The silver price was seen surpassing its eight-year highs. Though, a sudden drop soon follows only in days interval. Analysts suggest the Reddit rally and social media might have partly contributed to people’s interest to invest in silver, especially with how #silversqueeze trended on Twitter.
More people opt to invest in silver, imbalanced demand and stock fluctuate the silver price
On Tuesday, CNN reported that silver futures surpassed its eight-year peaks by jumping 13%. The surge follows the GameStop rally by Reddit’s WallStreetBets community. Accordingly, some of the community members also challenged to bet on silver. This was done to “hurt big banks they believe are artificially suppressing prices”, CNN quotes.
This great news didn’t last long. Noted from Bloomberg, spot silver slipped 2.4% since Friday due to the buying frenzy fuelled by a Reddit community. Accordingly, retail sites are struggling to meet the skyrocketing demands in silver bars and coins. Everett Millman of Gainesville Coins in Florida told Bloomberg that it is “partly because there’s suppliers who have really depleted their inventories of a lot of popular products like silver eagles and the U.S. Mint isn’t going to have many more until probably the middle of the spring.”
Silver investment: will it actually last?
CNN suggests that silver futures might face a different future from GameStop and other scrutinized stocks. Hedge funds and other institutional investors also started to go bullish on silver futures. This leveraged the precious metal trading near to multi-year highs.
Rabobank’s commodities strategies, Ryan Fitzmaurice wrote to CNN, “It is a dramatically different market setup.” To which he further continued, “I am not sure how well this new Reddit trading strategy will fare in futures markets and especially the notoriously volatile commodity markets.”
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