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Silver prices have risen 15 percent since they closed Wednesday after small traders bought in droves, following a post on Reddit calling on users to buy heavy metals to challenge powerful hedge funds. Wall Street in a strange trade battle.
The Reddit-fueled share purchase took silver up 7 percent to $ 28.99 an ounce, its highest value since mid-August.
However, retail sites and coin selling sites have warned customers that there could be delays in meeting the unprecedented growing demand for silver bullion and coins.
This came after shares in video game retailer GameStop rose 1,700 percent from December, as Redditors increased the value of the video game retailer.
It all started when small traders rebelled against large institutional investors who had made market bets on GameStop stock that it would fall further. The volunteer army of social media investors came together to call out short sellers looking to profit from losing brands and the #silversqueeze trend on Twitter.
Reddit users on the WallStreetBets forum said that big banks are artificially suppressing silver prices and targeted the iShares Silver Trust ETF (SLV), the largest silver exchange-traded fund, to hurt the big players on Wall Street. .
Demand for silver products forced retail sites to post warnings over the weekend, saying they would not take any more orders due to huge demand.
“Due to the unprecedented demand for physical silver products, we are unable to accept additional orders for a large number of products until global markets open Sunday night,” said APMEX, which is believed to be the online retailer of world’s largest precious metals, on its website. .
Unlike GameStop, which was trading at less than $ 5 five months ago, and other stocks that WallStreetBets was betting on, silver growth has remained strong over the past year.
“It is not surprising to see that the sharp and abrupt rebound in consumer demand overwhelms the physical supply of silver coins held by traders in the short term,” CNN quoted Ryan Fitzmaurice, commodity strategist at Rabobank, as saying.
The latest events are an example of how large investors can suffer losses at the hands of small traders.
Melvin Capital, a top Wall Street hedge fund that was embroiled in the trade battle with GameStop, lost 53% in January, according to media reports.
