Rate Hike Expectations Continue to Pressure Silver Prices, Spot Silver Transactions Maintain Parity [SMM Daily Comment]

Today, as of 10:00 AM, SMM’s reference price for Shanghai Gold Exchange Ag (T+D) was 13,739 yuan/kg, with the premium/discount range quoted at TD -5 to +5 yuan/kg, averaging 0 yuan/kg.

On the macro front, US employment data continued to show resilience, inflation risks have not yet subsided, market expectations for rate hikes remained elevated, investment funds have yet to return, and gold and silver were under pressure in the short term. This week, attention could turn to potential market disturbances from the ECB interest rate decision.

In the spot market, demand remained sluggish today, the consumer market lacked momentum, and the summer off-season effect continued to materialize. Silver ingot deals were concluded near parity, suppliers held back from selling with strong sentiment, and downstream buyers mostly sought bargains. The overall supply-demand stalemate has persisted for a week. Morning quotes in the Shanghai area mainly centered around TD parity to +5 yuan/kg, with some rigid-demand orders providing a floor for transactions, while suppliers showed low willingness to quote at discounts. In the Shenzhen area, some national-standard cargoes were concentrated around TD -5 yuan/kg to parity, with overall thin dealings; although low-priced cargoes existed in the market, their impact was limited. Today, the premium/discount quotation against SHFE 2608 was at a discount of 30–20 yuan/kg.

On the whole, the main theme of precious metals falling under pressure remained unchanged. Recently, the substantial climb in US bond yields has, to some extent, replaced the market impact of actual rate hikes, but subsequent policy signals from the US Fed still warrant close monitoring. Spot premiums/discounts were traded near parity, the tug-of-war between sellers and buyers continued, and transactions stayed subdued.