The stark reality of the silver market downturn is hitting investors hard, with some facing losses running into the millions.

On June 10th, a silver wholesaler in Beijing using the pseudonym Zhang Qiang remarked, "Losing several hundred thousand yuan really isn't that much. In our circle, there are plenty of people with losses reaching seven figures. That kind of torment is indescribable."

Zhang Qiang disclosed that one of his clients invested over two million yuan in silver slab material back in February when the price was around 22 yuan per gram. By June 10th, that position was showing a paper loss of approximately 700,000 yuan.

Another Beijing-based silver wholesaler at the Tianya Jewelry City, using the pseudonym Bai Ming, expressed his distress to media, stating, "I'm anxious every day, my legs feel weak when I walk." He explained that the recent continuous decline in silver prices has left him unsettled. With a significant amount of physical inventory on hand, the current market conditions mean he faces losses of hundreds of thousands of yuan the moment he opens his eyes each day.

Amid global geopolitical turbulence causing fluctuations in gold and silver prices, some investors have been eager to buy at perceived lows for a quick profit. Around the Chinese New Year at the end of January this year, as silver prices surged, an employee named Xiao Wu at a gold and silver recycling shop in Zhengzhou encountered such a customer.

The customer was interested in a 15-kilogram silver brick available at the shop. Investment-grade silver bricks like this saw a sharp increase in sales at the time, often requiring pre-orders. The man purchased two bricks. At the prevailing price of 27 yuan per gram, the total cost exceeded 810,000 yuan.

During their conversation, Xiao Wu learned the customer was motivated by the rapid price rise, viewing it as an investment opportunity to sell later at a higher price for a fast profit.

Recently, with the pullback in silver prices, the value of one such silver brick has dropped to around 290,000 yuan. Xiao Wu mentioned that he contacted the customer a few days prior. The man lamented that due to the price decline, the two bricks are still sitting unsold in his possession. Over three months, he has lost nearly 240,000 yuan on the investment—an amount equivalent to the price of a decent car.

Zhan Dapeng, a nonferrous metals analyst at Everbright Futures, commented on the macroeconomic backdrop. He noted the密集 release of U.S. macroeconomic data, presenting a dual verification of economic resilience and inflationary pressures.

On the economic front, the ISM Manufacturing PMI rose to 54, its highest level since May 2022. The New Orders Index jumped significantly by 2.7 points to 56.8, marking its fifth consecutive month in expansion territory. However, the Prices Paid Index remained elevated at 82.1, staying in the high-risk zone above 80 for two consecutive months, indicating that energy cost pressures stemming from the Middle East conflict are being transmitted downstream.

More critically, U.S. non-farm payrolls added 172,000 jobs in May, far exceeding market expectations of 85,000, with April's data revised upward to 179,000. The unemployment rate held steady at 4.3%.

The resilience of the economy and labor market, combined with the context of persistently rebounding inflation, has rapidly compressed market expectations for Federal Reserve rate cuts. Conversely, expectations for rate hikes have intensified. Several Fed officials have adopted a hawkish tone, with Governor Waller supporting the removal of language indicating a bias toward easing from policy statements.

On the geopolitical front, U.S.-Iran negotiations have been characterized by extreme brinkmanship, introducing uncertainty into predictions for the Middle East situation. Although former President Trump repeatedly stated that both sides would reach a negotiation agreement, it has yet to materialize, adding to market volatility.

Zhan Dapeng believes the short-term core focus for precious metals lies in the upcoming Federal Reserve policy meeting in June. While the market has already priced in a near-zero probability of a Fed rate cut this year, with the likelihood of a hike instead steadily rising in market pricing, there is still hope to glean the Fed's stance on inflation characterization and future rate cut expectations from the meeting.

"For the outlook, we continue to lower our price expectations for gold in the first half of the year," Zhan stated. "We will watch for any abnormal 'buy the rumor, sell the news' type volatility around the Fed meeting and monitor the progress of U.S.-Iran negotiations. Silver, platinum, and palladium are broadly following gold lower, but with significantly higher volatility. If a U.S.-Iran ceasefire materially advances alongside confirmed stabilization in gold, silver, platinum, and palladium may see a corrective rebound. Until then, caution is advisable."