1. Introduction: Silver T+D Is Not Priced “Casually”

In real trading, many people notice that the price of Silver T+D does not always match the international silver price exactly, and in some periods the spread can be quite obvious.

This often raises a question:

How is Silver T+D priced? Is it set domestically, or is it mainly driven by the international market?

The answer is: Silver T+D pricing is not determined by a single factor. It is the result of several forces working together:

• International silver prices
• Exchange rates
• Domestic supply and demand
• Capital flows
• Trading and delivery mechanisms

2. International Silver Price Is the Main Pricing Anchor

Silver is a highly globalized commodity, and its main pricing center is in the international market.

International silver prices are usually quoted as XAG/USD in USD per ounce, reflecting:

• Global supply and demand
• Macro environment
• Market sentiment

Although Silver T+D is traded domestically, its long-term trend still follows the international silver market.

Why?

Because:

1. Silver can flow between international and domestic markets
2. Arbitrage forces exist and help prices return to a reasonable range
3. International silver prices are the common reference for the global industrial and financial chain

So, international silver prices are the basic coordinate of Silver T+D pricing.

3. Exchange Rate Converts the International Price into a Domestic Price

Silver T+D is quoted in RMB per kilogram, while international silver is quoted in USD per ounce.

To convert between the two, you need the RMB/USD exchange rate.

Simplified formula:

Silver T+D theoretical price = International silver price × exchange rate × unit conversion factor

This means:

• Even if international silver prices stay unchanged
• Any change in the exchange rate can still move the RMB price of Silver T+D

So Silver T+D includes an implicit exchange-rate factor, reflecting both:

• Silver’s own price movement
• The strength or weakness of RMB versus USD

4. Domestic Supply, Demand, and Capital Structure Also Matter

Besides international prices and exchange rates, Silver T+D is also affected by domestic market conditions.

In the domestic market:

• Long and short capital balance affects short-term price
• Physical delivery demand affects tightness in the spot market
• Holidays and concentrated fund flows can create temporary deviations

When domestic buying is strong:

• Silver T+D may trade stronger than the converted international price

When selling pressure is heavy or liquidity is weak:

• Silver T+D may trade weaker

5. Deferred Delivery Fees Affect Price Indirectly

Silver T+D uses a deferred delivery mechanism, together with a deferred fee system.

Deferred fees do not directly set the price, but they affect holding costs and therefore change the behavior of long and short positions.

For example:

• If longs need to pay deferred fees, some may choose to close positions, which can suppress price gains
• If longs receive deferred fees, holding demand may rise, supporting prices

So the deferred fee system acts like a regulator, indirectly influencing price formation through trader behavior.

Conclusion

In summary, Silver T+D pricing is not determined by one market or one factor alone.

It is formed by the combined effect of:

• International silver prices
• RMB exchange rates
• Domestic supply and demand
• Fund flows
• Deferred delivery rules

It reflects both:

• The global silver market
• The domestic financial environment and trading system

Understanding this mechanism helps you interpret Silver T+D price movements more rationally and avoid mistaking short-term spreads for “abnormal pricing.”