Silver futures jumped 11% on Monday to about $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 the shares would 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 repressed 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.
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, said that, “Due to extreme market volatility we cannot accept any new orders at this moment,” adding it hoped to reopen by the afternoon.
Demand overflowed into Australian mining stocks shares, even those that have yet to start producing any of the metal. Silver Mines Ltd., which is working on undeveloped deposit, jumped 50% on Monday, while other mining shares on the Australian Stock Exchange saw double-digit gains.