As the asset’s price rises, these traders become increasingly desperate to buy it back to close their positions, which in turn fuels the rally even further. If the buying is aggressive enough, this can lead to a short squeeze, amplifying the upward momentum. A significant portion of Friday’s silver buying volume was likely driven by short-covering. However, unlike GameStop and other unloved stocks targeted by WallStreetBets, silver futures have been strong of late. Hedge funds and other institutional investors had been bullish on silver futures and the precious metal was trading near multi-year highs. As this happens, it’s easy to foresee a significant increase in the price of silver.
Silver jumps 8%, touches 8 year high as Reddit traders try their squeeze play with the metal
- ” emojis are certainly exciting, they’re not really the crux of what’s going on in the movement.
- Jesse has been writing an online column for Forbes since 2013 and is the Director of Marketing, North America at BullionStar — one of Asia’s premier gold and silver bullion dealers that is now entering the U.S. market.
- I’ve been very optimistic about the outlook for safe-haven assets like gold and silver.
- For the past several weeks, I’ve been writing articles and creating video presentations about an imminent silver breakout that could quickly push prices to $50.
I encouraged investors to remain confident, as I believed silver was on the brink of a historic bull royal financial trading reviewa scam or legit broker market. Thanks again for your analysis and explanation regarding the massive amount of shorts and their upcoming dilemma. It makes me happy to watch market manipulation finally receive karma and if the big players in these shorts do suffer some big losses on silver, may perhaps be the start of the contagion that leads to my long awaited correction for the Fed manipulated SPX.
WallStreetSilver and the Silver Squeeze: What You Need to Know
Silver has long been prized for its intrinsic value and diverse range of industrial and investment applications. As a precious metal with unique properties, including conductivity, reflectivity, and antibacterial qualities, silver plays a vital role in various sectors, including electronics, solar energy, and healthcare. Additionally, silver has served as a store of value and a hedge against inflation and economic uncertainty, making it a popular investment choice for individuals seeking to diversify their portfolios. The silver discussion on Reddit was not all in favor of buying the metal and related equities, with some users arguing that the “silver squeeze” was an attempt to distract from the trading in GameStop and others. Other posts were in favor of bidding up silver, and one user on Friday night referenced the Hunt brothers’ attempt to corner the silver market in 1980. That follows a 6% rally last week when some posts on the WallStreetBets group on Reddit called for betting on silver as a way to hurt big banks they believe are artificially suppressing prices.
During the inflationary period in the 1970s, William Hunt, Lamar Hunt and Nelson Hunt set out to corner the market on silver. There’s a thought among those in the community that market manipulation has purposefully kept the price of silver down. And while this may seem like an over-the-top claim, it’s hard to deny the facts of what happened on what has become known as the “Silver Raid Day” in February 2021. The long-term gold-to-silver ratio chart reveals that silver is currently significantly undervalued compared to gold, indicating that silver has much more room to rise in order to catch up. If the ratio were to revert to its historical average of 52.8 since 1915, even without any increase in gold’s price, silver would be valued at a respectable $51.55 per ounce.
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The story of silver price suppression by major financial institutions reads like a financial thriller, yet it’s documented fact rather than fiction. For decades, a small group of powerful banks has maintained massive short positions in silver, effectively acting as a cartel to control and suppress prices. This isn’t conspiracy theory – eurcad=x interactive stock chart it’s evidenced by multiple regulatory investigations, lawsuits, and eventual settlements.
WallStreetSilver is right about short selling having a major effect on the price of any asset. After all, many of those “short” on silver are the same ones who produce the metal for retail use. For a while in February, silver was the talk of the town in the precious metals world. Internet searches related to buying gold had long dominated similar searches for silver. One look at Google Trends, though, shows that silver overshadowed the yellow metal for an entire week. It’s a well-known fact that silver and gold can help you hedge against inflation.
In 2023, the deficit reached 184.3 million ounces, with an even larger shortfall of 215.3 million troy ounces projected for 2024. The silver deficit in recent years has rapidly depleted above-ground supplies, tightening supply even further. This shrinking supply will intensify the impending silver short squeeze, driving an even more dramatic price surge. For a deeper dive into the sensible guide to forex silver’s bullish fundamentals, be sure to check out my article from earlier this year.
Gold price sharply up on safe-haven demand, bargain hunting
Given the current size of their short position, bullion banks face nearly $200 million in losses for every dollar increase in the price of silver. Now, just imagine what will happen as silver climbs by $5, $10, $20, and beyond from this point. There are rumblings of a potential “silver squeeze” ahead as Reddit traders attempt to replicate last week’s GameStop GME short-squeeze in the silver market.
