Silver is the new GameStop: Metal’s price hits 8-year high from online movement
LONDON — The price of silver is rallying as the online trading movement fueling the rise of unloved shares such as GameStop took a shine to the precious metal.
Silver futures jumped almost 12% on Monday to more than $30 per ounce — an eight-year high — following strong gains over the weekend.
On Twitter, #silversqueeze was trending as investors turned their attention to the latest market strategy to emerge from the “WallStreetBets” forum on Reddit. The online army of Reddit traders have over the past week rallied to defend out-of-favor companies such as GameStop and AMC, defeating hedge funds that had bet on those shares’ fall by selling them short, in a stunning reversal of financial power transfixing Wall Street.
Now, silver has become the latest example of the influence wielded by followers of WallStreetBets targeting inequality in the global financial system.
Michael Every, global strategist at Rabobank, said that the claims online are that gold and silver prices are being suppressed by financial bets against them.
If the price goes up enough for an extended period of time, the thinking goes, the big investors who bet against gold and silver would eventually have to reverse those trades, buying back in — and pushing the price even higher. That is partly what helped fuel a massive surge in GameStop last week.
It’s the kind of rescue that the most indebted companies in America can only dream of: a fresh injection of cash that doesn’t hurt their already depressed stock price or load even more costly debt onto their balance sheet. This time it’s coming from Redditors.
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 dealer, said on its website: “Due to extreme market volatility we cannot accept any new orders at this moment.” The company added that it hoped to reopen by the afternoon.
Demand overflowed into Australian mining stocks, even those of companies that have yet to start producing any of the metal. Shares in ilver Mines Ltd., which is working on an undeveloped deposit, jumped 50% on Monday, while other mining shares on the Australian Stock Exchange saw double-digit gains.
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