Huatai Futures: China-US Economic and Trade Consultations Amid Ongoing US-Iran Conflict, Which Way for Precious Metals?

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Source: Huatai Futures

Author: Shi Cheng

Market Analysis

Regarding tariffs, China and the U.S. held economic and trade talks in Paris, France, agreeing to explore the establishment of a cooperation mechanism to promote bilateral trade and investment. In response to recent U.S. measures related to the Section 301 investigation, corporate sanctions, and market access restrictions involving China. Geopolitically, President Trump stated that after launching strikes on Iran’s main oil export hub, Hormuz Island, attacking the island’s oil infrastructure remains an option. Trump hopes European countries, Japan, South Korea, and others will assist in ensuring safe navigation through the Strait of Hormuz, but German Chancellor Merkel said Germany will not participate in escorting. Trump also said the Federal Reserve should hold a “special meeting” to cut interest rates. He again criticized current Fed Chair Powell, saying rates should be “immediately” lowered. Meanwhile, the U.S. Department of Justice has requested a federal judge to reconsider the decision to revoke the subpoena for Fed Chair Powell.

Futures Market and Trading Volume:

On March 16, 2026, the main contract for Shanghai Gold opened at 1140.70 yuan/gram and closed at 1118.34 yuan/gram, a change of -1.29% from the previous trading day. The trading volume was 41,087 lots, with open interest at 129,725 lots. During the night session, the Shanghai Gold main contract opened at 1120.00 yuan/gram and closed at 1115.40 yuan/gram, down 0.26% from the afternoon close.

On March 16, 2026, the main contract for Shanghai Silver opened at 21,430.00 yuan/kilogram and closed at 20,301.00 yuan/kilogram, a change of -2.97% from the previous day. The trading volume was 723,961 lots, with open interest at 216,658 lots. During the night session, the Shanghai Silver main contract opened at 20,400 yuan/kilogram and closed at 20,528 yuan/kilogram, up 1.12% from the afternoon close.

U.S. Treasury Yield and Spread Monitoring:

On March 16, 2026, the U.S. 10-year Treasury yield closed at 4.226%, up 0.59 basis points from the previous day. The spread between the 10-year and 2-year yields was 0.551%, down 0.88 basis points.

Changes in Gold and Silver Holdings and Trading Volume on the Shanghai Futures Exchange:

On March 16, 2026, the Au2604 contract saw a decrease of 5,041 long positions and 1,720 short positions from the previous day. The total trading volume for Shanghai Gold contracts was 350,401 lots, a 16.09% change from the previous day. For Shanghai Silver, the Ag2606 contract saw an increase of 4,057 long positions and a decrease of 221 short positions. The total silver trading volume was 1,223,835 lots, a 27.54% change from the previous day.

Precious Metal ETF Holdings Tracking:

As of yesterday, gold ETFs held 1,071.56 tons, down 4.29 tons from the previous day. Silver ETFs held 15,460 tons, a decrease of 79 tons.

Precious Metal Arbitrage Tracking:

Price premium: On March 16, 2026, the domestic premium for gold was 21.65 yuan/gram, and for silver, it was 673.40 yuan/kilogram. Gold-silver ratio: The main contract price ratio on the Shanghai Futures Exchange was approximately 55.09, a 4.06% change from the previous day. The overseas gold-silver ratio was 60.73, a 2.00% change from the previous day.

Fundamentals:

On the Shanghai Gold Exchange T+d market, on the previous trading day (March 16, 2026), gold trading volume was 51,452 kilograms, a 54.34% change from the previous day. Silver trading volume was 288,302 kilograms, down 45.61%. Gold delivery volume was 11,872 kilograms, and silver delivery volume was 30 kilograms.

Strategy

Gold: Neutral

Current market risk sentiment is rising, with no significant improvement in geopolitical conflicts; demand for gold investment may be slightly suppressed. Therefore, gold prices are expected to fluctuate mainly within a range, with the Au2604 contract oscillating between 1080 yuan/gram and 1180 yuan/gram.

Silver: Neutral

Currently, silver and gold are both experiencing price fluctuations, with liquidity constraints exerting noticeable pressure on prices. The Ag2606 contract is expected to fluctuate between 19,500 yuan/kilogram and 21,500 yuan/kilogram.

Arbitrage: Short on gold-silver ratio at high levels

Options: Temporarily on hold

Risks

Overseas liquidity risk

Continued exit of speculative positions

Securities Investment Consulting License: [2011] No. 1289

Disclaimer:

This report is prepared based on information deemed reliable and publicly available, but the company makes no guarantees regarding its accuracy or completeness. The opinions, conclusions, and forecasts in this report only reflect the views and judgments at the time of publication. The company may issue research reports inconsistent with the opinions, assessments, and forecasts contained herein at different times. The company does not guarantee that the information in this report remains up-to-date. The company reserves the right to modify the information without notice. Investors should pay attention to updates or revisions. While the company strives for objectivity and fairness, the opinions, conclusions, and recommendations are for reference only, and investors should exercise independent judgment. The company and authors are not responsible for any consequences resulting from reliance on or use of this report. All trademarks, service marks, and logos used in this report are the property of the company. No organization or individual may reproduce, copy, publish, quote, or redistribute this report in any form without written permission from the company. If quoting or publishing with permission, it must be within the permitted scope and credit “Huatai Futures Research Institute.” The company reserves the right to pursue legal responsibility. All trademarks and service marks in this report are owned by the company. Huatai Futures Co., Ltd. All rights reserved.

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