Silver Fund Premium Draws Day Trading Attention; Guotou Silver LOF Halts Trading

The soaring premium valuations in silver-linked funds have sparked widespread market attention, particularly concerning potential day trading risks. Guotou Silver LOF announced a trading suspension beginning December 26th market opening through 10:30 AM, raising significant questions about fund valuation sustainability and investor protection.

Silver Prices Rally Over 140% Year-to-Date, Driving Fund Surge

London silver has experienced a dramatic rally in recent weeks, closing at $71.81 per ounce on December 24th—representing a staggering year-to-date gain exceeding 140%. This exceptional commodity performance has directly fueled extraordinary returns in silver-focused funds. Guotou Silver LOF has captured even more dramatic appreciation, with cumulative year-to-date gains reaching 254.9%, substantially outpacing the underlying silver benchmark.

Extreme Premium Rates Trigger Trading Suspension and Risk Warnings

The fund has reached its daily trading limit for three consecutive sessions, with premium valuations reaching as high as 68.19%—an unsustainable level that prompted the trading halt. The fund manager has adjusted subscription limits for Class A shares to 500 yuan and warned that secondary market premiums at such elevated levels are neither reasonable nor maintainable. This gap between the fund’s market price and its net asset value creates significant risks for day trading participants seeking short-term profit opportunities.

Industry-Wide Risk Alerts as Commodity Funds Hit Circuit Breakers

The Guotou Silver LOF suspension is not an isolated incident. Commodity LOFs and resource-focused LOFs across the sector have collectively hit their daily trading limits, signaling broader market enthusiasm that fund companies view as unsustainable. In response, multiple fund managers have issued formal high premium risk warnings and announced temporary trading halts. These coordinated risk alerts underscore growing concerns that the extreme valuations and day trading activity could trigger significant market corrections and investor losses.

Fund Manager Urges Caution on Secondary Market Premiums

The fund company has explicitly cautioned investors against the secondary market premium trap, emphasizing that current valuation levels cannot be sustained indefinitely. As long-term silver bullion prices continue their upward trajectory, the gap between market prices and net asset values will likely normalize, potentially causing substantial losses for those engaging in high-premium day trading strategies. This warning represents an important regulatory safeguard for retail investors unfamiliar with the risks of trading at significant premiums.