Silver Prices Under Pressure, Pull Back; U.S.-U.K. Trade Deal Triggers Precious Metal Retreat [[SMM] Weekly Review of Silver Market]

In terms of the US dollar, Fed Chairman Powell maintained a neutral tone, stating that the current policy stance is appropriate and that the US Fed is not in a hurry to adjust interest rates. The announced Fed interest rate decision for the US as of May 7 was 4.5%, in line with market expectations. Meanwhile, market consensus still holds that the US Fed will not cut interest rates before July. Additionally, following the announcement of the US-UK trade agreement on Thursday local time, market sentiment eased, and precious metal prices fell.

【Economic Data】

Bearish: Seasonally adjusted non-farm payrolls in the US for April were 177,000, compared to the previous value of 185,000 and the expected 130,000.

Initial jobless claims in the US for the week ending May 3 were 228,000, compared to the previous value of 241,000 and the expected 230,000.

Bullish: EIA crude oil inventories in the US for the week ending May 2 decreased by 2.032 million barrels, compared to the previous decrease of 2.696 million barrels and the expected decrease of 833,000 barrels.

Silver: This week, silver prices consolidated sideways. As the weekend approached, expectations rose that the US and the UK would announce a trade agreement, or at least reach a framework for one, leading to a sharp drop in gold prices. Silver prices followed suit and fell. After the Labour Day holiday, the SHFE silver-TD spot-futures price spread widened, and market sentiment turned cautious. In the Shanghai area, self pick-up tonne-grade national standard spot silver ingots were quoted at a premium of 5-6 yuan/kg against TD or a discount of 10 yuan/kg against the SHFE silver 2506 contract. Large-scale producers' spot silver ingots were quoted at a premium of +7-+8 yuan/kg against TD. Some suppliers stood firm on quotes and were reluctant to sell. As the weekend approached and silver prices weakened along with a narrowing spot-futures price spread, suppliers' willingness to sell increased, and market transactions improved significantly. Terminal consumption in March-April met expectations for the peak season. Production expectations for silver paste in May have not yet declined due to weaker PV installation orders in the second half of the year. Most companies indicated that consumption orders in May could sustain normal production levels, with a few mentioning the possibility of adjusting production plans by the end of May due to declining orders.

PV: This week, the average reference price of solar cell rear-side silver paste was 5,311-5,386 yuan/kg; the average reference price of solar cell front-side fingers was 8,001-8,114 yuan/kg; and the average reference price of solar cell front-side busbars was 7,951-8,064 yuan/kg.

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