Zhuochuang Information: Geopolitical situation and uncertainty in the interest rate path have intensified market volatility. Short-term advice: stay cautious

Since March, silver has shown a pattern of dipping and then rebounding. As of April 2, the domestic spot market price for #1 silver was 18,150 yuan per kilogram, a cumulative decrease of 25.7% since early March. The main driver is negative news sentiment, specifically the turmoil in the Middle East causing market expectations of tightening energy supplies, which in turn raised concerns about inflation. The Federal Reserve shifted from one rate cut this year to the possibility of rate hikes, putting pressure on silver. Later, Powell’s statement suggesting maintaining interest rates unchanged and signals of easing from both Iran and the U.S. somewhat corrected market expectations of rate cuts. Domestically, with the export tax rebate for photovoltaic modules approaching, downstream manufacturers increased production to compete for exports, but the export rush has basically ended. Coupled with weak new energy vehicle sales and price fluctuations weakening market investment demand, the overall fundamentals are under pressure. Moving forward, continued attention should be paid to the Middle East situation and its impact on the Federal Reserve’s rate path, as silver volatility may increase. It is recommended to invest cautiously based on one’s risk tolerance. (Zhuochuang Information)