Silver

The US dollar weakened after President Joe Biden announced his withdrawal from the presidential race, prompting investors to reassess their expectations.

Anticipated Federal Reserve interest rate cuts in September have added further pressure on the US dollar. Consequently, silver prices have stabilized as investors view silver as a safe-haven asset amid the uncertainty.

Looking at the fundamentals, China's economic slowdown raises concerns about silver demand. This slowdown is attributed to weak consumer spending and a prolonged slump in the real estate market. China, as a major user of silver in electronics, solar panels, and automotive parts, may see its economic difficulties negatively impact silver demand and prices.

Chinese policymakers are intensifying efforts to boost confidence and stimulate the economy. Recently, the People's Bank of China (PBoC) cut the 7-day reverse repo rate by 10 basis points to 1.7%. Following this action, China also reduced the 1-year loan prime rate (LPR) to 3.35% from 3.45%, and the 5-year LPR to 3.85% from 3.95%.

A report from Heraeus indicates that Nokia reported an 18% year-on-year sales decline in Q2 2024 – the lowest quarterly sales since 2015. This was due to the slow rollout of 5G in India and North America, although sales also declined in other regions. Similarly, Nokia’s competitor Ericsson reported weak Q2 results last week with a 7% year-on-year decline, although its performance exceeded market expectations due to contract deliveries in North America.

Both companies have experienced reduced 5G investments over the past few years due to macroeconomic uncertainties affecting network investment and consumer demand.

Silver is expected to be widely used in 5G-required infrastructure and 5G-enabled hardware applications. In 2023, the electronics and electrical sectors (excluding solar PV) consumed 209 million ounces of silver. The aforementioned continuous sales declines could lead to a delay in 5G-triggered growth in the electronics sector and slow growth in silver consumption in non-PV sectors.

Silver September Futures rebounded. The settlement price on July 22 was $29.321 per troy ounce, up 0.08% compared to the previous week's closing session.

Platinum

Anglo American Platinum (AAP) reported on Thursday the production of 554 thousand ounces of refined platinum in Q1, a 13% increase compared to the same period last year. The increase in platinum production, despite a 2% year-on-year decrease in own-mined PGM production, indicates that AAP has been able to reduce its inventory levels.

Additionally, the power cut situation in South Africa has significantly eased this year. The continued release of platinum from reserves will bring additional supply to the market.

The price of Platinum October Futures extended its decline. The settlement price on July 22 was $956.6 per troy ounce, down 1.78% compared to the previous week's closing session.

Copper

The price of Copper September Futures marked a streak of six consecutive losing sessions. The settlement price on July 22 was nearly $4.2 per pound, down nearly 1% from the previous week's session.

Source: Heraeus, Fxempire