Today’s SMM 10 a.m. price for the gold exchange’s Ag (T+D) was 14,950 yuan/kg, with premium/discount quotes ranging from TD parity to +15 yuan/kg, averaging +7.5 yuan/kg.
On the macro front, cooling US inflation and weak nonfarm payrolls data pushed back expectations for US Fed rate hikes, and bearish sentiment temporarily bottomed out. However, a strong US dollar and high US Treasury yields continued to weigh on precious metals valuations, limiting the market’s upside room and leaving the overall pressure pattern intact.
Spot market, recent high-end premiums pulled back and consumer buying was subdued. In the second week of this month, shipments increased, suppliers’ high-end quotes showed some loosening, and the transaction center shifted toward the low end. In Shanghai, morning quotes were mainly concentrated from TD parity to +15 yuan/kg; some suppliers offered higher quotes, but follow-through buying was insufficient, with most deals at lower levels. In Shenzhen, quotes were mostly around TD parity to +8 yuan/kg, low-priced cargoes were scarce, and parity-priced cargoes were cleared quickly. Today, the market’s premium/discount quote against the most-traded SHFE contract 2608 was from a discount of 35 to 15 yuan/kg.
Overall, expectations for US Fed rate hikes continued to weigh on precious metals, and the short-term market mainly moved sideways. The high end of spot premiums edged down, overall transaction activity favored the lower end, and July presented a supply-demand weakness pattern.
