New York—The price of silver has spiked over the last few days, and it could be due to a new focus from Reddit.
It was the website’s
“WallStreetBets” forum that sent GameStop, AMC, and other shorted stocks skyrocketing last week in a move designed to make a statement to hedge funds and Wall Street.
Now, the silver price has jumped to
an eight-year high, and some reports are saying the group is behind the growth there too.
Last week,
a thread on the website started the conversation about a “short squeeze” on the silver market to drive the price up closer to where the author thought it should be given a severe supply deficit and high demand. The squeeze would be yet another way to hurt the banks the Reddit group alleges are suppressing prices.
Soon after, #silversqueeze started trending on Twitter.
CNN Business reported that some believe the movement was actually
coordinated by hedge funds.
Regardless, the silver price has gone up.
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It jumped from a daily average of $25.21 per ounce on Thursday to $27.42 per ounce the following day, according to Kitco. It reached a high of $30.51 on Monday before settling at $28.55 at the close of the market.
Numerous reports also noted the fervor spread to the
share prices of silver mining companies and physical demand, with numerous bullion suppliers reporting pauses on online orders amid shortages of coins.
The Silver Mountain, for example, said the following on its website: “Due to extreme market volatility we cannot accept any new orders at this moment. We will hopefully re-open on Monday in the afternoon.”
APMEX, too, said “Due to the increased volume of orders, we are currently expecting a 1-3 day delay in processing times.”
The company’s CEO said
in a statement posted to its website about recent activity that the ratio of silver ounces sold per day in the last week ran about two times its average demand earlier in the week and closer to four times by the end of it.
Once markets closed on Friday, he added, demand was “as much as six times [as on] a typical business day and more than 12 times a normal weekend day.”
There are some who don’t attribute all, or even any, of the recent movement in silver price to the Reddit warriors.
The Associated Press quoted Boris Schlossberg of BK Asset Management as saying: “The asset is traded by a variety of institutional players, and it is very likely that those parties have joined the move to push the metal higher.”
Meanwhile Jeff Christian, managing partner of CPM Group, said in
a recent video that Reddit has little to do with it, noting factors like political turmoil and concerns about COVID-19 as driving factors behind the rising price.
Others also note the situation around the silver market is very different than that of GameStop.
Unlike GameStop and “other unloved stocks” WallStreetBets targeted, silver has been
performing well of late, with many investors and analysts bullish on the market.
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the metal’s price will average around $28.60 in 2021.
Whether the metal will continue its recent rise and for how long remains to be seen, as does the effect on jewelers working with the metal.
Designer Martha Seely said aside from her “Transition” and “Windswept” lines, silver is always a tough sell. Add the sudden jump in price and its potential to continue, and the situation could make it even harder for her to sell her silver jewelry, she told National Jeweler.
She said despite the cost of gold, it’s still where most of her sales take place.
“People expect their silver jewelry to cost very little,” she said, noting they might not feel like they’re getting their money’s worth with higher prices.
With the price jump in mind, she will have to decide how much silver jewelry to keep making.
