US-Iran peace talk expectations heat up, silver prices fluctuate mildly [SMM Daily Review]

Today, SMM’s 10:00 a.m. price for the Shanghai Gold Exchange Ag (T+D) was 16,177 yuan/kg, with the premium/discount range quoted at TD -5 to +10 yuan/kg and a weighted average price of 1.59 yuan/kg.

On the macro front, Trump said US officials held a three-hour meeting with Iran, that the talks were productive, that another meeting would be arranged soon, and that he believed a deal could be reached after the midterm elections. Iran confirmed the meeting with the US and put forward conditions for reopening the Strait of Hormuz, including lifting the maritime blockade, unfreezing Iranian assets, and ending the war on all fronts. Rising expectations for US-Iran peace talks pushed precious metals slowly higher.

In the spot market, this week was driven overall by stockpiling demand ahead of the double holiday, with downstream consumption recovering somewhat and transactions improving. Early in the week, there were many orders and shipments, but as silver prices edged up, stockpiling orders were closed out and exited the market. Mid-week inquiries were relatively weak, the spot-futures price spread narrowed, and market quotes were concentrated from parity against TD to a small premium, with transactions weakening. In the Shanghai area, morning quotes against the most-traded SHFE 2610 contract were at a discount of 25-20 yuan/kg, and downstream buyers preferred negotiated deals, pushing prices down to a discount against TD. Today, the quoted price spread in the market was relatively small, and overall trading sentiment weakened compared with yesterday.

Overall, this week’s rate-hike sentiment gradually faded, and combined with easing US-Iran tensions, gold and silver prices consolidated mildly. Today’s transactions were concentrated near parity for Shanghai Gold Exchange Ag (T+D).