The following article comes from Understanding the Sutra, written by Wu Danlu and Wang Qingyan

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Recently, international gold prices have continued to rise

hit record highs

同为“贵金属家族”的silver

Recently, the price boom model has also been launched

The trend is even stronger than gold!

Data shows that year-to-date

spot silver price

Has increased by more than 16%

The increase exceeded gold

** **

At a silver jewelry wholesale market in Yuyuan, Shanghai, the reporter learned that in recent times, whether it is silver bars and silver coins for investment, or decorative ancient silver bracelets and earrings, they have all been sought after by consumers.

Chen Yunlin, sales manager of a jewelry company in Shanghai:“投资属性的银条或银板原材料方面的采购量有大幅增加，目前店里银条已经基本售罄。 ”

The passenger flow and sales of many stores have increased significantly, and the price of spot silver has also increased from about 5.4 yuan per gram in early March to about 6.8 yuan per gram, an increase of more than 20%.

Shao Yongjiang, head of a jewelry plaza in Shanghai: “这段时间以来，我们广场的客流比之前有明显的增长，增长幅度在20%至30%左右，消费者对银饰品的兴趣程度在不断提升。 ”

** **

Silver has also become a popular commodity

This round of rapid rise in silver prices began in March. Overseas, in early March, the COMEX silver futures contract listed on the New York Mercantile Exchange was still in the US$22/ounce range, and had risen above US$28/ounce in the morning of April 9, the first time since June 2021.

Domestically, the price of the main contract for Shanghai Bank futures was 5850 yuan/kg at the beginning of March, but the intraday high rose to 7284 yuan/kg on April 9, a record high that was constantly being refreshed. The surge in futures prices also drove up spot silver prices. According to Rongtongjin's real-time quotation, as of press time, the domestic silver sales price has exceeded 6.93 yuan/gram, approaching the 7 yuan mark.

“去年这个时候，白银还是4块多（每克）。”一位深圳水贝黄金市场的银饰经营者告诉记者，由于3月份银价涨势太快， The source manufacturer offers almost one price a day, and sometimes even loses money when they get the goods in the morning and in the afternoon. 。为了保证经营，店家已经对产品进行了调价，但因为白银总体价格远低于黄金，所以白银饰品涨价并不会过于夸张。

However, the investment value of silver is still optimistic for consumers. Ms. Lin told reporters that recently, more and more customers have consulted and ordered silver plates, silver bricks and silver bars. In the past, large silver plates were mostly used as raw materials for jewelry processing, but now they are also being sold directly as investment products.

Silver jewelry market. Picture of Xinhua Agency

Multiple factors have driven up gold and silver prices

Behind the rise and rise of silver, there is also gold that continues to refresh historical prices. Domestically, the benchmark gold price on the Shanghai Gold Exchange reached 553.70 yuan/gram on April 8. Internationally, the closing price of COMEX gold futures reached 2,358.4 US dollars/ounce on April 8, and the price of gold has repeatedly hit new highs.

The accelerated rise in gold and silver prices is driven by multiple factors. Market analysts interpret this round of precious metals fluctuations as the product of the combined influence of factors such as the Federal Reserve's expectation of interest rate cuts, large purchases of gold by central banks of many countries, increased uncertainty in the US election, and geopolitical risk aversion.

Tao Jinfeng, chief consultant of Guotai Junan Futures Research Institute, said that market expectations for the Federal Reserve to cut interest rates are one of the main reasons why precious metal prices have been rising. According to historical laws, the Federal Reserve's interest rate cut may trigger an increase in the supply of the US dollar and a depreciation of the US dollar. Precious metals will welcome more demand due to their certain monetary attributes and safe-haven attributes.

In fact, a series of key economic data in the United States have been released recently, and there is constant controversy over when the Federal Reserve will cut interest rates. On March 12, the U.S. consumer price (CPI) index for February was released, with a year-on-year increase of 3.2%, slightly exceeding previous market expectations. On April 5, the United States released March employment data. Non-agricultural employment increased by 303,000, the largest increase since May 2023. Economic macro data is strong, and the market expects that the Federal Reserve's interest rate cut may be postponed to July or September.

Generally speaking, the possibility of the Federal Reserve releasing hawkish signals or cutting interest rates becomes less likely, the US dollar will continue to remain strong and the price of precious metals will be bearish. However, judging from the current market reaction, the precious metals and commodity futures markets are highly enthusiastic and ignore the Fed's hawkish signal.

Overall, the trend of the Federal Reserve's interest rate cuts will not change. Although there are differences in the market, expectations for interest rate cuts are still strong. "Market expectations may not be fulfilled, but they will affect financial trading behavior and thus the price of gold." Tao Jinfeng said.

In addition, increasing global economic uncertainty has also intensified people's safe-haven demand for precious metals. The South China Futures Research News pointed out that although the risk of higher inflation has weakened the Federal Reserve's expectation of cutting interest rates to a certain extent, it has also raised funds 'expectations for gold's anti-inflation properties. At the same time, due to concerns about the bursting of the financial market bubble under the Federal Reserve's high interest rates, gold's hedging and hedging properties have once again received attention.

A report from the World Gold Council showed that gold purchases by global central banks increased by 19 tons in February, the ninth consecutive month of growth. Since late March, the net inflow of international silver ETF positions has been obvious. As of April 5, the silver holdings of iShares Silver ETF, the world's largest silver ETF product, were 13,728.48 tons, with a cumulative net inflow of 537.93 tons within a week.

In addition, unlike gold, industrial demand for silver is rising rapidly. A report released by the World Silver Council at the beginning of the year predicted that global silver consumption will reach 1.28 billion ounces in 2024, the second highest level in history. The main reason is the significant increase in industrial consumption. As a relatively affordable high-performance conductive material, silver is widely used in photovoltaics, electronic component manufacturing, battery manufacturing and other fields. Some analysts predict that the high power consumption of the artificial intelligence industry will promote the renewal of power-side equipment, which will further stimulate industrial demand for silver.

High investments must be cautious

The logic of the rise is similar, so when gold prices rise to highs, silver also bears part of the spillover demand from the rise in gold prices. "Gold is too expensive now, and many people are beginning to think that silver jewelry is more cost-effective." Ms. Lin told reporters.

But she also said that the more the price rises, the more counterfeit and inferior products there will be on the market, and consumers should pay attention to screening them. Some counterfeit goods even issue certificates with steel seals that are not easy to identify. "The price of silver jewelry consists of raw material prices and processing fees. If the price of jewelry is cheaper than the price of raw materials, there is a high probability that it is fake." Ms. Lin reminded that when purchasing, customers should proactively check real-time gold and silver prices to avoid purchasing products below the market price.

Looking to the market outlook, Tao Jinfeng said that in the next one to two quarters, if the inflation situation in the United States is difficult to improve, the market will delay the Fed's future interest rate cut, which will curb the rise in precious metals prices; if the Fed's inflation continues to fall in the next one to two quarters, the Fed's interest rate cut may be advanced, which will help the price of precious metals rise.

Tao Jinfeng of Guotai Junan Futures also warned that when the US dollar rebounds, silver falls more rapidly than gold, and we need to be vigilant about the sharp fluctuations in silver prices caused by the short-term US dollar rebound. "Currently, precious metal prices have reached historical highs. With the Federal Reserve's decisions and increasing global economic uncertainty, the overall investment risk is increasing. Therefore, investors should not over-chase and blindly participate. They should pay attention to positions and management of funds." Tao Jinfeng said.