Silver ingot market premiums remained at a slight discount this week. Spot premiums edged down WoW. The rising absolute price of silver continued to suppress downstream demand, buying sentiment remained weak, and social inventory of spot silver ingots continued to accumulate.

[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.

At the start of the year, there was plenty of excitement around silver. The precious metal was soaring and reaching record highs along the way. However, it has declined from the highs it reached in January.

The silver price’s blistering rally came to an abrupt halt on Friday as XAG/USD collapsed by almost 30%, briefly plunging from Thursday’s record high above $120 to near $83.

On Thursday (June 5), spot silver prices surged rapidly after entering the European session, reaching a high of $35.82 per ounce, a level last seen in February 2012. Monthly chart of spot silver prices Specific market data showed that spot silver began to accelerate its upward climb around 15:00 Beijing time, rising from $34.44 to $35.82 within two and a half hours, with an intraday gain exceeding 3%. Year-to-date, silver prices have surged by over 23%. One-minute chart of spot silver prices In comparison, gold's gains were relatively mild. Spot gold rebounded by approximately 20% in the European session, currently trading at $3,385.74 per ounce, with an intraday gain of around 0.34%. Analysts believe that amidst growing global economic and political uncertainties, precious metal prices, including silver, are being supported by safe-haven funds. The previous day, the US raised tariffs on imported steel, aluminum, and their derivative products from 25% to 50%. The market is concerned that the US may adopt similar trade protection measures on metals such as silver, thereby boosting safe-haven and substitute demand for silver. Goldman Sachs futures trader Robert Quinn stated that the news of steel and aluminum tariffs triggered significant long position building in the silver futures market. Analysts say that the trade war initiated by Trump has sparked concerns about a recession in the US and global economies, and due to the unpredictability of tariff policies announced by Washington, precious metals such as gold and silver have been regarded as the most favored safe-haven assets. Two days ago, the Organisation for Economic Co-operation and Development (OECD) lowered its forecast for the US economic growth rate this year from 2.2% to 1.6%. The OECD report pointed out that even with some tariff measures suspended, the current tariff levels in the US are the highest since World War II. The OECD report also forecasts global GDP growth of 2.9% for this year and next. Previous forecasts were 3.1% for this year and 3% for next year. The report mentioned that if factors such as rising trade barriers persist, growth prospects will be significantly negatively impacted. Yesterday, data released by ADP showed that private sector employment in the US increased by only 37,000 in May, the lowest level since April 2023. After the data was released, Trump quickly posted urging Fed Chairman Powell to "cut interest rates now." Later that day, the US May Services PMI released by ISM unexpectedly fell below the 50 mark to 49.9, the first time in nearly a year. The report also presented typical "stagflation" characteristics: business activity and new orders both plummeted, while the prices paid index surged to a 30-month high. Affected by unfavorable data, market expectations for a US Fed interest rate cut pushed the US dollar index below the 99 mark. Ole Hansen, head of commodity strategy at Saxo Bank, said, "Gold, and especially silver, have broken through key technical barriers, with the most immediate catalyst being the sharp decline in the US dollar." Hansen added that, at a deeper level, the resurgence of geopolitical risks and the rekindling of trade war concerns are also fueling the bullish momentum across the precious metals market. Earlier this week, Robert Kiyosaki, author of "Rich Dad Poor Dad," posted on social media, "As I predicted in my 2013 book 'Rich Dad's Prophecy,' the biggest crisis in history is coming." "The best deal now is silver. By 2025, the price of silver could triple," Kiyosaki specifically mentioned. "Tomorrow, I'm going to my local gold and silver dealer to exchange 'fake money' for real silver."

On Tuesday, Trump showed signs of softening his signature tariff policy, and news that the tariff war between China and the U.S. would soon cool down led to a correction in the precious metals market today. The price of gold ended its consecutive upward trend, and the price of silver also weakened. In the spot market, according to SMM, as the month-end approaches, the mainstream quotations for spot silver cargo in the domestic market remain at a premium, with the mainstream quotations for standard silver ingots in Shanghai at TD+3 to +5 yuan/kg for rigid demand transactions.

【SMM Flash News】On Tuesday, Trump showed signs of easing his signature tariff policies, and news that the tariff war between China and the U.S. would soon cool down led to a correction in the precious metals market today. The price of gold ended its consecutive upward trend, and the price of silver also weakened. In the spot market, according to SMM, as the month-end approaches, the mainstream quotations for spot silver cargo in the domestic market remain at a premium, with the mainstream quotations for standard silver ingots in Shanghai at TD+3 to +5 yuan/kg for rigid demand transactions.

[SMM Daily Review: Silver Prices Rose Slightly on February 6] The SMM 1# Silver ex-factory reference average price in the morning was 8,061 yuan/kg, an increase of 16 yuan/kg compared to yesterday, with a rise of 0.2%.

[SMM Analysis: US Tariff Hike Confirmed? Silver Continues to Surge] On February 13 local time, US President Trump announced that he had decided to impose "reciprocal tariffs," meaning that the US and its trading partners would impose equal tariff rates on each other. He is also considering imposing additional tariffs on countries using the VAT system. Meanwhile, Fed Chairman Jerome Powell stated that interest rates would take Trump's tariff hike into account. As a result, the market is concerned about a potential US Fed interest rate cut, leading to early trading on bullish sentiment.

[SMM Daily Review: Silver Prices Rose Slightly on February 6] The SMM 1# Silver ex-factory reference average price in the morning was 8,061 yuan/kg, an increase of 16 yuan/kg compared to yesterday, with a rise of 0.2%.