Middle East Tensions Escalate, Coupled with Inflation Exceeding Expectations, Silver Prices Fall Under Pressure [SMM Daily Review]

Published: Jul 13, 2026 10:46

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[SMM Daily Commentary: Middle East Tensions Escalate and Inflation Exceeds Expectations, Silver Prices Fall Under Pressure] SMM, July 13 – Iran has closed the Strait of Hormuz, heightening geopolitical risks; the US Fed report shows accelerating inflation, strengthening rate hike expectations, and precious metals are under pressure. Spot market demand is sluggish, with transactions tending toward parity.

Today, SMM’s 10:00 am Ag (T+D) price from the gold exchange stood at 14,274 yuan/kg, with premiums quoted between TD-5 and +10 yuan/kg, averaging +2.5 yuan/kg.

On the macro front, the Middle East situation escalated sharply over the weekend as the Iranian Revolutionary Guard announced the closure of the Strait of Hormuz. The US Fed’s semiannual monetary policy report showed that previously strong inflation accelerated further in the spring, with headline PCE rising 4.1% YoY. Precious metals fell under the dual pressure of rising geopolitical risks and stronger rate hike expectations. Attention this week may turn to US CPI data for further market direction.

Spot market side, Monday’s trading atmosphere and quotations extended last Friday’s pattern. Overall demand was somewhat sluggish, with more sellers active, and downstream players mostly negotiated prices, with transactions generally near parity. Early session quotes in Shanghai were concentrated around TD parity to +10 yuan/kg. In Shenzhen, some standard-grade material circled around slight discounts to parity against TD. Low-priced cargoes continued to emerge in the market, with some banks also selling at the lower end. Today, the premiums against the most-traded SHFE 2608 contract were quoted at discounts of 30-15 yuan/kg.

Overall, the downward trend for precious metals remained intact, with escalating geopolitical conflicts and strong US economic data weighing again on the sector. Spot premiums stayed steady for another session, with deals closing near parity and demand still weak.

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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