Powell's Dovish Comments Ignite Interest Rate Cut Expectations Silver Prices Fluctuate at Highs [SMM Weekly Silver Market Review]

On the macro front, Fed Chairman Powell hinted at a high probability of an interest rate cut in September at the Jackson Hole Global Central Bank Conference late last Friday, rekindling bullish sentiment in precious metals. Additionally, according to foreign media reports, the US government is set to include silver in the draft list of critical minerals. This time, six minerals (copper, potash, silicon, silver, lead, and rhenium) have been proposed for inclusion, marking the most significant adjustment since the list was first released in 2018. The US core PCE for July, scheduled to be released on Friday (August 30), is currently expected by consensus to see its YoY growth rate pull back to around 3.0%. If this expectation is met, it will solidify the logic of interest rate cut trades.

[Economic Data]

Bullish Factors:
US EIA crude oil inventory for the week ending August 22: -2.392 million barrels, previous: -6.014 million barrels, expected: -1.863 million barrels
Bearish Factors:
Eurozone industrial sentiment index for August: released value: -10.3, previous: -10.5, expected: -10

[Spot Market] In the silver spot market, silver prices fluctuated at highs early in the week after rebounding amid dovish remarks from the Fed Chairman and a weakening US dollar. This week, the spot-futures price spread between the most-traded SHFE silver 2510 contract and the TD contract widened to 25-35 yuan/kg. Traders actively purchased and built positions, but downstream players generally remained on the sidelines. As month-end approached, some suppliers suspended quoting prices, and market transactions appeared sluggish. Regarding premiums and discounts, the premium quote for Shanghai-area national standard silver ingot warrants against the TD contract rose to 4-5 yuan/kg or a discount of 25-28 yuan/kg against the SHFE lead 2510 contract. Suppliers of silver ingots from major producers quoted premiums of 5-7 yuan/kg against the TD contract, but transactions at high premiums remained thin. After the spot-futures price spread narrowed on Thursday, traders' intentions to sell increased. However, following the strengthening of silver prices, downstream end-users generally remained on the sidelines. Overall consumption remained stable, and trading activity in the spot market appeared slightly sluggish.

PV: This week, the reference average price for solar cell rear-side silver paste ranged from 5,967 to 6,053 yuan/kg; the reference average price for solar cell front-side finger ranged from 8,985 to 9,114 yuan/kg; and the reference average price for solar cell front-side busbar ranged from 8,935 to 9,064 yuan/kg.