To The Moon

On December 25th, the offshore Chinese yuan broke through the psychologically significant "7" level against the US dollar during trading, marking the first time in 15 months, with the highest point reaching 6.9985. Concurrently, the onshore yuan also approached the "7" mark, hitting a 15-month high of 7.0053. Geopolitically, six months after the 12-day war between Israel and Iran concluded, senior Israeli officials have been intensively signaling the potential for renewed military conflict with Iran, with the focus being on Iran's efforts to rebuild its ballistic missile arsenal. Regarding overseas interest rates, Bank of Japan Governor Kazuo Ueda stated that the bank is steadily approaching its 2% inflation target. He noted that Japan's current real interest rates are at a very low level, and if the economic outlook aligns with expectations, the central bank will continue to raise interest rates. Futures Market and Trading Volume: On December 25, 2025, the main Shanghai gold futures contract opened at 1,013.94 yuan per gram and closed at 1,008.76 yuan per gram, representing a decrease of 0.58% from the previous trading day's close. The day's trading volume was 41,087 contracts, with open interest standing at 129,725 contracts. During the previous night session, the main gold contract opened at 1,007.00 yuan per gram and closed at 1,019.60 yuan per gram, rising 1.07% compared to the previous afternoon's close. On December 25, 2025, the main Shanghai silver futures contract opened at 17,630.00 yuan per kilogram and closed at 17,397.00 yuan per kilogram, down 1.20% from the prior session's close. The daily trading volume reached 1,313,979 contracts, with open interest at 304,054 contracts. In the preceding night session, the main silver contract opened at 17,397 yuan per kilogram and closed at 18,131 yuan per kilogram, surging 4.22% from the previous afternoon's close. US Treasury Yields and Spread Monitoring: As of December 25, 2025, the US 10-year Treasury yield settled at 4.136%, unchanged from the previous day. The spread between the 10-year and 2-year yields was 0.63%, also flat compared to the prior session. SHFE Gold and Silver Positions and Volume Changes: On December 25, 2025, for the Au2602 contract, long positions decreased by 4,521 contracts from the previous day, while short positions saw a minor reduction of 92 contracts. The total trading volume for Shanghai gold contracts on the previous trading day was 307,456 contracts, a significant decrease of 37.41% from the day before. For silver, on the Ag2602 contract, long positions fell by 15,678 contracts and short positions decreased by 14,342 contracts. The total trading volume for silver contracts on the previous trading day was 3,355,499 contracts, a slight increase of 1.64% compared to the prior session. Precious Metals ETF Holdings Tracking: In the precious metals ETF space, gold ETF holdings stood at 1,068.27 tonnes yesterday, increasing by 3.71 tonnes from the previous day. Silver ETF holdings were 16,447 tonnes, down 56 tonnes from the day before. Precious Metals Arbitrage Tracking: Basis Spread: On December 25, 2025, regarding domestic premiums, the gold domestic premium was -0.74 yuan per gram, while the silver domestic premium was -615.93 yuan per kilogram. Gold-Silver Ratio: The price ratio of the main SHFE gold and silver contracts was approximately 57.98 yesterday, up 0.63% from the previous day. The external market gold-silver ratio was 64.27, increasing by 0.96% from the last trading session. Fundamentals: Monitoring the Shanghai Gold Exchange T+d market for the previous trading day (2025-12-25), the trading volume for gold was 28,920 kilograms, a sharp decline of 48.02% from the prior session. The trading volume for silver was 502,128 kilograms, down 50.32% from the day before. Gold delivery volume was 11,872 kilograms, and silver delivery volume was 31,890 kilograms. Strategy Gold: Cautiously Bullish Current market conditions show a budding risk sentiment, which may enhance investment demand for gold. Therefore, it is anticipated that gold prices will maintain a震荡偏强 (volatile but strengthening) pattern in the near term. The Au2602 contract is expected to trade within a range of 980 yuan/gram to 1,080 yuan/gram. Silver: Neutral Silver's recent gains have significantly outpaced those of gold, leading to a continuous narrowing of the gold-silver ratio. Silver's price is expected to remain relatively strong, supported by tight physical supply. However, caution is warranted due to the risks associated with its historically high price levels. The Ag2602 contract is anticipated to fluctuate within a range of 17,500 yuan/kilogram to 18,600 yuan/kilogram. Arbitrage: Sell the gold-silver ratio on rallies. Options: Temporarily hold. Risks Overseas liquidity risks. Speculative positions continuing to exit the market.