Geopolitical risks have intensified following a significant military operation by Yemen's Houthi forces targeting Saudi Arabia. The attack struck facilities owned by Saudi Aramco in locations including Abha and Najran, as well as the Jizan economic city complex. The Houthi group has indicated that further military actions against deeper Saudi territory are planned.

On the monetary policy front, reports suggest the Bank of Japan is preparing to raise its benchmark interest rate by 25 basis points to 1.25% at next week's policy meeting. This move could accelerate the pace of tightening to approximately once per quarter. Supporting this expectation, Japan's second-quarter GDP was revised upward to 1.4%, and July wage data showed broad strength. Interest rate markets have fully priced in the anticipated hike.

Turning to trading activity on September 8, 2026, the main Shanghai gold futures contract opened at 951.00 yuan per gram and settled at 953.12 yuan per gram, up 0.25% from the prior close. Trading volume reached 41,087 lots with open interest of 129,725 lots. During the overnight session, the contract opened at 953.98 yuan per gram and closed at 949.24 yuan per gram, representing a 0.41% decline from the afternoon close.

For silver, the main Shanghai futures contract opened at 16,020.00 yuan per kilogram and closed at 16,125.00 yuan per kilogram, up 0.84% from the previous session's close. Volume stood at 358,437 lots with open interest of 199,339 lots. The overnight session saw the contract open at 16,198 yuan per kilogram and finish at 16,157 yuan per kilogram, a modest 0.20% gain from the afternoon close.

In the bond market, the US 10-year Treasury yield settled at 4.78% on September 8, 2026, unchanged from the prior day. The spread between 10-year and 2-year yields narrowed to 0.41%, a decrease of 0.02% from the previous session.

Examining positioning data from the Shanghai Futures Exchange, the Au2610 contract saw long positions increase by 3 lots while short positions declined by 3 lots. Total gold futures volume across all contracts fell sharply by 43.26% to 234,389 lots compared with the prior session. For silver, the Ag2610 contract recorded a decrease of 44 lots in long positions and an increase of 2 lots in short positions. Total silver futures volume dropped 29.37% to 633,997 lots.

In precious metals exchange-traded funds (ETFs), gold ETF holdings decreased by 1.426 tonnes to 1,050.63 tonnes yesterday. Silver ETF holdings remained unchanged at 15,339.36 tonnes.

Looking at arbitrage metrics, the domestic gold premium stood at -0.56 yuan per gram as of September 8, while the domestic silver premium was -44.32 yuan per kilogram. The Shanghai Futures Exchange gold-to-silver price ratio was approximately 59.11, down 0.59% from the prior session, while the overseas ratio was 67.17, a decline of 1.07%.

On the Shanghai Gold Exchange, T+D gold trading volume reached 29,198 kilograms on September 8, a decrease of 34.07% from the previous day. Silver trading volume fell 5.79% to 323,488 kilograms. Gold delivery amounted to 11,872 kilograms while silver delivery reached 13,500 kilograms.

Gold strategy: Neutral

Market risk sentiment is beginning to emerge, which may slightly dampen demand for gold investment. As a result, gold prices are likely to consolidate in the near term, with the Au2610 contract expected to trade within a range of 940 to 960 yuan per gram.

Silver strategy: Neutral

Silver is following a similar logic to gold, with prices expected to remain range-bound. The Ag2610 contract is projected to trade within a band of 15,800 to 17,000 yuan per kilogram.

Arbitrage: Pause

Options: Pause

Key risks include overseas liquidity concerns and the continued exit of speculative positions from the market.