Today, SMM's 10:00 a.m. quotation for Ag(T+D) on the Gold Exchange was 15,428 yuan/kg, with the premium/discount range quoted at TD-10 to +5 yuan/kg and an average of -2.5 yuan/kg.
On the macro front, the Bank of Japan governor hinted at a September rate hike and facilitated a joint US-Japan yen-buying operation. A stronger yen may exert some pressure on the US dollar index. According to CME FedWatch, the probability of the Fed keeping rates unchanged through September stood at 48.8%, while that of a cumulative 25bp hike was 51.2%, as rate hike expectations cooled somewhat. Bullish factors currently dominate the precious metals market, and prices are expected to drift higher in the short term. Today, market attention will be on CPI data for guidance; a weaker-than-expected reading would further boost gold and silver prices.
On the spot market, the sustained rally in silver prices continued to weigh on downstream industrial demand, with most purchasers staying on the sidelines. The price spread narrowed today. Trader offers edged lower, and some suppliers chose to sell at concessions to move inventory. Early morning quotes in Shanghai were mainly between TD-5 and +5 yuan/kg. Reduced buying by banking institutions weakened the floor support, leaving only some rigid demand for acceptance transactions, with overall trading tending toward parity or slight discounts. In Shenzhen, some standard-grade sources were concentrated around slight discounts, and both buyers and sellers were cautious. Today, the market quoted premiums/discounts against the most-traded SHFE 2610 contract at a discount of 65-55 yuan/kg.
Overall, precious metals drifted higher today, driven by bullish factors and buying interest. On the spot market, after silver prices rose, selling pressure mounted and transactions gradually shifted to discounts.
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