Geopolitical dynamics have shifted once again. US President Trump stated that there are currently no talks or dialogue with Iran, and no such plans exist for the future. The US maritime blockade on Iran continues to be fully and effectively enforced. Meanwhile, Iranian Parliament Speaker Qalibaf declared that the Strait of Hormuz will not reopen until the US lifts the freeze on Iranian assets, removes oil sanctions, halts all military threats and actions across all fronts, and meets other conditions outlined in the memorandum of understanding. Additionally, the UAE Foreign Ministry announced it has suspended all trade, commercial, and financial transactions with Iran due to escalating regional tensions, while reaffirming its commitment to dialogue, cooperation, and the integrity of the international financial system.

The rising likelihood of further geopolitical escalation has put significant downward pressure on precious metals during the overnight session.

Futures Price Action and Volume

On 2026-08-18, the main Shanghai gold futures contract opened at 952.40 yuan per gram and closed at 956.40 yuan per gram, a change of 0.07% from the previous trading day's settlement. Volume for the day reached 41,087 lots, with open interest at 129,725 lots. During the overnight session, the main gold contract opened at 956.56 yuan per gram and closed at 948.56 yuan per gram, down 0.82% from the afternoon close of the previous day. For silver, the main Shanghai contract opened at 15,997.00 yuan per kilogram and closed at 15,961.00 yuan per kilogram on 2026-08-18, a decline of 1.13% from the prior session. Volume stood at 669,549 lots with open interest of 308,947 lots. Overnight, the main silver contract opened at 15,925 yuan per kilogram and closed at 15,620 yuan per kilogram, falling 2.14% from the prior afternoon's close.

US Treasury Yields and Spread Monitoring

On 2026-08-18, the US 10-year Treasury yield closed at 4.72%, a change of 0.05% from the previous session. The 10-year versus 2-year spread stood at 0.53%, shifting 0.03% from the prior day.

SHFE Gold and Silver Positioning and Volume Changes

For the Au2610 contract on 2026-08-18, long positions changed by +3 lots while short positions changed by -3 lots compared with the prior day. Total trading volume for Shanghai gold futures last session was 297,055 lots, up 8.11% from the previous trading day. On the silver side, for the Ag2610 contract, long positions changed by -44 lots while shorts changed by +2 lots. Total volume for silver futures reached 1,018,395 lots in the last session, an increase of 15.23% from the prior day.

Precious Metals ETF Holdings Tracking

In the ETF space, gold ETF holdings stood at 1,030.66 tonnes yesterday, up 7.13 tonnes from the previous session. Silver ETF holdings remained flat at 14,939 tonnes compared with the prior day.

Precious Metals Arbitrage Tracking

On the futures-spot spread front for 2026-08-18, the domestic gold premium came in at -13.60 yuan per gram, while the domestic silver premium was 4.28 yuan per kilogram. The gold-to-silver ratio for the main SHFE contracts was approximately 59.92 yesterday, a change of 1.21% from the prior session, while the overseas gold-to-silver ratio stood at 66.97, a shift of -0.16% from the previous day.

Fundamentals

Monitoring the Shanghai Gold Exchange T+D market from the last trading day (2026-08-18), SGE gold volume reached 28,992 kilograms, down 15.89% from the prior session. Silver volume was 326,692 kilograms, up 4.26% from the previous day. Gold delivery amounted to 11,872 kilograms, while silver delivery reached 10,380 kilograms.

Strategy

Gold: Cautiously Bullish

With geopolitical tensions showing renewed signs of escalation, risk sentiment in the market is beginning to build, which may slightly dampen demand for gold as a safe-haven investment. However, the core bullish thesis remains largely intact. The US-Iran situation may be shifting from short-term high-intensity conflict toward prolonged confrontation, but this does not undermine gold's role as a substitute for US dollar assets. As such, gold prices are expected to maintain a range-bound yet slightly firmer pattern, with the Au2610 contract likely trading in a band between 930 yuan per gram and 980 yuan per gram.

Silver: Cautiously Bullish

Silver currently follows a similar logic to gold. We maintain a cautiously bullish stance, with the Ag2610 contract expected to oscillate within a range of 14,500 yuan per kilogram to 16,500 yuan per kilogram.

Arbitrage: Hold Off

Options: Hold Off

Risks

Overseas liquidity risks and continued exit of speculative positions remain key factors to monitor.