After three days of limit-down, the premium rate narrowed to 52%. Guotou Silver LOF's latest net value increased by 8.05%.

Wednesday, Guotou Silver LOF once again hit the limit-down.

As of the close on February 4th, Guotou Silver LOF was firmly locked at the limit-down price, with the latest price at 3.825 yuan per share, marking three consecutive trading days of “one-word limit-down.” The trading volume on that day rose to 239 million yuan.

On the evening of February 4th, according to the official website, the latest net asset value (NAV) of Guotou Silver LOF was 2.5108 yuan, up 3.31% from the previous trading day, and then increased by another 8.05%.

Based on the latest NAV, the current on-market trading premium rate has narrowed to 52.34%.

To protect investors’ interests, on the evening of February 4th, Guotou Silver LOF announced again that the fund will be suspended from market open on February 5, 2026, until 10:30 AM on the same day, when it will resume trading.

Market analysis indicates that the recent consecutive limit-downs mainly stem from the forced elimination of the premium bubble caused by the significant deviation of the on-market price from the NAV. Since LOF funds have both on-market and off-market trading mechanisms, recent silver price fluctuations have triggered a sharp correction in the off-market NAV, while the on-market price lagged due to the 10% daily limit on price fluctuations, causing the premium to increase rather than decrease, attracting arbitrage funds and selling pressure simultaneously.

“Off-market NAV has fallen more than 30% in a single day, while the on-market limit-down over three days has only corrected about 30%, which keeps the premium at a historically high level,” said an industry insider. “Although recent silver price rebounds have helped support the off-market NAV and accelerate the convergence of the premium, the current liquidity dilemma—where sell orders are stacked and buy orders are scarce—makes it difficult for most sell orders to be executed.”

It is worth noting that if investors bought Guotou Silver LOF before this round of decline (calculated based on the closing price of 5.247 yuan on January 30th), their floating loss has already reached 27%. The NAV of Guotou Silver LOF on January 30th was 3.2838 yuan, about 0.773 yuan away from the latest NAV.

From the trading data, selling pressure on the limit-down board continues to be released. Wind data shows that on February 4th, the trading volume of this fund expanded to 239 million yuan, with about 30.22 million yuan of sell orders still stacked at the limit-down price at close. The previous two trading days saw trading volumes of 66 million yuan and 107 million yuan, respectively, showing a daily increasing trend, reflecting that as the price drops, some funds are beginning to try to intervene, but overall buying power is still insufficient to absorb the current selling pressure.

One market focus is when the Guotou Silver LOF will open the limit-down. Analysts believe that the key to stopping the decline lies in when the price will return to the fund’s NAV. Market estimates suggest that if silver prices and the fund’s NAV remain at current levels, and assuming continued selling pressure, the price may need to experience about three more limit-downs (dropping to around 2.78 yuan) to reduce the premium rate to about 11%, at which point market forces may re-balance.

“It’s possible that when the premium rate narrows to a certain level, some arbitrage funds will dare to re-enter, accelerating the price’s return to NAV, and the limit-down board could open 1-2 trading days in advance,” but the analysis also emphasizes that high premium rates are not sustainable. Investors blindly chasing high prices may face a “double kill” risk: suffering losses from silver price corrections and from the decline in the premium itself.

(Source: The Paper)