Photographer: Luke Sharrett / Bloomberg
Photographer: Luke Sharrett / Bloomberg
Silver rose during the week’s opening, with futures above $ 29 an ounce within minutes, while the Reddit-inspired frenzy that spilled stock markets into commodities last week.
The extraordinary peak came after shopping sites were overwhelmed by the demand for bars and coins over the weekend. Outlets including Apmex, the Walmart of precious metal products in North America, said they could not process orders until Asian markets open due to unprecedented consumption.
“It was crazy – over the weekend we saw about three weeks of account opening in just a few days,” said John Feeney, business development manager at Guardian Vaults in Sydney. “Silver peaked out in the open this morning when all that volume hit the market over the weekend.”
Silver futures were about to expire Up 6% last week after a jump Thursday and Friday amid Reddit-esque enthusiasm from hordes of retail investors. Unlike the beat up stocks that target the stock market, including GameStop Corp. Silver has performed well over the past year, up more than 50% as the dollar declined, and based on expectations for a global recovery from the pandemic.
The most active futures gained a staggering 8.7% to $ 29.25 an ounce on the Comex, the highest price since September, and traded at 7:51 am in Singapore at $ 28,855. Gold futures were up a whopping 1.1% to $ 1,870 an ounce
“Since there are many retail investors interested in and aware of this story – and that they are likely to be motivated and committed – the price could go further,” said Nicholas Frappell, general manager at ABC Bullion in Sydney.
Responses to silver appeared on the Reddit forum r / wallstreetbets last week. People started urging each other to join the iShares Silver Trust, the metal’s largest exchange-traded commodity, says banks have kept silver prices artificially low and mask a real shortage of supplies.
Still, some of the largest Wall Street banks have been positive on the outlook for silver in recent months amid a broad commodity rebound. Goldman Sachs Group Inc. described it as the “preferred precious metal,” according to a January 27 note with a target price of $ 30 an ounce.
In addition, money managers have had a net long position in silver since mid-2019, according to futures and options data from the Commodity Futures Trading Commission. In the week until January 26, the net bullish bets on the metal were high for three weeks.
Silver tends to be more volatile than its much more expensive sister metal, gold, and often shows sharp price swings. In addition to its role as a speculative asset and storage of value, it has industrial applications, including in solar panels.
– Assisted by Jake Lloyd-Smith, Matt Turner, Yvonne Yue Li, Ranjeetha Pakiam and James Thornhill