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The price of silver surpassed the $ 30 an ounce mark for the first time since 2013 when an army of retailers stormed the metal after betting billions of dollars on stocks last week

Retail investors organized in online forums and traded with fee-free brokers such as Robinhood have rallied 1Gained 600 percent in the shares of video game retailer GameStop and dumped assets that big fund managers had bet against
Spot silver rose more than 11 percent in London to $ 30 an ounce on Monday and was on track for its biggest one-day increase since 2008, up around 19 percent since last Wednesday
The jump sparked a rally in silver mining stocks from Sydney to London, with Fresnillo stocks rising 205 percent at the top of the UK blue-chip FTSE 100 index

The action in silver after thousands of Reddit posts and hundreds of YouTube videos suggests that a spike in physical price could hurt big investors with declining bets, while also spotting a foray into a much larger and more liquid market than individual stocks

Wondering why a struggling video game chain is making headlines around the world and what does Reddit and Robinhood have to do with it? It has something to do with shorts, as Paul Donoughue and David Chau explain

“I would look at the silver rally the same way I would look at the GameStop saga – this is not an immediate issue right now from a market stability standpoint, but if we see sharp moves we might see some deleveraging”Markets,” said Antoine Bouvet, an interest rate strategist at ING

“This deleveraging risk mitigation could potentially fuel demand for bonds if it leads to excessive volatility”

At the first signs of deleveraging, Goldman Sachs said the amount of position coverage from buying and selling US hedge funds last week was the highest since the financial crisis more than a decade ago

The rush to silver and GameStop-like stocks has tested limitations in newer trading platforms and processors, frustrating retailers who can’t satisfy their hunger for more frequent buying and selling

The feverish silver purchase made a mistake Big US broker Apmex warns of processing delays while securing more gold bullion The metal exchange stopped trading until Monday morning

The volume of trading in stocks of small miners in Australia was unprecedented, and the leaps and bounds of some non-silver exploration companies exceeded 90 percent

Similar issues were seen with stocks last week GameStop, AMC and some other volatile stocks saw temporary buying restrictions on trading apps like Robinhood as frenzied buying led trading apps to set their limits

“The Reddit crowd is targeting a bigger whale to catalyze a brief push on the silver market,” said Kyle Rodda, an analyst at IG Markets in Melbourne

During the COVID-19 pandemic, the popularity of stock markets has increased as volatility, stimulus checks, and lockouts have led to account openings and investments

The buzz hit the fever last week when the GameStop pile-on resulted in a “short squeeze” that made price gains stratospheric as hedge funds betting against the stock desperately bought it at high prices to replace their positions to close

Now it is silver’s turn and once again the scale of the purchase surprised the professionals

What are hedge funds and how did they (accidentally) make GameStop’s stocks fly to the moon?

Online discussions revolved around silver late last week as Reddit posts suggested that higher prices could hurt banks with large short positions and buying easily accessible exchange-traded silver funds could quickly add value to the metal

Retailers have poured a record $ 30 million ($ 40 million) into the Australian ETF Securities Physical Silver Fund by the afternoon, a silver ETF in Japan up 11 percent

All eyes are on potential gains later in the day in iShares’ US-listed US $ 16.5 billion Silver Trust ETF, which rose 56 percent last week

“We hardly see any chances of a tightening of the silver market,” said Eugen Weinberg from Commerzbank

“After all, the market is not all big and difficult to manipulate Unlike stocks, there is no excessive short selling “

in silver

Global short interest in silver, or the cumulative value of bets where the price goes down, is roughly 900 million ounces – just before global annual production

Banks and brokers hold most of it – roughly 610 million ounces – but it’s not clear if they are net short on the metal or if their bets are offsetting very large physical holdings

“Allegations that some market participants are keeping silver prices artificially low have been around for years, but they are a little difficult to reconcile,” said Michael Jalonen, precious metals analyst at BofA

He said he was “bullish [on] silver for a while” based on new uses, including solar panels, and expected it to go above $ 31 an ounce

So far, the Redditers keep rolling. Some of the breakaway traders are millionaires on paper and their hedge fund opponents are nursing their wounds Melvin Capital, who bet against GameStop, lost 53 percent in January

Robinhood, Redditer’s principal broker, has also rolled back and lifted some of the buying restrictions imposed last week, although eight companies, including GameStop, AMC Entertainment, and BlackBerry, remain restricted

With regulators circling both Robinhood and the Redditer forums, the battle is far from over

“I’ll tell you one thing, I absolutely guarantee this will end in tears I just don’t know when,” said Michael McCarthy of CMC

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Silver price

World news – AU – GameStop dealers pour in silver and send the price to the highest level since 2013

Source: https://www.abc.net.au/news/2021-02-02/silver-price-hits-highest-since-2013-as-gamestop-traders-buy/13110992