Is Silver the Next GameStop?
Yesterday. Silver prices hit the highest level in eight years to over twenty nine dollars and fifty cents per ounce the london bullion market association which is the silver market said that more than a billion ounces of silver was traded. Yesterday it's three times greater than the average from the end of two thousand twenty can louis c. of app max which is a dealer in precious metals coins boy in bars said yesterday on bloomberg tv that they had more volume in silver sales in the past three days than they had all of december and forty three percent of those orders from new customers were. Typically it's only fourteen to twenty percent of orders in a given day are from new customers. Adrian ash is director of research at bullion vault which also sells silver. Bullion said they had more customers yesterday than all of last february. Why is there this sudden interest in silver last week. We discussed wall street bets. The sub reddit and what was driving the price of game. Stop and other memes stocks. There were some post last week on wall street bets about silver being the biggest short in the world but there's post on all different types of topics but some of those posts because they're voted on in this forum made it to the top and then news organizations pick it up that that the wall street bet sub read. It was now focus on silver but then some on wall street No they're not promoting silver that there are proponents of silver taking advantage of the forum. So there was a lot of confusion over. Who's driving this increase in silver. But clearly it's happening. One commodities trader said about wall street bets that i'm beginning to think that they are being suckered by the silver scammers to try to get the price up today when i looked at wall street bets. There wasn't any of the top articles on silver. They appear to be a couple about diamonds but most was on gm's stock which fell over fifty percent this week here. We are with silver having spiked to its highest level in eight years. Today it's down to twenty seven dollars per ounce but the sudden interest news gives us an opportunity to look at silver the investment case for silver. And should we buy silver now. There are two primary ways to buy silver by it physical including coins or bars. We can also by silver through an exchange traded fund like the shares silver trust which owns physical silver or we can participate in these silver futures market. And we'll talk about how that works. A lot of these news articles reference. Some of the post on wall street bets about how silver is the biggest short in the world. And there'll be a squeeze and we're going to stick it to the banks that are short but still i really different than the short squeeze on game stop or some other stock like i talked about last week where you had hedge funds that were massively short game stop. There were more shorts than shares outstanding. And when the stock started to rise those hedge funds needed to buy back game stop stock so that they could close out their short position and stop losing money but if we look at the positioning of hedge funds and other speculators in the silver futures market. They're actually net long in other words positioned for silver to go up in price and they have been net long since two thousand nineteen. The natural times reported that analyst said bullion banks has hsbc and j. p. morgan did not have speculative naked short positions in silver. In if anything would make money by selling silver to exchange traded funds in helping minors hedge exposure bernard data an analyst texas that it's the wrong understanding of the market. It's trying to apply the same. Rationale is game stop but most of the market is long silver. The banks are going to make more profit and the silver buyers are indirectly sending their own money to them