Nonfarm Payrolls Disappointment Strengthens Interest Rate Cut Expectations, Silver Price Hits $41 Before Consolidating [SMM Silver Market Weekly Review]

On the macro front, the US August non-farm payrolls data continued to support the bullish trend in precious metals, with market expectations for the US Fed to announce an interest rate cut at its September 16-17 meeting continuing to build. After breaking through key technical levels, gold and silver prices tended to consolidate sideways. After London silver prices broke through the key technical level of $41/oz, medium and long-term, silver prices may continue to challenge higher targets amid a stronger gold market. In the short term, attention should be paid to the US CPI data on Thursday evening, which may affect the Fed's enthusiasm for interest rate cuts after September, thereby dragging down precious metal prices for a brief correction.

[Economic Data]

Bearish:

US EIA crude oil inventories for the week ending August 29 were 2.415 million barrels (previous: -2.392 million; expected: -2.031 million)

US EIA crude oil inventories for the week ending September 5 were 3.939 million barrels (previous: 241,500; expected: -1.04 million)

Bullish:

US seasonally adjusted non-farm payrolls for August were 22,000 (previous: 79,000; expected: 75,000)

US preliminary benchmark revision for non-farm payrolls in 2025 was -911,000 (previous: -598,000; expected: -700,000)

[Spot Market] In the silver spot market, downstream buyers remained cautious about purchasing at high prices amid the sideways consolidation of silver prices. At the beginning of the week, the spot-futures price spread between the most-traded SHFE silver 2510 contract and SGE T+D narrowed to 10-20 yuan/kg, and expanded slightly to 20-25 yuan/kg towards the weekend. In terms of premiums and discounts, premiums for national standard silver ingot warrants against SGE T+D in Shanghai remained near parity. Mid-week, some suppliers sold inventory at a discount of 2-0 yuan/kg against SGE T+D, while suppliers in Shenzhen quoted a discount of 37 yuan/kg against the SHFE silver 2512 futures contract. Large-scale silver ingot suppliers quoted relatively firm premiums of 3-5 yuan/kg against SGE T+D. This week, market transactions were mainly among traders or in preparation for physical delivery. Downstream rigid demand was limited, and stockpiling enthusiasm was poor. Expectations of rising social inventory may put pressure on the actual transaction prices of silver in the spot market.

PV silver paste: 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.