Global Silver Volatility: Why Investors Are Losing Due to Price Fluctuations

SerumSquirrel · 2026-02-12T18:16:09+00:00

In February 2026, Guotai Silver LOF investors faced volatility challenges with a 64.6% premium over net asset value, revealing deeper issues in silver as an investment. Market behavior differs significantly from gold, with silver's slow response to safety demands and heavy industrial influence complicating price forecasting.

SerumSquirrel

2026-02-12 18:16:09

Abstract generation in progress

In early February 2026, investors in the Guotai Silver LOF fund faced serious issues due to sharp fluctuations in the price of precious metals. According to data from the financial platform Jin10, despite three consecutive trading halts amid volatility, the fund maintains a premium of 64.6% over its net asset value. The situation revealed deep-rooted problems in silver as an investment instrument in global markets.

Silver Funds Caught in the Heart of the Price Storm

Holders of Guotai Silver LOF shares experienced unusually high volatility, leading to multiple trading suspensions. The 64.6% premium indicates a significant gap between the fund’s market price and its actual asset value. This discrepancy arises precisely during a period when silver prices are experiencing substantial fluctuations, creating uncertainty for investors.

Why Silver Reacts More Slowly to Safety Demand

Zhao Xiangbin, a researcher at the Beijing Gold Economic Development Center, explained the fundamental difference between the behavior of gold and silver in the markets. When investors seek assets to protect capital, gold prices rise almost immediately. Silver, however, shows a considerable lag—ranging from several weeks to months, and sometimes from one to two years. This time lag creates asymmetry in price movements between the two precious metals and complicates the forecasting of silver fund returns.

Industrial Demand — The Main Driver of Silver Movement

Beyond its role as a safe-haven asset, silver is heavily influenced by industrial demand. The needs of developing sectors—from electronics to photoenergy—significantly impact its pricing. This means silver prices are affected by both macroeconomic factors (safety demand) and microeconomic factors (specific industrial needs), adding an extra layer of complexity for silver fund investors.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.