Recently, the price of precious metals has continued to rise, and at the same time the price of gold has exploded, the price of current goods and silver has also made a historic breakthrough.

The domestic investment market is also heating up simultaneously. Faced with the flooding of funds, in order to ensure the stable operation of the portfolio, relevant fund managers choose to "thank customers behind closed doors".

Following the purchase restriction three days ago, SDIC UBS Silver Futures upgraded its purchase restriction. Starting from October 20, the latest subscription limits of the fund's Class A and Class C shares have been as low as 100 yuan and 1000 yuan respectively, which has been significantly reduced from before.

SDIC UBS Fund issued an announcement.

This is not the first time the fund has recently announced a limited purchase. The announcement showed that the fund had imposed a restriction on October 15th, with a single-day purchase limit of A fund shares of 6,000 yuan, and a single-day purchase limit of C fund shares of 40,000 yuan. Therefore, this restriction is a new "upgrade" after only three trading days, and there is no reduction in the upper limit of the amount of application for A and C shares.

Wind data show that the State Bank Swedish Silver Futures was established on August 6, 2015, the fund manager is Zhao Jiang, a commodity fund, and is also the only publicly available silver futures fund, as of the end of the second quarter of this year, the size of 30.14 billion yuan.

Since this year, international cash prices have surpassed gold.

Since the beginning of this year, silver prices have been soaring. This is driven by multiple factors, including tightening liquidity in the London market, rising risk aversion among investors, and growing industrial demand.

Since this year, silver has surpassed gold. Recently, the international cash price has also broken the $50 per ounce threshold, becoming the market focus. The key reason for driving this wave is the core of the global precious metal market, and the London cash market is experiencing severe liquidity tensions.

The liquidity of the silver market depends on the hundreds of millions of ounces of silver stored in the London treasury.This inventory, however, has been consumed in recent years: initially because of insufficient supply of minerals, it is difficult to meet industrial needs such as investors and photovoltaics; and this year, due to concerns about potential tariff risks, large amounts of precious metals have been shipped to the United States, further escalating tensions in the London market.

London silver inventories have fallen by about a third since mid-2021, and a sizable portion of them are held by exchange-traded fund ETFs for a long time. According to Bloomberg calculations, there are currently only about 200 million ounces of freely circulating inventory on the market, a sharp drop of about 75% compared with the peak of about 850 million ounces in 2019.

In the context of liquidity tensions, many traders who previously bet on the decline in the price of silver, i.e. the empty head, are now forced to buy silver back at a higher price in order to stop losses or respond to additional security demands. With more empty shelves being forced to store, this empty hand also causes the purchase of silver to rise, and the price is further pushed.

Put aside the trading factors of financial markets and return to the fundamentals of demand. Analysts pointed out that silver not only serves as a storage of value, but also has industrial uses. This year, factors such as tensions in global trade, doubts about the independence of the Federal Reserve, and the "shutdown" of the U.S. government have all intensified market uncertainty and pushed up investors 'demand for safe-haven assets, making precious metals a prominent performer. One of the asset classes.

In addition, according to Citigroup's forecast: industrial use is expected to become the largest source of silver demand this year, reaching 430 million ounces. Among them, the demand of the solar energy industry is listed separately, approximately 299 million ounces, reflecting that the renewable energy sector is becoming an important driver of silver demand growth. Other needs, there are physical investments and jewelry silverware and so on.

John Champagalia, CEO of global asset management company Sprott: We believe that silver is in the midst of a "catch-up market" and there is still a lot of room for growth.

With regard to future trends, Goldman Sachs pointed out that the liquidity tightening of silver is a major driver of its recent surge, but this tightening is expected to be temporary. Because the rise in London¡¯s current currency prices are stimulating the ¡°return¡± of silver from the United States and elsewhere to London. In addition, because silver is not supported by the demand of central banks like gold, analysts warn that the expected volatility of silver and the risk of price decline is greater than gold.

Source: China Fund Journal, Central Vision Finance