Geopolitical tensions remain a focal point, as sources indicate the Trump administration has repeatedly informed mediators that it has no intention of returning to the terms of the memorandum of understanding reached between the US and Iran in June. This stance has introduced significant obstacles to the intensive diplomatic efforts scheduled to resume this week. Meanwhile, Rear Admiral Ali Rezaei, Secretary of Iran's Supreme National Security Council, stated that Tehran has prepared a list of conditions to present to Washington, noting that while vessels have been temporarily permitted to pass through specific lanes in the middle of the Strait of Hormuz, future transit through the strait will be contingent upon a signed memorandum with the United States.
On the monetary policy front, Cleveland Fed President Beth Hammack reiterated that policymakers should take action now to curb inflation. She added that the current level of interest rates is not restrictive enough to allow price pressures to subside on their own. At last month's policy meeting, three officials cast dissenting votes, with Hammack among those advocating for a 25-basis-point rate hike. The policymakers ultimately decided to hold the benchmark rate steady for the fifth consecutive meeting.
Futures market data for August 27, 2026: The main Shanghai gold contract opened at 1001.00 yuan per gram and closed at 995.30 yuan per gram, down 0.77% from the previous trading day's settlement. Trading volume reached 41,087 lots with open interest of 129,725 lots. During the overnight session, the main gold contract opened at 992.32 yuan per gram and closed at 996.72 yuan per gram, up 0.14% from the afternoon settlement. The main Shanghai silver contract opened at 16,659.00 yuan per kilogram and closed at 16,728.00 yuan per kilogram, down 0.17% from the prior session's close, with volume of 672,442 lots and open interest of 260,536 lots. The overnight session for silver saw the contract open at 16,600 yuan per kilogram and close at 16,915 yuan per kilogram, rising 1.12% from the afternoon settlement.
Yield and spread monitoring: On August 27, 2026, the US 10-year Treasury yield closed at 4.66%, a change of 0.02% from the previous day. The 10-year versus 2-year spread stood at 0.47%, with no change from the prior session. Position and volume changes on the Shanghai Futures Exchange: In the Au2610 contract, long positions increased by 3 lots while short positions decreased by 3 lots from the prior day. Total trading volume for all Shanghai gold contracts hit 438,148 lots, up 5.67% from the previous session. For silver, the Ag2610 contract saw long positions decline by 44 lots while short positions rose by 2 lots. Total silver contracts traded at 1,075,581 lots, a change of 3.46% from the prior session.
Precious metals ETF holdings: Gold ETF holdings rose by 1.141 tonnes to 1,046.636 tonnes, while silver ETF holdings decreased by 16.87 tonnes to 15,345.86 tonnes. Arbitrage tracking: The domestic gold premium stood at -1.09 yuan per gram, while the silver premium was -51.17 yuan per kilogram. The gold-to-silver ratio on the Shanghai Futures Exchange main contracts was approximately 59.50, down 0.60% from the previous day, compared to an offshore ratio of 67.47, a decline of 1.02%.
Fundamentals from the Shanghai Gold Exchange T+D market: Gold trading volume reached 46,498 kilograms on August 27, up 13.69% from the previous session. Silver volume amounted to 233,018 kilograms, a decrease of 15.27%. Gold delivery totaled 11,872 kilograms, while silver delivery reached 12,450 kilograms.
Strategy outlook: Gold: Cautiously bullish. Although US-Iran negotiations are progressing poorly, there has been no marginal escalation in tensions, and Iran still appears willing to partially restore traffic through the Strait of Hormuz within the framework of the memorandum. The negotiation process warrants continuous monitoring. Additionally, while Fed officials have struck a hawkish tone, this does not alter the market's near-term trading narrative favoring precious metals as an alternative to dollar assets. As such, gold prices are expected to maintain a range-bound yet firm tone, with the Au2610 contract likely oscillating between 995 yuan per gram and 1,025 yuan per gram.
Silver: Cautiously bullish. Silver shares a similar logic to gold and is also expected to sustain a range-bound firm trajectory, with the Ag2610 contract likely trading between 16,300 yuan per kilogram and 17,500 yuan per kilogram. Arbitrage: Stand aside for now. Options: Stand aside for now.
Risks: Overseas liquidity risks and sustained withdrawal of speculative positions.
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