Interest Rate Cut Bets Combined With PCE Data Release, Silver Prices Surged Sharply as Spot Premiums Declined [SMM Silver Market Weekly Review]

On the macro front, the latest US July PCE data (released on August 29) met expectations, further supporting monetary easing policies. At month-end, the CME FedWatch Tool indicated an 87% probability of a US Fed interest rate cut, up from 63% a month earlier. On September 1, gold prices challenged previous highs, boosting silver and other precious metals.

[Economic Data]

US August ISM Manufacturing PMI: 48.7, previous: 48, expected: 49
University of Michigan Consumer Sentiment Index Final for August: 58.2, previous: 58.6, expected: 58.6
US July Core PCE Price Index YoY: 2.9%, previous: 2.80%, expected: 2.90%

[Spot Market] In the silver spot market, downstream sentiment showed a fear of high prices after silver broke through its fluctuating range late last Friday and rose sharply this week. The spot-futures price spread between the most-traded SHFE silver 2510 contract and SGE TD narrowed to 20-30 yuan/kg, with traders and smelters actively selling. Regarding premiums and discounts, Shanghai-region national standard silver ingot warrant premiums to TD were lowered to near parity, while large-smelter ingot suppliers also lowered their TD premiums to 2-3 yuan/kg. Due to speculative sellers offering large discounts, transactions for national standard and large-smelter silver ingots at premium prices were relatively weak. After silver pulled back from highs on Thursday, market transactions improved noticeably compared to early in the week. The rapid price increase had raised alerts; although the medium and long-term fluctuating trend for silver remains strong, short-term upside is limited, and there is a risk of prices jumping initially and then pulling back.
PV: This week, the reference average price for solar cell rear-side silver paste was 6,070-6,347 yuan/kg; for solar cell front-side finger, it was 9,140-9,555 yuan/kg; and for solar cell front-side busbar, it was 9,090-9,505 yuan/kg.