Rate Hike Expectations Weigh on Silver Prices, Consolidating; Spot Silver Parity Trading Cautious [SMM Daily Review]

Published: Jul 1, 2026 10:18

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[SMM Daily Commentary: Rate Hike Expectations Weigh on Silver Prices, Consolidation; Spot Silver Parity Transactions Cautious] SMM reported on July 1st: The US Fed's hawkish remarks pushed up rate hike expectations, and silver prices pulled back after a rapid rise. At the beginning of the month, spot silver transactions were sluggish, with downstream participants mainly in a wait-and-see mood. Quotations remained at parity to a small premium.

Today, SMM's Ag(T+D) quote on the Shanghai Gold Exchange at 10 am was 14,086 yuan/kg, with premiums quoted in a range from parity against TD to +20 yuan/kg, averaging +10 yuan/kg.

On the macro front, US Fed's Hammack made hawkish comments, lifting the market's implied probability of a September rate hike to 80%. Silver retreated after a rapid rise last night following a technical rebound the previous day, and remained in the doldrums in the short term. The market focus shifted to today’s US ADP employment data and tomorrow’s non-farm payrolls data for clearer directional guidance.

In the spot market, offers overall turned cautious at the start of the month, transaction follow-through was somewhat weak, consumption fell short of expectations, and downstream wait-and-see sentiment was strong. Morning quotes in Shanghai were mainly between parity against TD and +20 yuan/kg. Quotes for national standard silver ingots leaned to the high end, but actual buying interest was sluggish, with transactions mostly concluded between parity against TD and 15 yuan/kg. Low-priced cargoes in other regions have been mostly cleared, though a small amount remained; quotes in Shenzhen mostly hovered around parity to +5-10 yuan/kg. Premiums for the most-traded SHFE contract 2608 were quoted at a discount of 40 to 20 yuan/kg today.

Overall, the impact of Middle East tensions on the market is weakening, and trading logic is gradually shifting to US economic data expectations. The spot market direction remains unclear at the start of the month, with downstream staying on the sidelines and quotes holding in a range from parity to a small premium.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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