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“Think about it before relying on unmoderated investment advice online.” “Do not buy or trade in anything without undertaking proper research,” Dr Zhong said. However, today these two companies have given up some of these gains.Īs with any investment, Dr Zhong says it’s important to do your research. In Australia, we saw a rise in ASX-listed silver miners such as Thomson Resources and Silver Mines yesterday.
That of course will spill-over to silver-related stocks,” Dr Zhong said. “In the short run, there is a spill-over from GameStop to silver and as a result the silver price has been pushed up to an eight-year high. Interestingly, Dr Zhong noted that some hedge funds had actually increased their silver holdings. There’s also some confusion as to who is actually driving the silver price surge, with some of the top posts on WallStreetBets alleging that the silver squeeze is not a squeeze at all but a “coordinated attack” by hedge funds who are already “going long” on silver – investing in it and holding onto it hoping that the price will rise over time. “I do not foresee that something like GameStop would happen in silver.” “The silver market is larger and there isn’t as much short-selling activity,” Dr Angel Zhong, a Senior Lecturer in Finance at RMIT University, told Canstar. There are a number of differences between the silver market and GameStop. This is what has happened with GameStop shares and it’s the same logic that’s being applied in the potential ‘silver squeeze’. It’s basically when a share or an asset’s price increases significantly, and this forces investors who had bet on the share or asset falling in value to buy it back at a higher price. You may have heard the term ‘short squeeze’ thrown around last week. However, many members of the WallStreetBets subreddit have said they are not responsible for the push. It’s been speculated that Reddit traders are driving the ‘silver squeeze’ in an attempt to replicate the GameStop short squeeze. Silver prices have increased by around 20% since last Thursday, with investors piling into silver bars and coins, silver-backed exchange-traded funds (ETFs) and silver shares. It’s the latest trading frenzy supposedly sparked by Reddit investors, following last week’s GameStop saga. Plus, all this new investor attention is bound to bring more people into the space, which has been lagging behind gold for some time.The price of silver has hit an eight-year high. As to why? Supportive macro forces - more industrial demand, Biden’s move towards green technology as well as silver’s safe-haven properties. Yet, analysts remain confident that silver will reach the $30 dollar mark and move closer to $50 this year. The Wall Street Bets community even ended up taking down the famous post titled ‘The biggest short squeeze in the world is in SLV,’ which seemed to have triggered the whole move into silver. If we look at the average daily volumes on Comex silver since the start of 2020, they come to around $11 billion dollars.Īnd third, the Reddit disagreement. Second, the sheer size of the silver market is another big obstacle. So, let’s take a look at why the silver squeeze didn’t happen and why prices fell after briefly hitting above $30 an ounce.įirst, the main issue has been that the silver market is more liquid, which makes it very different from plays like GameStop. In fact, most of Reddit posts from this week warned against buying into silver because it was a distraction from its original GameStop play. But one big misconception in the whole silver saga was that the Reddit community was united in the call.
(Kitco News) Silver received an unprecedented amount of attention this week.
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