This craze was ignited last week.
Last week, users of WallStreetBets began to encourage each other to buy silver on the forum, saying that banks have been artificially lowering the price of silver to cover up the shortage of physical supply. The post said, what is this? The world's biggest short squeeze? Silver should be 1000 instead of $25. At the same time, it is pointed out that the silver and gold markets are one of the most manipulated markets on earth, and banks are manipulating gold and silver to cover up the real inflation level. In contrast, silver is the best way to hedge against inflation.
In fact, in the past weekend, the enthusiasm of investors has been ignited, and the spot has become the target first. The platform includes money market, SD gold and silver, JM gold and silver, Apmex, etc. A moratorium on the sale of silver products has been announced. AMPEX announced that it could not accept large orders because of the unprecedented demand for silver physical products.
In the Asian market on Monday, silver opened sharply higher by more than 5%. Retail investors then poured into the Ishares Silver Trust, the world's largest silver ETF, pushing it up by 9%. Hekla Mining, a silver stock, closed up 28.3%, while Pan American Silver rose 12. 1%.
Mohamed El-Erian, chief economic adviser of Allianz, said that this is a very different goal, which can make the silver market fluctuate, indicating that everyone should take the technology (behind the transaction and platform) seriously. Carsten Fritsch, a commodity analyst at Commerzbank, thinks it is inconceivable that such a thing should happen in such a serious and huge market as silver. I completely underestimated this (the power of retail investors). ?
Interestingly, not all discussions about silver on WSB support buying silver and related stocks, but many users think it is a proposal? Silver extrusion? It's to distract GameStop and other stock trading.
Opportunity or risk
In addition to short squeeze, retail investors' optimism about silver prices also includes: silver is widely used in solar panels and other applications, while the new energy industry is in an explosive period. Ipek Oz Caldes Kaya, a senior analyst in UBS Group AG, believes that the rapid rise of silver today may be more rational than that of GameStop and AMC, but it is likely to be short-lived.
The ratio of gold to silver is an important reference factor. Ozkadskaya said that the price of gold rose to an all-time high last year, but silver did not follow up effectively. The ratio of gold to silver once broke through the 90 mark, much higher than the historical average of 60. If the price of gold is stable around 1800 USD/oz in the future, what about the price of silver? May fluctuate within the range of 30-32 dollars? .
The surge in silver has led to an active metal market. Platinum rose by 4%, and palladium, nickel, tin, aluminum and other varieties also rose to varying degrees. Eugen Weinberg, head of commodity research at Commerzbank, predicted that this buying spree of retail investors may last for some time and push the overall commodity market to rebound. ? Due to the excess liquidity in the financial system, bubbles may appear not only in the silver sector, but also in commodities and other asset classes. ? He said.
Similar to silver, investors can now buy various linked metal targets through ETFs. Wimbledon/Greg believes that investors may also turn to larger markets in the future, such as crude oil.
Bernard Dahdah, precious metals analyst at Natixis, is relatively cautious. He said in his report that the new interest in silver may damage the long-term potential of this precious metal. ? Supporters on Reddit have a misconception that gold and silver are short-selling banks, but they are actually just trading spreads. Two factors are beyond the influence of retail investors: 1) dollar financing problem; 2) physical delivery. In addition, the impact of the rising silver price is that the Chicago Mercantile Exchange (CME) may be forced to raise the margin of this precious metal, which may force some investors to withdraw from the market. ?