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June 19, 2021
Silver prices: Big surge as Reddit army targets precious metals

Silver prices: Big surge as Reddit army targets precious metals

Silver futures surged as much as 8.5% to above $29 Sunday evening, touching five-month highs. That follows a 6% rally last week.

In more recent trading, silver futures were up 6.5%.

People on WallStreetBets set their sights on silver and the iShares Silver Trust ETF (SLV) last week, with some suggesting it could be a way to hurt big banks they believe are artificially suppressing prices.

“SLV will destroy the biggest banks, not just some little hedge funds,” one WallStreetBets user wrote.

Another claimed JPMorgan Chase has been “suppressing metals for a long time. This should be epic. LOAD UP.”

Several noted that JPMorgan (JPM) paid a record $920 million fine last year to settle charges that it engaged in manipulative trades of futures tied to precious metals as well as Treasuries.

The Winklevoss twins, who famously sued Facebook’s Mark Zuckerberg and were early backers of bitcoin, both tweeted support for the push by WallStreetBets into silver.

“The #silversqueeze is a rage against the machine,” Tyler Winklevoss tweeted.

“If silver market is proven to be fraudulent, you better believe gold market will be next,” Cameron Winklevoss tweeted.

Leading retail sites posted warnings over the weekend that they faced heavy demand.

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“Due to unprecedented demand on physical silver products, we are unable to accept any additional orders on a large number of products, until global markets open Sunday evening,” APMEX, which calls itself the world’s largest online retailer of precious metals, wrote in a notice atop its website.

SD Bullion warned that “due to unprecedented silver demand” it would also be unable to accept orders until Sunday evening. Similar notices were posted by Money Metals and other websites.

“It’s not surprising to see the sharp and abrupt uptick in consumer demand overwhelm the physical supply of silver coins held by dealers in the short term,” Ryan Fitzmaurice, a commodities strategist at Rabobank, told CNN Business in an email.

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.

“It is a dramatically different market setup,” Fitzmaurice said. “I am not sure how well this new Reddit trading strategy will fare in futures markets and especially the notoriously volatile commodity markets.”