Silver prices rose rapidly on Friday, and the expected catch-up rally in silver prices was realized [SMM Analysis]

On Friday, the daily increase of the silver T+D contract on the domestic gold exchange was 1.99%, closing at 9,028 yuan/kg. The intraday high reached 9,070 yuan/kg, refreshing the previous high once again. However, at the same time, the increase in gold prices was limited. The strong US dollar index, the previous overbought rally in gold, and the new high in US stocks despite the impending tariff threat reduced the appeal of gold as a safe-haven asset. Some traders began to trade on the expectation of silver prices catching up with the rally.

This round of silver price rally ended its correction phase, with the significant increase mainly driven by macro market news. On Thursday evening, US President Trump prepared to impose widespread tariffs. The impact of Trump's proposed 50% tariff on copper pushed US copper prices to historical highs, reigniting market risk-aversion sentiment and leading to a synchronous rebound in gold and silver prices. Regarding interest rates, the minutes from the US Fed's June meeting showed that officials had divergent views on interest rate cuts, with most preferring to wait and see. Trump continued to pressure the US Fed to cut interest rates, maintaining a medium and long-term bullish trend for precious metals. Additionally, on Friday (July 10th), the silver 1-month lease rate surged to 4.5464%. The COMEX inventory trend, which had been increasing in H1, stabilized, and it is still necessary to closely monitor the movements of speculative funds. Caution is needed regarding the risk of overseas soft squeeze triggered by overheated long positions affecting domestic prices.

Although Trump's latest tariff measures have sparked investor demand for safe-haven assets, the current market's sensitivity to tariffs has decreased. The strong performance of silver prices is more related to the demand for catching up with the rally and the bullish sentiment due to silver prices being at a low level. However, given the strong uncertainties before the US tariff implementation deadline, risk sentiment may fluctuate. In the short term, it is still necessary to be cautious about the risks of overbought and oversold conditions. But in the medium and long term, it may be difficult to change the fluctuating trend of precious metals holding up well.

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