Silver miners soar as Reddit traders pile into the precious metal
Silverminers First Majestic Silver, Pan American Silver, Wheaton Precious Metals, and more are all rising on Monday.
- The Silver spot price jumped 11% Monday morning before paring gains.
- Precious metals broker
APMEXsaid it received 12 times the normal demand for silver last weekend.
Shares of silver miners climbed on Monday as the spot silver price jumped 11% to an eight-year high before paring gains.
Silver has seen a sharp rise in prices as Reddit traders on the WallStreetBets forum pile into the precious metal.After being restricted from trading certain popular stocks by brokerages, some members of the forum have turned to silver as their next potential short-squeeze. The sudden interest in the metal caused prices to skyrocket, and as silver goes, so do its miners.
In particular, the forum isn't too pleased with Kenneth Griffin's Citadel after the firm injected cash into Melvin Capital, a hedge fund that lost about 53% of its value after a short-squeeze on shares of GameStop hurt results."CITADEL IS THE 5TH LARGEST OWNER OF SLV. IT'S IMPERATIVE WE DO NOT 'SQUEEZE' IT." one WallStreetBets user wrote on Sunday. Citadel Advisors LLC owned about 6 million shares of the iShares Silver Trust as of Sept. 30, equivalent to a 0.93% stake, per Bloomberg.
Even if Reddit does target silver, it's not clear the online community can have the same effect on precious metals as it did with individual stocks.
"It's a very different target, but the fact that you can move silver, such a large market, is an indication to everybody that they have to take these new technicals seriously," said
The recent Reddit push isn't the only bullish news for miners, however. Dennis Karp, CEO of silver miner Manuka Resources, said he sees solid fundamentals, EV use cases, and rising inflation expectations helping silver move higher.
"Investor demand last year was three times the value of previous years, and the last five years of mined silver production have all been lower than the previous years," Karp said. "Its use in EVs is substantial, and in photovoltaics, 20 grams of silver goes into each solar panel."It's unclear whether Reddit traders can drive a sustained rally in silver prices, but for now, they are clearly moving demand. Precious metals broker APMEX said demand for silver was 12 times higher than normal over the weekend.
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