Quick overview

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China suspended trading of five commodity funds on Friday to reduce the underlying risks of investment mania in gold, silver, and oil, and to stop the mania of gold, silver, and oil investors.

The only public fund investing in silver futures in mainland China, UBS SDIC Silver Futures Fund, a listed open-ended fund (LOF), will be suspended for the entire day on Friday, the second such halt since January 22.

The only public fund in China that makes direct investments in silver futures, the UBS SDIC Silver Futures Fund, was suspended for the duration of the trading day. After several risk alerts and brief pauses since late 2025, this is its second full-day suspension since January 22.

The fund has traded at unsustainable premiums—around 36 percent over Shanghai Futures Exchange silver contracts—driven by speculative demand, social media hype, and limited alternatives for Chinese investors to gain silver exposure.

Shorter one-hour suspensions (until 10:30 a.m.) were imposed on four oil LOFs.  According to analysts quoted in reports, these halts are intended to preserve capital market stability, shield retail investors from potential “huge losses” if conditions abruptly reverse, and lower underlying systemic risks.

A significant increase in silver and gold prices, driven by geopolitical tensions and supply limitations (including China’s previous export restrictions), is among the background factors.

Chinese investors’ speculative demand,  demonstrated by the premiums local prices have earned over international benchmarks, contributed to the increase in global prices. There have also been other indications of high demand. With warnings that the premium over Shanghai Futures Exchange contracts is “unsustainable,”

China’s sole pure-play silver fund temporarily stopped trading this week and turned away new clients. Citigroup Inc. stated earlier this week that “Chinese retail investors tend to be trend-following, like traders in US futures and derivatives markets.”

The bank projected that silver would reach $150 in three months and that strong buying would continue “due to robust short-term momentum.” Gold prices have risen alongside demand from exchange-traded funds backed by the metal. However, ETF withdrawals have not stopped silver’s recent sharp increases.