Silver prices rose sharply on Monday, reaching an eight-year high.
The increase may have been related to the online WallStreetBets community on Reddit, a group of retailers who were instrumental in the rise of GameStop last week.
Three experts broke it down.
Jim Cramer, host of CNBC’s “Mad Money,” discussed the complex nature of precious metals investing, which faces its own limitations as a resource.
“People need to realize that silver, although a precious metal, is mainly used for LEDs. It is widely used for cars, of course much for jewelry. If you take it away, you are talking about a market that is very There are only two stocks that are really invested. Can be … Pan American Silver has 17.5 million silver ounces, they didn’t deliver the amount they would like to do. They forecast 22.5 million this year, which is actually really big. The other one I think is that , say, worth the investment is Wheaton Precious Metals. The stock is big, they have about 120,000 in ounces a year that they want to release, and then everyone is really too small. Obviously people are using ETFs in silver I think they are mis-targeting to include it I think if you think the GDP is going to grow you might gain something in silver but it’s the GDP This is the first thing they are targeting and that has frankly a li mit om that there is not much silver. But at the same time, when used, it is not decorative. So that’s why you really need a stepping stone into business to make that invaluable. “
Mohamed El-Erian, Allianz’s chief economic adviser, linked the rise to the GameStop short squeeze and how the conflict between retailers and hedge funds might unfold.
“The fact that you can get people to look at silver and watch GameStop less, and therefore there is less concern that the hedge funds with a short position in GameStop will sell, which means that you can influence a lot of markets. So underestimate in the short term. the influence is not. What will happen, see, there is a big battle going on between three actors, not two. Three: the hedge funds who are short in GameStop, the retail investors who are tall, and the people in the middle. And the question where it goes next is who has the weakest hand? Who is going to fold first? Who will not be able to stay in that trade? Now, historically, that has been the retail investor. But the retail investors are now more organized. … If they can stay organized, they can even force the hedge funds to cover more But today you get the idea that they might not be able to stay organized So we’ll see. All that’s systemis ch is worrisome is whether it falls in termediary. That’s a very different matter than when the two sides of the trade fold. “
Joe Moglia, former CEO of TD Ameritrade, noted the growth and advancement of the private investor demographic.
“Schwab, Ameritrade, E-Trade, even Robinhood has the importance of the individual in mind. All the business we do with Ameritrade or Schwab is with individuals or financial advisors who work with individuals. So at the end of the day, the tools and the ability that the individual has today, [are] much bigger than they had five years ago, which was much bigger than what they had five years before. So if 2020 was the year in our country where we had a lot of turmoil, and everyone was looking at racial, political, sexual and equality, maybe 2021 is about the equality of individual investors and they have the tools and skills to be able to do these transactions from. They have the tools. They can learn the skills. But they need better education so that they understand the downside and their risk. “
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