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Silver futures jumped nearly 12% on Monday to over $ 30 an ounce – an eight-year high – as Reddit-fueled day traders rushed into the precious metal.
The price of silver is on the rise as the online trading movement fueling the rise of unloved stocks like GameStop has made the precious metal shine.
Silver futures jumped nearly 12% on Monday to over $ 30 an ounce – an eight-year high – after strong gains over the weekend.
On Twitter, #silversqueeze was all the rage as investors turned their attention to the latest market strategy to emerge from the “WallStreetBets” forum on Reddit. The online army of Reddit traders rallied over the past week to defend underprivileged companies like GameStop and AMC, beating hedge funds that had bet stocks would fall by shorting them, in a stunning reversal of financial power piercing Wall Street.
Today, money has become the latest example of the influence of WallStreetBets followers targeting inequalities in the global financial system.
Michael Every, global strategist at Rabobank, said online that the prices of gold and silver are being suppressed by financial bets against them.
If the price rises enough for an extended period, it is believed, the big investors who bet against gold and silver would eventually have to reverse those trades, buy back – and push the price even higher. That’s part of what helped fuel a surge in GameStop last week.
The silver market frenzy also extended to physical demand for the metal, with coin dealers reporting delays in deliveries as they were overwhelmed by demand.
The Silver Mountain, a Netherlands-based bullion trader, said on its website “due to the extreme volatility in the market, we cannot accept any new orders at this time,” adding that it hopes to reopen in the ‘afternoon.
Demand has spilled over into Australian mining stocks, even those that have yet to start producing metal. Silver Mines Ltd, which works on an undeveloped deposit, jumped 50% on Monday, while other mining stocks on the Australian Stock Exchange posted double-digit gains.
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