During Thursday's (August 6) Asian session, spot silver briefly surged to $62.87/oz, refreshing a seven-week high since July 7. Profit-taking and high-level selling emerged afterward, pulling prices back to consolidate near the $62 mark, extending the third consecutive daily gain. On Wednesday (August 5), the COMEX silver main contract jumped 3.34% to settle at $62.255/oz, while COMEX gold main contract rose 3.74% to $4,308/oz, both hitting stage highs and significantly boosting sentiment across the precious metals complex.
Two Engines: Hormuz Agreement and ADP Miss in Tandem
The core drivers of this silver rally come from a "dual-engine resonance" of geopolitical and macroeconomic factors:
- Geopolitical: Iran and Oman reached an agreement on temporary shipping routes through the Strait of Hormuz. Oil prices fell about 10% this week, significantly cooling energy-driven inflation concerns;
- Macro: U.S. July ADP private-sector employment rose by only 44,000, nearly halving from June's downwardly revised 95,000 and well below the expected 70,000, the smallest increase since January this year;
- Policy: Market bets on a 25-bp Fed rate hike in September fell from 67% to around 57%, and expectations for rate hikes this year narrowed from two to one.
Although the temporary shipping channel is expected to run for only two to four months, and Iran explicitly denied that the strait has fully reopened, the market has already priced in the prospect of restored energy supply, keeping fuel and natural gas prices on a downtrend. Weak employment data further reinforced the view of a cooling labor market. For silver, a zero-yield asset, falling rate-hike expectations directly lower holding costs, providing solid support for higher prices.
Industrial Demand: Surging Silver Ore Imports Reflect Solar Boom
Notably, this rally is not purely driven by macro narratives. Fundamentals show China's silver-bearing ore imports jumped 62.5% year-on-year to 219,000 tons in June, closely in line with the expansion of solar module and power grid construction. Silver's industrial role in photovoltaic paste, electronic components, and power infrastructure is providing a "second engine" for prices.
However, demand-side concerns cannot be ignored. SMM spot surveys show that after silver prices surged, downstream buying interest was significantly suppressed. Shanghai silver spot premiums/discounts narrowed sharply, with most trades concentrated near par and only scattered essential purchases. Trader quotes stayed high while volumes were thin. Concerns about slowing Chinese manufacturing demand have not fully faded—if macro drivers and industrial demand fail to resonate, the sustainability of the silver rally remains unproven.
Singapore View: Local Silver Market Tracks Rally, Funds Await Directional Signals
Singapore's local silver market has moved higher in tandem with international prices. The central quote for SGD-denominated spot silver has climbed to around SGD 80 per ounce alongside global prices. Inquiries from local traders and jewelry processors have rebounded, but willingness to chase highs remains cautious. From a positioning perspective, as SGX's "smart monitor" system for precious metals positions matures, local institutions and retail investors are demanding greater silver position transparency. Since late July, institutional positioning has steadily increased, with long-term funds showing clear signs of accumulating on dips. Short-term price swings are mainly driven by offshore funds during U.S. hours.
On the ratio front, the gold/silver ratio briefly broke above 85 on August 5 before slightly narrowing, showing silver's catch-up potential. Minor precious metals like platinum and palladium also posted their biggest one-day gains since February 2026 earlier this week, with NYMEX platinum main contract briefly hitting $1,746/oz and palladium jumping above $1,350. This shows funds rotating within the precious metals complex. For Singapore investors, the "linked trading" window between silver and platinum/palladium is opening.
Institutional Views and Outlook: Nonfarm Payrolls to Decide the "Endgame"
Institutions are divided on the outlook. TD Securities noted that current oil price volatility is more driven by speculative funds chasing headlines than by a real loosening of supply-demand fundamentals—the crude forward curve remains steep and the physical market is still tight. This means any reversal in geopolitical news could trigger a sharp rebound in oil prices and rekindle inflation concerns, leaving silver pulled between "inflation hedge" and "tightening pressure."
On policy, Fed Governor Cook reiterated that she is prepared to support further hikes if inflation fails to decline as expected, but stressed this stance is conditional. Kansas City Fed President Schmid also said further tightening may still be needed to bring inflation back to the 2% target. The lingering hawkish tone from Fed officials keeps uncertainty over silver's upside.
Technically, $62.87 is near-term key resistance. A solid break above $63 could see bulls targeting $65 or even the $70 area. Conversely, a surprisingly strong nonfarm payrolls report on Friday could push silver back to test the $60 round level for support. The market widely views tonight's jobless claims and Friday's payrolls as the "endgame variables" to verify the labor market cooling trend—and the key anchor for short-term direction in Singapore silver prices.
Conclusion
From $58 to $62, silver completed a sharp ~7% rally in just three trading days, illustrating the dense concentration of U.S.-session catalysts. Yet the more euphoric sentiment becomes, the more one must guard against reversal risk if data disappoints. For Singapore investors, before the payrolls land, controlling position size and watching U.S. data releases closely may be more important than chasing one-way moves.
