From a macro perspective, the US Fed's Beige Book further confirmed the overall stagnation of economic activity and weak consumption. Fed officials intensively released dovish signals, with Governor Waller and San Francisco Fed President Daly both supporting an interest rate cut in December to address potential "non-linear deterioration" risks in the labour market. Coupled with the mild decline in the US core PPI and controllable inflation pressure, expectations for accommodative monetary policy were reinforced. The US dollar index was in the doldrums due to sluggish growth and looser policy, providing core support for precious metals. Meetings surrounding the Russia-Ukraine conflict are still under repeated discussion. As long as the Russia-Ukraine situation remains unresolved, the safe-haven premium for precious metals will not completely dissipate. This week, driven by macro tailwinds, the precious metals market performed strongly. Silver prices, supported by both macro factors and destocking narratives, rose more than gold. Market sentiment is in an exceptionally exuberant phase, but risks of overbought and oversold conditions still need to be monitored going forward.
[Economic Data]
Bullish: The US November ISM Manufacturing PMI came in at 48.2 (previous: 48.7, expected: 49). US November ADP employment change was -32,000 (previous: 47,000, expected: 10,000).
Bearish: US API crude oil stocks for the week ending November 28 were 2.48 million barrels (previous: -185.9). US EIA crude oil stocks for the week ending November 28 were 574,000 barrels (previous: 277.4, expected: -821,000 barrels).
[Spot Market] In the domestic silver spot market, silver prices rose consecutively and hit highs this week before pulling back under pressure. Towards the weekend, the TD-SHFE silver most-traded contract spot-futures price spread narrowed, and spot premiums saw a slight decrease. This week, mainstream quotations for national standard silver ingots in the Shanghai market were quoted at premiums against TD that decreased to 20-30 yuan/kg, or at around parity against the SHFE silver 2502 contract. Near the weekend, some suppliers of national standard silver ingots quoted at discounts of 10-5 yuan/kg against the SHFE silver 2502 contract. Quotations from large smelters' silver ingot suppliers remained relatively firm, still at premiums of 30-35 yuan/kg against TD, or at discounts of 5-0 yuan/kg against the SHFE silver 2502 contract during the week. Downstream sectors are gradually entering the off-season, and some smelters sold on rallies. The destocking trend for domestic silver ingot spot inventory slowed down. Spot circulating supply became more ample compared to last week. However, downstream buyers generally showed caution towards high prices, purchasing cautiously or demanding significant price negotiations. Some traders mentioned that increased pressure from purchasing and hedging at high silver prices led to a decline in willingness to purchase and build positions. Overall market transactions remained sluggish.
PV Silver Paste: This week, the reference average price for solar cell rear-side silver paste was 8,055-8,694 yuan/kg; for solar cell front-side finger, it was 12,117-13,076 yuan/kg; and for solar cell front-side busbar, it was 12,067-13,026 yuan/kg.
