And all of the sudden small and large silver bullion dealers were out of inventory and they started buying physical inventory big time. Or have you just overheard some talking about how buying silver is the best investing opportunity out there? Even if you’ve not, it looks like you won’t have to wait long to see a titles in national media about looming shortages 5 best stocks to buy for 2021 of physical silver (e.g. major commodity exchange being unable to deliver what was already bought) and astronomic rise of its price. Because this silver snowball has just started rolling down the hill.
Gamestop and AMC certainly dominated news in the investing world during the first half of 2021. If you paid attention to what was happening on Reddit, though, you likely also heard of WallStreetSilver and the silver squeeze. “When there isn’t 100% agreement on a trade, can they still have these effects on the market? You need almost perfect consensus, and even then certain markets like silver can move but you won’t see what we saw in stocks like GameStop,” Mayfield added. Some of these smaller traders believe the hedge funds that were pillaged last week are behind the surge in silver. Communications on messaging boards claim hedge funds have now become active on Reddit anonymously, attempting to drive them out of GameStop bets and into silver, but only after hedge funds had taken huge positions.
Buying during the pandemic certainly played a big role, but it wasn’t until Reddit investors jumped in that the sale of bullion jumped over 250 percent. While this high level of interest has waned a bit, people have remain focused on WallStreetSilver, the Silver Raid and the potential impending silver squeeze. If you haven’t heard of these issues and events, the following guide will help you understand what’s going on and what it could mean for you. Now just for some perspective imagine what will happen if a small part of the money from those $18 trillion of negative yielding bonds starts finding its way in the safe anti-fragile hard asset without counterparty risk that is silver.
Traders have also poured into mining firms and coin-selling sites warn of delays in delivering silver amid unprecedented demand. “The Silver Squeeze is a hedge-fund coordinated attack so they can keep fighting the $GME fight,” one user posted on r/WallStreetBets (GME is GameStop). Some of these were only temporary measures, and many directly targeted the Hunt brothers.
Gold price edges lower, while WTI crud…
Silver suppliers started seeing an increase in orders before February, but on February 2nd, something big happened. People began buying silver and pouring money into SLV (iShares Silver Trust). ” emojis are certainly exciting, they’re not really the crux of what’s going on in the movement.
For instance, having a short squeeze in silver could be difficult because it’s a much deeper and more highly liquid market. For instance, GameStop’s market cap was $1.4 billion in mid-January, but this increased 16 times over when Reddit traders started to talk up the stock. If we look at the quantity of silver stored in London vaults, it is nearly 1.08 billion ounces of silver, according to the LBMA data released back in November 2020. This puts the silver valuation stored in these vaults to almost $32 billion. Some silver market analyst are expecting more than 100% rise in the price of silver that could be in front of us in the next months. That will lead the price of silver over the old record highs around 50$/oz which seems appropriate in the time when almost all other financial assets already are on the records and when there seems to be an emerging insatiable demand for silver.
The idea behind WallStreetSilver is that the precious metal is seriously undervalued due to market manipulation. In the minds of many, though, purchasing large supplies of silver could rectify this. Doing so would drive up demand, limit supply and thus make price manipulation more difficult. The silver market frenzy extended to physical demand for the metal, with coin dealers reporting delays in deliveries as they were overwhelmed by demand. A big move in the physical price of silver could hurt big investors that were anticipating it to fall. Silver futures jumped 9.3% to $29.40 a troy ounce, their biggest one-day percentage gain since March 2009 and the highest level since February 2013.
Create your username and password
- Many Wall Street insiders even bet that this will take place in the near future.
- Traders have also poured into mining firms and coin-selling sites warn of delays in delivering silver amid unprecedented demand.
- Scrolling through the many threads in the Reddit group reveals what one might expect from any online community.
- Spread bet, trade CFDs or deal shares – decide which of our products is best for you.
Share dealing and IG Smart Portfolio accounts provided by IG Trading and Investments Ltd, CFD accounts and US options and futures accounts are provided by IG Markets Ltd, spread betting provided by IG Index Best e commerce stocks Ltd. For now, I am watching and waiting to see if silver can close decisively above $30. I’ve been very optimistic about the outlook for safe-haven assets like gold and silver. Because I had been correctly expecting a serious economic crisis, I have favored safe-haven assets over risk assets such as stocks and real estate.
Options and futures are complex instruments which come with a high risk of losing money rapidly due to leverage. Before you invest, you should consider whether you understand how options and futures work, the risks of trading these instruments and whether you can afford to lose more than your original investment. Nonetheless, it would be unwise to underestimate the purchasing power of retail investors, and the idea of this was clearly demonstrated last week. The task of a short squeeze may be a difficult one, but the fact is that hedge funds are against the ropes while retail traders are throwing the big hooks. Buying physical silver or shares of silver stocks is a way to be involved in the so-called “Silver Squeeze 2.0.” When more investors buy a stock or commodity, short-sellers usually need to sell shares to cover their losses.
Wall Street Silver and Reddit
While gold is expected to be of great importance in a worst case scenario it doesn’t possess qualities to perform nearly as well as silver in other better macro scenarios. So gold may be robust but it is not anti-fragile, while silver is! And silver also looks relatively undervalued compared to gold if history is our guide. While rates are not nominally negative in the USA, the real rates (nominal rates minus inflation) are very negative. Prior Trading sugar to joining Forbes, Rob covered big data, tech, policy and ethics as a features writer for a legal trade publication and worked as freelance journalist and policy analyst covering drug pricing, Big Pharma and AI. He graduated with master’s degrees in Biological Natural Sciences and the History and Philosophy of Science from Downing College, Cambridge University.
iShares Silver Trust (SLV) stock
After all, this type of analysis helped me spot Bitcoin’s recent run-up ahead of time. Right now, silver futures are trading in a range between the $22 support level and the $30 resistance level that formed at the peak in early-August. If silver can push above $30 on strong volume, the odds of an even more extensive bullish move will increase. Additionally, one of the most major uses of silver is in the industrial world. Many of the home electronics you have probably have the metal in there. And while WallStreetSilver may focus on overcoming price manipulation, increased sales of electronics mean the demand will rise regardless.
However, reddit traders need to understand that the silver market is much more liquid than individual stocks like GameStop GME , AMC and Blackberry, which caused real pain for some prominent hedge funds last week. It’s unclear how a short squeeze in silver would affect hedge funds, compared with the impact the short squeeze in stocks like GameStop or AMC had on them. Hedge funds and other investors who have a net long position in silver futures are positioned to benefit from a rise in prices. Money managers have had a net long position on the metal since mid-2019, according to data from the Commodity Futures Trading Commission, Bloomberg reported. The value of shares, ETFs and other ETPs bought through a share dealing account, a US options and futures account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Some ETPs carry additional risks depending on how they’re structured, investors should ensure they familiarise themselves with the differences before investing.
The Relative Strength Index on the daily time frame has reached near $70, which means a pullback is likely. If there is a pullback, prices may retrace to the $27 to $28 price level. Silver prices recorded two consecutive weeks of gains on Friday, following two back-to-back weeks of losses. The big bull run started on January 28, when the silver open price was $25.26 and the low was $24.86. On Friday, January 29, silver prices touched a high of $27.65, and this bull run pushed the silver spot price above $30 today. In simple words, silver has surged nearly 19% since Thursday last week.
I still believe that these safe-havens will thrive in the years to come as central banks continue to flood the world with liquidity in an attempt to prop-up the debt-ridden global economy. But there is also a short term dynamic that is expected to trigger a big rise in price of silver during the coming months. Given that silver prices took out the $30 price level earlier today, the next major psychological resistance is $35 and $40. Speaking from a technical perspective, silver prices are extremely overbought.
