Geopolitical developments show signs of easing, with U.S. President Donald Trump stating that negotiations with Iran are currently underway. Trump noted that the first phase of talks involves reopening the Strait of Hormuz, while the second phase focuses on denuclearization, adding that the strait could be reopened by August 4 at the latest. The negotiations, he said, are taking place at Iran's request and with support from Saudi Arabia, the UAE, Qatar, and other nations.

On the economic data front, the U.S. July ISM Manufacturing PMI surged to 55.6, its highest level since May 2022 and marking the seventh consecutive month of expansion. Key indicators, including production, new orders, and employment, all showed strength. However, the U.S. July S&P Global Manufacturing PMI final reading came in at 53.9, hitting a three-month low. Meanwhile, New York Fed President John Williams, a key figure at the central bank, stated that current monetary policy is "in a good place," with inflation expected to decline in the second half of the year. He emphasized that the Fed does not need to rush into adjusting interest rates but would "absolutely take action" if the economy deviates from expectations or if inflation fails to return to the 2% target.

In futures trading on August 3, 2026, the main Shanghai Gold (Au) contract opened at 882.06 yuan/gram and closed at 886.64 yuan/gram, down 0.19% from the previous session's close. Volume reached 41,087 lots, with open interest at 129,725 lots. During night trading, the main Au contract opened at 883.16 yuan/gram and closed at 882.12 yuan/gram, down 0.51% from the afternoon close. For silver, the main Shanghai Silver (Ag) contract opened at 14,108.00 yuan/kilogram and closed at 14,218.00 yuan/kilogram, down 0.32% from the prior close, with volume of 651,016 lots and open interest of 286,111 lots. In night trading, the main Ag contract opened at 14,066 yuan/kilogram and closed at 14,153 yuan/kilogram, down 0.46% from the afternoon close.

U.S. Treasury yields and spreads as of August 3, 2026: The 10-year yield closed at 4.75%, up 0.07% from the previous session, while the spread between the 10-year and 2-year yields stood at 0.47%, up 0.02%.

Shanghai Futures Exchange (SHFE) gold and silver positions and volume changes on August 3, 2026: For the Au2610 contract, long positions decreased by 6,849 lots from the prior day, while short positions fell by 3,839 lots. Total gold contract volume for the day was 240,777 lots, down 5.64% from the previous session. For the Ag2610 contract, long positions declined by 7,765 lots, and short positions dropped by 6,088 lots. Total silver contract volume was 819,796 lots, down 17.38% from the prior day.

Precious metals ETF holdings: Gold ETF holdings stood at 1,007.01 tons, down 0.86 tons from the previous session, while silver ETF holdings remained flat at 14,939 tons.

Precious metals arbitrage tracking: Spot-futures spreads on August 3, 2026 showed a domestic gold premium of -0.39 yuan/gram and a domestic silver premium of 95.83 yuan/kilogram. The gold-to-silver ratio on the SHFE was approximately 62.36, down 0.86% from the prior session, while the offshore gold-to-silver ratio stood at 70.20, up 0.34%.

Fundamentals: Shanghai Gold Exchange T+D market monitoring for August 3, 2026 shows gold trading volume of 29,266 kilograms, down 14.55% from the previous session, and silver trading volume of 196,534 kilograms, down 31.47%. Gold delivery volume reached 11,872 kilograms, while silver delivery volume stood at 48,450 kilograms.

Strategy: Gold is viewed cautiously bullish. The recent dovish signals from Fed officials may align with easing geopolitical tensions to create a supportive environment. Additionally, joint U.S.-Japan intervention in the yen-dollar exchange rate could be a positive factor for gold. As a result, gold prices are expected to maintain a cautiously strong pattern, with the Au2610 contract likely trading in a range of 870 yuan/gram to 920 yuan/gram. Silver is similarly cautiously bullish. The logic for silver mirrors that of gold, with prices expected to maintain a cautiously strong pattern. The Ag2610 contract is expected to trade in a range of 13,800 yuan/kilogram to 14,500 yuan/kilogram. Arbitrage and options strategies are recommended to be paused. Key risks include overseas liquidity risks and ongoing withdrawal of speculative positions.