[Price Review] Silver prices surged this week, with the SGE TD price repeatedly hitting a historical high of over 30,000 yuan/kg. SHFE silver showed a rare backwardation structure, with the prices of SHFE silver 2602-2604 contracts exceeding 1,000 yuan/kg on Thursday. Due to tight domestic silver ingot supply, the SHFE near-month silver futures contract faces a squeeze risk. Geopolitically, former US President Trump claimed on social media that "a massive fleet is heading to Iran" and expressed hope that this would bring Iran "back to the negotiation table," escalating tensions in the Middle East and driving safe-haven flows into precious metals. Several institutions raised their 2026 gold price targets, boosting upward momentum for silver. Starting January 29, the SGE raised the trading margin for silver deferred contracts to 20% and the price limit to 19%. After a slight decline in trading enthusiasm, the SGE silver price underperformed the most-traded SHFE silver contract on Thursday. The LBMA gold/silver ratio edged down to 47x as of January 28. Short-term silver market saw intense tug-of-war between longs and shorts, but the near-term squeeze risk may lead to unexpected price movements, with the gold/silver ratio likely to decline further.
[Key Data]
Bearish: US EIA crude oil inventories for the week ending January 16 rose by 3.602 million barrels, above previous and expected values
US University of Michigan Consumer Sentiment Index final for January was 56.4, above previous and expected values
Bullish:
US API crude oil inventories for the week ending January 23 fell by 247,000 barrels, below previous and expected values
The US Fed kept the federal funds rate unchanged at 3.5%-3.75% after its two-day policy meeting on January 28, in line with market expectations.
Key data and macro events to watch next week include:
Although the January Fed meeting concluded, Chair Powell's remarks and the policy statement will continue to impact silver prices
US PPI year-on-year for December, US Nonfarm Payrolls report for January
US government shutdown risk, Middle East tensions, US-Iran relations, and other geopolitical uncertainties
[Price Forecast] Based on recent precious metals dynamics, the 2026 gold price target has been raised to $6,000/oz. Despite the sharp near-term rally, medium-to-long-term silver price expectations remain cautiously optimistic. Although domestic silver prices show a premium over overseas markets, trade channels have not indicated actual import expectations, and some smelters may adjust the pace of processing trade exports, slightly increasing domestic supply in the short term. However, the silver ingot supply deficit and high spot premiums are unlikely to ease soon. Despite repeated exchange margin adjustments and risk warnings, silver market enthusiasm has declined only modestly, and prices are expected to hold up well ahead of the Chinese New Year holiday.
