Silver squeeze! Should I buy silver today? The Motley Fool UK


The massive reduction in silver used in American coins is a major reason behind this decrease. The amount that most federal treasuries now hold is negligible. If the U.S. government suddenly had a need for silver at its 1970 levels, they’d have to purchase over 300 million ounces to meet it. Gamestop and AMC certainly dominated news in the investing world during the first half of 2021. If you paid attention to what was happening on Reddit, though, you likely also heard of WallStreetSilver and the silver squeeze. Thereafter, the WallStreetBets community decided to turn their sites towards the silver market in an attempt to raise the price of a market that has long been rumored to be intentionally suppressing prices.

  1. This means they are betting that the price of silver will fall.
  2. J.P. Morgan Chase is one of the largest traders of precious metals, so the Reddit user mentioned taking on the banking giant.
  3. What it proved, however, was that the “higher ups” could change the rules.
  4. For instance, GameStop’s market cap was $1.4 billion in mid-January, but this increased 16 times over when Reddit traders started to talk up the stock.
  5. Reddit retail traders have once again taken a position against hedge funds and money managers.
  6. And even if you were to ignore all these facts, it’s impossible to overlook the dwindling supply of silver.

And while this may seem like an over-the-top claim, it’s hard to deny the facts of what happened on what has become known as the “Silver Raid Day” in February 2021. For now, I am watching and waiting to see if silver can close decisively above $30. I’ve been very optimistic about the outlook for safe-haven assets like gold and silver.

Their actions caused the price of silver to rise from $6.08 per troy ounce at the beginning of 1979 to $49.45 just one year later. In the end, their investments in futures contracts were their undoing. There’s a thought among those in the community that market manipulation has purposefully kept the price of silver down.

All from GameStop short squeeze

And even if you were to ignore all these facts, it’s impossible to overlook the dwindling supply of silver. Scrolling through the many threads in the Reddit group reveals what one might expect from any online community. There are memes, videos, stories and more than a few opinions on the greatness of silver. In the early part of 2021, though, it became more than just a typical Reddit gathering. 3D illustration of silver bullion bars over a blue background with growing chart.

The surge in volume is circled in red, while the average true range (ATR) indicator – which depicts an average of daily price movement – also peaked. The Motley Fool UK has no position in any of the shares mentioned. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. During the turbulent market conditions of 2008, when gold prices gained overall, the leading gold miners index (the HUI) lost nearly 30% of its value. Precious metals shine when measured over an entire inflation cycle, which can last years or even decades.

Silver suppliers started seeing an increase in orders before February, but on February 2nd, something big happened. People began buying silver and pouring money into SLV (iShares Silver Trust). ” emojis are certainly exciting, they’re not really the crux of what’s going on in the movement. Many of those involved say they want nothing more than for the price of silver to return to a fair and accurate level.

Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors. There are rumblings of a potential “silver squeeze” ahead as Reddit traders attempt to replicate last week’s GameStop GME short-squeeze in the silver market.

As a long-time believer in hard assets such as gold and silver, that is a thesis that I can get excited about (unlike GameStop, which is extremely overvalued). The idea behind the “silver squeeze” thesis is that big banks and hedge funds currently have massive short positions in the silver market for the purpose of suppressing the price of the precious metal. According to this theory, if enough small investors buy into the silver market, the big banks and hedge funds will be forced to cover or buy back their short positions, which would send the price of silver soaring. Reddit retail traders have once again taken a position against hedge funds and money managers.

The First Silver Squeeze (01 Feb

A user in the WallStreetBets forum posted about an attempt to create a short squeeze on silver futures. The value of your investments can go down as well as up and you may get back less than you put in. Tax treatment depends on your individual circumstances and may be subject to future change. And the iShares Physical Metals Physical Silver ETC (ticker SSLN) has just shot up into the top 10 most viewed investments on the Hargreaves Lansdown website.

As this happens, it’s easy to foresee a significant increase in the price of silver. Many Wall Street insiders even bet that this will take place in the near future. Regardless of what ends up happening, there’s no denying that WallStreetSilver has forever changed the precious metals market. The superimposed orange line depicts the price of the continuous silver futures contract, which witnessed a spike but failed to raise prices significantly, as was expected.

Wall Street Silver and Reddit

So retail investors, driven by Reddit and social media, are piling cash into GameStop shares. The monthly silver chart shows the $22 to $30 trading range along with other likely resistance levels at $35, $45, and $50 that formed at prior peaks in 2011 and 2012. If silver can close above $30 in a convincing manner, the next price target to watch is $35 and so on. Speaking from a technical perspective, silver prices are extremely overbought. The Relative Strength Index on the daily time frame has reached near $70, which means a pullback is likely.

The person also noted silver stocks available to retail investors—First Majestic Silver Corp and the iShares Silver Trust ETF. At Silver Gold Bull, our content is researched, written, edited and reviewed by a team of financial experts with decades of experience in the Bill williams awesome oscillator precious metals industry. With each piece we write, we bring our own personal experience and expertise, while combining that with today’s leading research and data. Our ultimate goal is to help extend our award-winning customer service to our educational content.

Is the attempt to force a “silver squeeze” on the futures market viable?

The silver price — so the theory goes — has been artificially held down by people (hedge funds, institutions, etc.) who ‘short’ silver. This means they are betting that the price of silver will fall. WallStreetSilver is right about short selling having a major effect on the price of any asset. Does this necessarily mean a massive conspiracy is taking place? After all, many of those “short” on silver are the same ones who produce the metal for retail use. At one point, the billionaire brothers owned one-third of the world’s silver supply.

What it proved, however, was that the “higher ups” could change the rules. Blackrock’s BLK iShare Silver Trust, which represents the largest silver ETF, saw an unprecedented inflow on Friday.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Some of these were only temporary measures, and many directly targeted the Hunt brothers. Whether these actions were appropriate – many of which received government support – remains up for debate.


Please enter your comment!
Please enter your name here