US Treasury Secretary Bessent has been signalling a flurry of policy moves: as long-term Treasury yields trend higher again, he indicated that the Treasury's single long-dated bond repurchase could exceed $4 billion, while stressing the strength of the Treasury's policy toolkit.

On the Iran front, Bessent revealed plans for a press conference on August 24 to detail Washington's action plan against Tehran. The US intends to impose what he called the "harshest ever" sanctions on Iran, suggesting that if maximum economic pressure is applied, a return to large-scale military operations may not be necessary. He also reaffirmed the strong dollar policy, noting the greenback is returning to levels seen two months ago.

On the geopolitical front, with negotiations with Iran stalled, President Trump announced "devastating economic actions" against Tehran, describing them as an unprecedented economic war and isolation campaign. Any nation allowing its financial institutions, companies, airports, or government entities to support Iran will face "enormous economic consequences." In response, Iranian Foreign Minister Araghchi suggested the US move is intended to divert attention from domestic fiscal problems, including rising debt and interest payment burdens.

Futures market performance: On August 20, 2026, the main Shanghai gold futures contract opened at 965.00 yuan/gram and closed at 972.94 yuan/gram, a 2.90% change from the previous settlement. Daily volume reached 41,087 lots with open interest of 129,725 lots. During last night's session, the main gold contract opened at 969.00 yuan/gram and closed at 979.62 yuan/gram, up 0.69% from yesterday afternoon's close. The main Shanghai silver futures contract opened at 15,850.00 yuan/kg and closed at 16,361.00 yuan/kg, up 6.02% from the prior settlement. Volume hit 759,355 lots with open interest of 302,419 lots. In overnight trading, silver opened at 16,220 yuan/kg and closed at 16,589 yuan/kg, a 1.39% gain from the afternoon close.

US Treasury yields and spreads monitoring: On August 20, 2026, the US 10-year Treasury yield closed at 4.65%, down 0.06% from the previous session. The 10-year minus 2-year spread stood at 0.46%, also down 0.06%.

SHFE gold and silver positioning and volume changes: For the Au2610 contract on August 20, long positions changed by +3 lots while shorts changed by -3 lots from the prior day. Total Shanghai gold futures volume reached 467,949 lots, up 30.61% from the previous session. For the Ag2610 contract, longs changed by -44 lots while shorts changed by +2 lots. Total silver futures volume hit 1,199,678 lots, an 11.68% increase day-on-day.

Precious metals ETF holdings tracking: Gold ETF holdings rose by 9.41 tonnes to 1,038.93 tonnes yesterday, while silver ETF holdings remained flat at 15,275.59 tonnes.

Precious metals arbitrage tracking: On August 20, the domestic gold premium stood at -47.22 yuan/gram, while the domestic silver premium was -1,059.38 yuan/kg. The gold-to-silver price ratio on the SHFE main contracts was approximately 59.47, down 2.95% from the previous session, while the offshore gold-to-silver ratio was 68.75, up 1.97%.

Fundamentals: At the Shanghai Gold Exchange's T+D market on August 20, gold trading volume reached 69,202 kg, up 87.34% from the previous session. Silver trading volume was 344,236 kg, a 9.85% increase. Gold delivery volume stood at 11,872 kg, while silver delivery volume was 94,800 kg.

Strategy — Gold: Cautiously bullish. Despite the deteriorating US-Iran geopolitical situation, gold's current pricing model is shifting more toward a re-pricing of its status as a non-US asset, which may slightly boost investment demand for gold. As a result, gold prices are expected to maintain a range-bound but firm bias in the near term, with the Au2610 contract expected to trade within a range of 950-1,000 yuan/gram.

Strategy — Silver: Cautiously bullish. Silver's logic mirrors that of gold, with prices also expected to sustain a range-bound yet firm pattern. The Ag2610 contract is projected to trade within a range of 16,000-17,000 yuan/kg.

Arbitrage: Stand aside.

Options: Stand aside.

Risks: Overseas liquidity risks and continued exodus of speculative positions.