Interest rate cut implemented, silver price hits new historical high again, domestic spot silver market turns to discount trading [SMM Silver Market Weekly Review]

From a macro perspective, the US Fed interest rate cut expectations materialized this week, with the Fed announcing a 25-basis-point cut, lowering the target range for the federal funds rate to 3.50%-3.75%, in line with market expectations. As traders digested expectations of impending Fed rate cuts and tightening supply conditions, silver surged past $60/oz, reinforcing its historical trend of outperforming gold during easing cycles. With silver prices breaking above key levels and New York market inventories continuing to decline, overseas silver ETF holdings increased rapidly. Market speculation enthusiasm and liquidity became the main short-term drivers of silver prices. Although the medium and long-term outlook for silver remains bullish, risks of overbought and oversold conditions still warrant caution.

[Economic Data]

Bullish:

US September core PCE price index year-on-year: actual 2.8%, previous 2.9%, expected 2.9%.

US December one-year inflation rate expectations preliminary: actual 4.1%, previous 4.50%, expected 4.5%.

US API crude oil inventories for the week ending December 5: actual -4.779 million barrels, previous 248, expected -175.

Bearish:

US EIA crude oil inventories for the week ending December 5: actual -1.812 million barrels, previous 57.4, expected -231.

[Spot Market] In the domestic silver spot market, silver prices rose significantly this week, with increased availability of spot cargo in the domestic market. By the end of the week, spot silver ingot transactions against TD shifted to discounts. In the first half of the week, mainstream quotations for national standard silver ingots in the Shanghai market were at premiums of 0-10 yuan/kg against TD or at parity to a discount of 5-10 yuan/kg against the SHFE silver 2502 contract. Towards the weekend, suppliers generally found it very difficult to sell at parity. Mainstream transaction prices for national standard silver ingots in the Shanghai area widened to discounts of 10-15 yuan/kg against TD. Availability of spot cargo was more abundant in the Shenzhen area, with discounts for some silver ingot spot cargo against TD widening to 20-30 yuan/kg. Downstream users have entered the off-season. With the sharp rise in silver prices, procurement by industrial users has almost stalled. Some downstream enterprises closed their books early at year-end and are cautiously watching. Market transactions were mainly driven by traders and bank traders building positions. Some traders mentioned that due to excessive pressure from margin calls for hedging, the intention to sell at higher prices with increased discounts has grown.