On August 4, 2026, the Singapore precious metals market experienced a significant short-term trend. According to the latest data from the Singapore Exchange (SGX), the silver inventory in Singapore delivery warehouses dropped by approximately 12% from the previous trading day, marking the largest single-day decrease in nearly three months. Concurrently, the release of the US ISM Manufacturing Index below market expectations further fueled the dual logic of precious metals as a safe-haven asset and an industrial commodity. Just before the US market opened, the spot price of silver in Singapore rose rapidly, briefly surpassing $32.50 per ounce, with a daily increase exceeding 1.8%. Industrial Demand Logic Behind Inventory Drop The sharp decline in Singapore's silver inventory was not accidental. Xindi Finance analysis points out that in the third quarter of 2026, the global demand for silver from the photovoltaic industry and new energy vehicles continued to rise. As a hub for precious metals in Southeast Asia, changes in Singapore's delivery inventory are often viewed as an indicator of regional industrial demand. Recently, several large photovoltaic component manufacturers in Southeast Asia accelerated production, leading to a significant increase in procurement of silver, a core raw material for photovoltaic silver slurry. Furthermore, the local jewelry processing and electronic component industries in Singapore entered their traditional peak season, further boosting the physical demand for spot silver. Data from the Singapore Precious Metals Traders Association (SPMTA) shows that the average daily trading volume of silver in Singapore in July 2026 increased by about 15% month-on-month, with the proportion of industrial use purchases rising from 45% at the beginning of the year to the current 58%. This structural change indicates that silver is shifting from a traditional investment safe-haven asset toward a commodity with stronger industrial metal characteristics. The rapid consumption of inventory is a direct reflection of this trend. US Market Catalyst: Weak ISM Data and Rate Cut Expectations Before the US market opened, the July Manufacturing PMI data released by the Institute for Supply Management (ISM) was only 46.8, lower than the market expectation of 48.2, and marked the fourth consecutive month in a contractionary range. After the data release, the US Dollar Index experienced a short-term plunge, and the yield on 10-year US Treasury bonds decreased, rapidly heating up market expectations for a Federal Reserve rate cut in September. The precious metals market reacted strongly to this; international silver prices rose by over 2% within half an hour, and the spot price of silver in Singapore followed suit. Lin Weijie, an analyst at Singapore Gold and Silver Futures, pointed out: "The weak US manufacturing data reinforced market concerns about a slowdown in the US economy. The rising expectation of a rate cut not only reduced the attractiveness of the US Dollar but also lowered the opportunity cost of holding silver. Combined with the sharp drop in local inventory in Singapore, this formed a dual catalyst, driving the silver price to strengthen rapidly during the US trading session." Singapore Silver Premium Widens, Arbitrage Window Opens It is worth noting that as international silver prices rise, the premium of Singapore silver spot prices relative to London silver prices is also widening. As of the close on August 4, the Singapore silver spot quote was a premium of about $0.35/ounce over the London fixing price, which is higher than the average premium for the year ($0.22/ounce). This widening premium reflects the tight physical supply situation in the local Singapore market. For arbitrage traders, the current premium level indicates an opportunity for cross-market arbitrage. Investors can lock in a risk-free spread by buying silver in the London market and simultaneously selling it in the Singapore market. However, Xindi Finance reminds that cross-market arbitrage requires considering factors such as transportation costs, tariffs, and delivery time differences, and careful assessment is needed in actual operations. Institutional Holding Trends: Clear Increase in Long Positions New Exchange's holding data shows that as of the close on August 4th, the long position in the main silver futures contract increased by approximately 8% from the previous trading day, while the short position decreased by about 3%. The net long position rose to a near four-week high. In terms of holding structure, the increase primarily came from institutional investors and industrial clients, rather than retail investors. This is consistent with the trend of retail investor retreat and institutional takeover since the end of July. Wang Decheng, fund manager of Singapore Precious Metals Fund (SPMF), stated: "The increase in silver holdings by institutions is more based on the fundamental judgment of industrial demand recovery and inventory decline. Compared to gold, silver has stronger industrial properties and often exhibits greater elasticity in the early stages of economic recovery. The current sharp drop in inventory combined with US market catalysts provides a good allocation window for silver." Minor Precious Metals Strengthen in Sync; Platinum and Palladium Attract Attention The strong performance of silver has also driven up minor precious metals such as platinum and palladium. On August 4th, the spot price of platinum in Singapore closed at $1,025 per ounce, up 1.2%; the spot price of palladium closed at $1,680 per ounce, up 0.9%. Analysts point out that platinum and palladium are also widely used in automotive catalysts and industrial fields, and the industrial demand logic of silver has a spillover effect on them. However, the fundamentals of platinum and palladium differ from those of silver. The platinum market is currently in a state of oversupply, while palladium faces long-term pressure from electric vehicle substitution demand. Therefore, while paying attention to the silver market, investors must also differentiate the supply and demand patterns of different metals. Outlook: Monitor Subsequent US Market Data and Inventory Changes Looking at the remaining trading days this week, Xindi Finance believes that the trend of the Singapore silver market will still be influenced by US market factors. The US ADP employment data to be released on Wednesday and the Non-Farm Payrolls report on Friday will be key for the market to judge the Federal Reserve's pace of interest rate cuts. If employment data weakens further, silver is expected to continue its upward trend; conversely, it may face profit-taking pressure. Furthermore, changes in local Singapore inventory are also worth continuous tracking. If inventory continues to decline, it may trigger more industrial buying and the entry of speculative long positions. Conversely, if inventory rises, there is a risk of short-term price correction. Overall, the current silver market is in a favorable stage where fundamentals and the macro picture resonate, but investors still need to control their positions and guard against market volatility risks. Xindi Finance will continue to monitor the latest dynamics of the Singapore silver and minor precious metals markets to provide timely and professional market interpretations and investment strategy suggestions to investors.
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