New York (CNN Business) – GameStop aside, the Reddit craze is spreading to the precious metal market.
Silver futures were up a whopping 8.5%, above $ 29, Sunday night, hitting a five-month high. This follows a 6% increase recorded last week.
Meanwhile, retail sites warned customers over the weekend that they would not be able to keep up with the growing demand for silver bars and coins. And “#silversqueeze” is trending on Twitter.
In more recent trading, silver futures were up 6.5%.
Silver, a new target for WallStreetBets
These moves are another example of the power of a group that has captivated Wall Street and small investors: WallStreetBets. The Reddit forum sent GameStop, AMC and other very modest stocks up last week, shaking up the markets and crushing some hedge funds that had bet against those stocks. Robinhood, the free ‘trading’ app, was criticized for restricting trading on GameStop and other stocks.
Last week, the folks at WallStreetBets set their sights on the iShares Silver Trust (SLV) silver and trust ETF, with some suggesting it could be a way to hurt big banks that they believe are artificially suppressing prices.
“SLV will destroy the biggest banks, not just some small hedge funds,” wrote a WallStreetBets user.
Another claimed that JPMorgan Chase has long “suppressed (prices of) metals. This should be epic. LOAD “.
Several pointed out that JPMorgan paid a record $ 920 million fine last year to eliminate fees for manipulative futures trades linked to precious metals and treasury bills.
Support from the Winklevoss twins
The Winklevoss twins, who sued Facebook’s Mark Zuckerberg and were bitcoin’s first lenders, tweeted their support for WallStreetBets’ offensive against silver.
“The #silversqueeze is a protest against machines,” tweeted Tyler Winklevoss.
“If the silver market is proven to be fraudulent, they better know the gold market is next,” tweeted Cameron Winklevoss.
Major shopping sites posted warnings over the weekend that they were dealing with high demand.
“Due to unprecedented demand for physical silver products, we will not be able to accept additional orders for a large number of products until global markets open on Sunday evening,” wrote APMEX, calling itself the world’s largest online retailer. World of precious metals, in a message at the top of their website.
Unprecedented demand
SD Bullion warned that “due to unprecedented demand for silver” it would not be able to take orders until Sunday evening. Money Metals and other websites have posted similar notices.
“It will not be surprising to see that the sharp and abrupt rebound in consumer demand will overwhelm merchants’ physical supply of silver coins in the near term,” Ryan Fitzmaurice, Rabobank’s commodities strategist, told CNN Business in an email. .
Unlike GameStop and other unwanted stocks targeted by WallStreetBets, silver futures have shown strength recently. Hedge funds and other institutional investors were bullish on silver futures and the precious metal traded near multi-year highs.
“It’s a dramatically different market configuration,” said Fitzmaurice. “I’m not sure how well this new trading strategy from Reddit will fare in the futures markets and especially in the notoriously volatile commodity markets.”