Nonfarm Payrolls Beat Expectations Pressuring While Central Bank Gold Buying Supports, Silver Prices Rise with Weak Spot Supply-Demand [SMM Daily Review]
Today, SMM's 10:00 a.m. price for Ag (T+D) on the Shanghai Gold Exchange is 12,770 yuan/kg, with the premium/discount range quoted at TD+5 to +20 yuan/kg and a weighted average price of 11.45 yuan/kg; against SHFE 2612, it is at a discount of 25-10 yuan/kg, and against the most-traded SHFE 2702 contract, at a discount of 60-45 yuan/kg.
Nội dung chi tiết
On the macro front, US October non-farm payrolls far exceeded expectations, surging by about 165,000, while the unemployment rate fell to 4.1%, reinforcing market expectations of further tightening by the US Fed and boosting bets on a December rate hike. Domestically, data from the State Administration of Foreign Exchange showed that as of end-October 2026, China's gold reserves stood at 78.3 million ounces, up from 77.47 million ounces at end-September, marking the 24th consecutive month of increases, with a MoM rise of 830,000 ounces (about 25.82 mt) in October. On the geopolitical front, Trump said that if negotiations make progress, it is "highly unlikely" the US will take large-scale military action against Iran again.
In the spot market, the basis fluctuated around 25-30 yuan/kg today. Higher silver prices weakened overall downstream buying sentiment, with most participants staying on the sidelines. As of last Friday, SHFE warrant inventory saw slight destocking, while trader inventories diverged, with top-tier traders holding low stocks and showing strong reluctance to sell. Morning quotes in Shanghai extended last week's firm price trend, with offers driven higher by sentiment, concentrated at a discount of 18-10 yuan/kg against SHFE 2612, presenting a pattern of weak supply and demand. However, actual end-use consumption was mediocre, and transactions showed no improvement.
Overall, the stronger-than-expected non-farm payrolls reinforced tightening expectations, but central bank gold buying provided support, and futures remained primarily priced for easing; on the spot side, higher silver prices curbed purchases, suppliers held prices firm and were reluctant to sell, but end-use consumption was weak and transactions showed no improvement.