US Treasury Bond Repurchase and Dollar Weakness Resonate, Silver Price Surges [SMM Daily Review]

Today, SMM's 10:00 am price for Ag (T+D) on the Shanghai Gold Exchange was 16,227 yuan/kg, with a premium range of TD-20 to 0 yuan/kg, and the weighted average premium was -6.74 yuan/kg.

On the macro front, the US Treasury announced that it would at least double the scale of long-term nominal Treasury bond repurchase operations, with the maximum single size at least $4 billion, effective from September 9, 2026. Following the announcement, the US bond market rebounded, and long-term yields pulled back notably; the US dollar index fell as much as 0.85% intraday, its biggest drop in three weeks, and hit the lowest level since mid-May. Both the US dollar and US bond yields pulled back, and together with fiscal concerns and Middle East geopolitical risks, they pushed precious metals to break higher.

Spot market side, the spot-futures price spread narrowed slightly today, and traders were strongly inclined to sell. Silver prices repeatedly pulled back and shot up; downstream wait-and-see sentiment was strong, consumption was weak and follow-up buying was insufficient, transaction prices further dropped, and the low end of discounts continued to widen. Morning quotes in Shanghai were mainly concentrated in TD-20 to +5 yuan/kg, parity quotes received almost no feedback, banks recently did not purchase to support the market, and at month-end, suppliers faced increased selling pressure, with all transactions at a discount. Today, the market's premium quote against the most-traded SHFE 2610 contract was a discount of 70-50 yuan/kg.

Overall, in the short term, precious metals broke strongly on the support of a weaker US dollar, falling US bond yields, fiscal concerns, and Middle East geopolitical risks, and are expected to hold up well in the short term. Spot market side, the transaction center further declined, and transactions were concentrated at a discount.