[Price Review]
Silver fluctuated upward this week, charting an independent trend with gains significantly outpacing gold. On the news front, Peru was hit by a sudden energy crisis and issued a national emergency decree; power rationing is expected to cause mine shutdowns, thereby affecting supply. As the world's 12th largest mining country, Peru holds 21.8% of global silver reserves, which ignited the silver rally. On the macro front, US April non-farm payrolls and CPI both exceeded expectations, with the inflation rebound reinforcing the US Fed's stance on delaying interest rate cuts, with probabilities of holding rates unchanged in June and July reaching 93.5% and 86.5%, respectively. Industrial demand side, the spot market remained weak; rising absolute silver prices continued to suppress downstream demand. Suppliers generally reported sluggish market transactions and weak buying sentiment, leading to low enthusiasm for offering quotes, a widening price spread between high and low quotes, and an overall tepid trading atmosphere in the spot market, with spot inventory continuing to accumulate. Gold/silver ratio, as of May 13, the LBMA gold/silver ratio fell to 54, hitting a new low since 2013.
[Key Data]
Bullish:
Peru was hit by a sudden nationwide energy crisis and declared a state of emergency lasting until year-end, with mine power usage restricted. If strict power rationing is enforced, silver production is expected to decline by 3%-10%, and the global supply-demand gap is expected to widen by 15%-30%.
US April non-farm payrolls data showed a continued divergence of "strong services, weak manufacturing," highlighting a stagflation pattern.
Bearish
US April CPI came in at 3.8% YoY and core CPI at 2.8% YoY, both exceeding expectations, reinforcing the US Fed's stance on delaying interest rate cuts.
US-Iran negotiations reached an impasse, with the US side fully rejecting Iran's proposal amid major core disagreements; shipping risks in the Strait of Hormuz persist.
Hawkish Warsh was officially confirmed as the next Fed Chairman, and multiple officials stated they do not rule out the possibility of resuming rate hikes.
[Recent Focus]
May 15: New Fed Chairman Warsh's first public speech.
May 16: US April retail sales, May New York Fed Manufacturing Index.
May 17: US initial jobless claims, April industrial production MoM.
May 20: US April core PCE price index.
[Price Forecast]
Silver is expected to see wild swings at elevated levels next week, with the core variables being the implementation of power rationing in Peru and progress in US-Iran negotiations. Amid the risk of prolonged US inflation, stagflation trades are poised to become the core narrative for the next round of precious metals rallies. If a de-escalation in geopolitical conflicts drives oil prices to pull back, it will provide favorable conditions for opening a monetary easing window after Warsh assumes the role of Fed Chairman. On the fundamentals side in China, downstream buying sentiment remained persistently weak. The continued rise in the absolute price of silver kept suppressing downstream demand, with heavy wait-and-see sentiment. Social inventory of spot silver ingots continued to accumulate, and the mainstream spot transaction discount in the market is expected to remain in the range of a 40-10 yuan/kg discount to the SGE TD price.
![Spot Market and China Inventory Brief (May 14, 2026)Spot Market and China Inventory Brief Review (May 14, 2026) [SMM Silver Market Weekly Review]](https://imgqn.smm.cn/usercenter/nQsOk20251217171736.jpg)
