PPI Cools More Than Expected but Silver Prices Lack Momentum for a Rebound; Rate Hike Expectations and Geopolitical Risks Continue to Weigh [SMM Daily Review]

Published: Jul 16, 2026 10:20

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[SMM Daily Review: PPI Cools More Than Expected but Silver Prices Lack Momentum for Rebound, with Rate Hike Expectations and Geopolitical Risks Continuing to Weigh] SMM, July 16 - US June PPI cooled more than expected, but US Fed officials maintained a hawkish tone. Compounded by escalating geopolitical conflicts, rate hike expectations persisted, and silver prices lacked momentum for a rebound. The spot market saw weak supply and demand, with premiums continuing to decline.

Today, SMM's Ag(T+D) price on the Shanghai Gold Exchange at 10:00 a.m. was 13,883 yuan/kg, with the premium/discount quotation range of TD-5 to +5 yuan/kg, averaging 0 yuan/kg.

On the macro front, US June PPI cooled more than expected after CPI, falling 0.3% MoM (the first negative reading since last year, compared with expectations of flat), and the YoY growth rate narrowed to 5.5% (prev. 6.5%). However, the rebound in precious metals remained weak and hesitant. Warsh maintained a hawkish tone, saying he was "not satisfied with any inflation gauge," while Williams and Cook also emphasized the need for inflation to return to the 2% target. Meanwhile, geopolitical conflicts continued to escalate: the US military launched a second wave of strikes against Iran, firing Hellfire missiles at oil tankers, and Trump leaned toward expanding military operations. Rate hike expectations have not fully faded, and the pattern of precious metals falling under pressure remains unchanged.

In the spot market, demand remained weak today. Suppliers slightly lowered their high-end offers, while downstream maintained a strong wait-and-see sentiment. Transactions tended towards parity to slight discounts. In Shanghai, morning quotes were mainly concentrated around TD parity to +5 yuan/kg. In Shenzhen, some standard-grade materials were quoted around TD-5 yuan/kg to parity, but overall trading was light. Suppliers were not actively selling, and the market showed a supply-demand weakness pattern. Today, the market's premium/discount quotation for the most-traded SHFE 2608 contract was a discount of 30 to 20 yuan/kg.

Overall, rate hike expectations have not dissipated, the rebound in precious metals is limited, and prices remain under pressure. Spot premium/discount quotations continue to move lower, with supply-demand weakness and sluggish trading.

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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