An interesting day for #Gold and #Silver, with both metals rallying despite crude oil climbing 4.4% and U.S. interest rates moving higher. At the same time, implied gold and silver EFPs remain elevate

We've done a lot of constructive work to reach this point, and market positioning appears to be rebuilding. All eyes now turn to this week's CPI report, which should provide additional guidance on the FOMC's next move. The market is still assigning meaningful odds to another rate hike in September. Interestingly, today's 1-day WatchGold Gold/USD chart shows both the U.S. dollar and gold rising together, a combination that doesn't occur very often.

The September silver EFP eased by 2 cents, despite silver gaining nearly 3% on the day. At approximately 5% annualized yield, it remains about 1 percentage point above the 1-month OTC London silver forward rate of roughly 4%. The key difference from last year is that OTC silver forward rates are now comfortably in contango, whereas a year ago the market was experiencing a significant liquidity squeeze and backwardation. This tells me that tariffs on silver will probably not be imposed. Last year, the threat of tariffs did help silver rally as it caused a huge dislocation and liquidity situation between London and the CME.

Looking ahead, August 19 remains the scheduled effective date for the new U.S. tariff regime affecting the relevant customs classification. We continue to expect additional guidance from U.S. Customs and Border Protection (CBP) regarding the treatment of investment-grade silver bars. My assumption remains that tariffs will ultimately not apply, as this appears to be an unintended oversight.

The December gold EFP also remains relatively elevated, which could encourage additional gold shipments back into the U.S. Interestingly, we recently saw gold leave CME warehouses despite December futures trading at a healthy premium to spot London prices. These physical flows will be worth monitoring closely in the weeks ahead.

Meanwhile, 1-month at-the-money implied volatility continues to edge higher, with gold at 22.7% and silver at 42%. Although volatility is increasing, it remains well below the elevated levels seen earlier in 2026.

Overall, I remain cautiously optimistic. However, markets continue to be driven by headlines, particularly surrounding Fed policy and developments in the Middle East. Patience and discipline remain essential.

This commentary is provided for educational purposes only and should not be considered investment advice.

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