Everbright Futures 0624 Hotspot Tracking: Silver Prices Hit New Lows of the Year Amid Disturbance from Rate Hike Expectations

On Wednesday, both domestic and international silver prices continued to fall, with Shanghai silver dropping over 4% intraday, reaching a new low for the year. According to data released on Tuesday night, the U.S. June preliminary Composite PMI rose to 52.2, higher than the previous value of 51.5 and the expected 52.1, marking a five-month high. Both the U.S. June preliminary Manufacturing PMI and Services PMI exceeded expectations and previous values, indicating that U.S. business activity continues to expand. The U.S. June Manufacturing PMI rose to 55.7, the highest since May 2022. Subcomponents show both production and new orders rebounded simultaneously, further alleviating concerns of a hard landing for the U.S. economy. The probability of a Federal Reserve rate hike in September is now priced above 50%, pushing the U.S. dollar index higher and pressuring silver prices.

On the geopolitical front, Trump stated that Iran has agreed to keep the Strait of Hormuz open and has accepted "the highest level" of inspections, which means that Middle East tensions are still evolving towards de-escalation, but the marginal boost to precious metals is weakening. Looking ahead, this Thursday night will see the release of the U.S. May PCE data and the final Q1 GDP. Markets should watch for economic data trends and inflation performance; if expectations for further Fed rate hikes intensify, silver prices may continue to test lower levels in the short term.

Source: Wind, Everbright Futures Research Institute

Author: Shi Yueming

Professional license: F03097365

Trading advisory qualification: Z0017563

Editor: Zhu Henan