drop in the night session on Friday was likely a small preparation for silver gathering strength.

[Spot Market]:

Silver: Last week, as August was about to end, the market began to close accounts. Coupled with relatively high prices in the early and mid-week, market purchasing demand was weak, leading to a downward trend in spot premiums/discounts. In the Shanghai area, spot premiums/discounts were 2-3 yuan/kg, and for large manufacturers, spot premiums/discounts were 4-5 yuan/kg.

Downstream: Due to low-price purchases in the first two weeks of August, the downstream market has been relatively sensitive to prices recently. While maintaining normal rigid demand, downstream was relatively cautious about new purchase orders.