Last week, silver prices experienced significant fluctuations. Overseas copper prices surged, and the market's liquidity was ample. The market continuously pushed up silver prices, which then plummeted starting Thursday.
From a macro perspective, the initial jobless claims in the US for the week ending May 18 were 215,000, lower than the previous value of 223,000 and the expected 220,000. Additionally, early Thursday morning, US Fed officials made relatively hawkish statements. The market was impacted by heavy bearish news, leading to a rapid exit of bulls and a celebration for the bears.
In the spot market, the surge in silver prices increased the margin pressure for companies holding inventory and hedging. Some companies began to sell off to recoup funds. Companies with less pressure maintained relatively stable spot prices but with discounts 1-2 yuan/kg lower than the prior week. Companies eager to sell off to recoup funds started offering larger discounts, leading to increasing discounts. Early in the week, silver prices were still on the rise, and some downstream companies placed orders. However, the US Fed's news on Thursday led to a sharp drop in silver prices. Due to the significant price fluctuations, some downstream companies, after placing orders on demand, began to adopt a wait-and-see approach in the face of falling prices. Early in the week, there were still transactions in the spot market, but the transactions weakened significantly in mid-week. By Friday, prices stabilized relatively. The significant price fluctuations inhibited demand for jewelry and other industries. However, the high prices encouraged companies with silver-containing scrap to sell actively, and some well-funded companies were actively purchasing raw materials.
