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Before silver’s buying stampede, the Reddit frenzy also fueled the rise in GameStop, Dogecoin, and others.
On the 1st of February, the price of silver reached a five-month high amid the ongoing retail frenzy triggered by Reddit users. The iShares Silver Trust also recorded an unusual $944 million net inflow on the 30th of January. China Silver Group Ltd. surged 45% in Hong Kong, and Silver Mines Ltd in Australia climbed 49%. There are several posts and videos on Reddit suggesting that an increase in silver price would affect investors who have bets on silver falling.
Reddit Users Trigger Silver Price Increase
Recently, discussions on Reddit have been fueling the spike in selected stocks like AMC Entertainment (NYSE: AMC) and GameStop Corporation (NYSE: GME).
Reuters noted that spot silver had added 15% since the 27th of January, pushing its price to its highest since August 2020. Between the 27th of January and now, spot silver has added about 15% after jumping 7.4% to $28.99 per ounce in Asia.
Kyle Rodda, an analyst at brokerage IG Markets in Melbourne, commented on Reddit’s move towards silver. He said:
“The Reddit crowd has turned its sights on a bigger whale in terms of trying to catalyse something of a short squeeze in the silver market. This is their big, bold Moby Dick moment.”
The Reuters report revealed that silver mining stock also surged in China and Australia. Amid the silver rally, an online exchange for precious metals and bullion Money Metals uploaded an “EXTREME DEMAND ALERT” on its platform. Money Metals also added that it had limited orders between $1,000 and $10,000.
The global general manager at ABC Refinery in Sydney Nicholas Frappell noted that “buying” has been “sparked by this subreddit.” He added that the customers enjoy buying kilogram bars or smaller due to convenience.
The Perth Mint, Australia’s official bullion mint, also noted an increasing demand for silver in the US through online dealers.
A strategist at broker CMC Markets in Sydney Michal McCarthy commented on the impact of Reddit on the increasing stocks.”
“(The) gain in silver prices is a very solid lift… it certainly does suggest that the impact of messaging in social media is becoming much more relevant.”
GameStop and Other Retail Frenzy
Before silver’s buying stampede, the Reddit frenzy also fueled the rise in GameStop, Dogecoin, and others. On the 29th of January, Dogecoin pulled in an increase of 800% in 24 hours, recording an intraday high of $0.072330. At press time, Dogecoin is up 34.66$ to $0.03809.
An economist at Oversea-Chinese Banking Corp, Howie Lee, noted that it is important to acknowledge the purchasing power of retail investors.” He said that retail traders have proved that they have the power to affect the silver market. He, however, added:
“They may find it a bit harder to squeeze the silver market than they did with GameStop – the former is much bigger and more liquid – but the momentum looks like it rests with them at the moment.”
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