Precious Metals Continue Strong but Resistance Gradually Emerges; Spot Transactions Remain at Discount [SMM Daily Review]

Today, SMM's 10:00 fixing price for Au (T+D) on the Shanghai Gold Exchange was 16,741 yuan/kg, with the premium/discount range quoted at TD-10 to 0 yuan/kg, and the weighted average price at -7.24 yuan/kg.

On the macro front, US Treasury yields edged lower as the market focused on potential operations by Bessent to use the trillion-dollar Treasury General Account for US Treasury buybacks, which, if implemented, could stabilize long-term rates. Yesterday, the A-share precious metals sector strengthened against the market trend, with spot gold briefly surging above $4,680 to hit a more than three-month high. Silver consolidated higher, but its performance was relatively weaker than gold. The US dollar index rose 0.15%, briefly returning above 99 during the session, weighing on dollar-denominated precious metals. The US Treasury buyback narrative remains weak in terms of sustainability, and the upside for precious metals still faces technical resistance.

In the spot market, today's quotes were concentrated at a discount of TD-10 yuan/kg to parity. Toward month-end, some refineries had a higher willingness to sell, leading to a temporary narrowing of the spot-futures price spread. Traders became more willing to offer quotes, resulting in fairly strong overall transaction volume, though downstream buyers negotiated transactions mostly at lower end of the price range. In the Shanghai region, morning quotes mainly ranged from TD-10 yuan/kg to parity, with trades concentrated near TD-10 yuan/kg. Bank institutions also maintained a slight discount in their purchase prices. In the Shenzhen region, trades were generally at a slight discount. Today, the market's premium/discount quotes for the SHFE most-traded contract 2610 ranged from a discount of 60 to 50 yuan/kg.

Overall, the precious metals futures face possible technical corrections in the short term, as macro drivers have weakened. In the spot market, downstream buyers are cautious due to fear of high prices, while suppliers are offering discounts to sell, keeping trades at a discount.