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Silver surges as Reddit army turns to commodities Silver surges as Reddit army turns to commodities
(32 minutes later)
Silver prices leapt to a five-month high on Monday amid social media calls to buy the metal and emulate the frenzy that drove up GameStop shares. Silver prices leapt to a five-month high on Monday, amid social media calls to buy the metal and emulate the frenzy that drove up shares in the US video games retailer GameStop .
Shares in a handful of smaller Australian mining firms surged as small-time traders bought en masse.Shares in a handful of smaller Australian mining firms surged as small-time traders bought en masse.
Argent Minerals, Boab Metals and Investigator Resources leapt more than 15%. Argent Minerals jumped 60% while Investigator Resources was up 47%.
Coin-selling websites also reported unprecedented demand and flagged delays in delivering silver.Coin-selling websites also reported unprecedented demand and flagged delays in delivering silver.
UK trading platform IG stops new GameStop tradesUK trading platform IG stops new GameStop trades
GameStop: Who is winning the market battle?GameStop: Who is winning the market battle?
Global watchdogs on alert as GameStop frenzy growsGlobal watchdogs on alert as GameStop frenzy grows
Silver rose by more than 10% to $29.74 an ounce, its highest value since mid-August.Silver rose by more than 10% to $29.74 an ounce, its highest value since mid-August.
The moves are the latest example of small-time traders buying stocks and other assets that large Wall Street funds bet against, resulting in large losses for major investors.The moves are the latest example of small-time traders buying stocks and other assets that large Wall Street funds bet against, resulting in large losses for major investors.
Some users in the Reddit forum Wallstreetbets argued that silver is a heavily manipulated market, and a surge in the silver price could hurt large financial services companies. Some users in the Reddit forum Wall Street Bets argued that silver is a heavily manipulated market, and a surge in the silver price could hurt large financial services companies.
"Think about the Gainz. If you don't care about the gains, think about the banks like JP Morgan you'd be destroying along the way," said Reddit user RocketBoomGo, in a widely circulated post."Think about the Gainz. If you don't care about the gains, think about the banks like JP Morgan you'd be destroying along the way," said Reddit user RocketBoomGo, in a widely circulated post.
The recent GameStop surge, which was also fuelled by amateur investors, was also seen as a revolt against large institutional investors.The recent GameStop surge, which was also fuelled by amateur investors, was also seen as a revolt against large institutional investors.
Unlike GameStop, which was a loss-making gaming retailer that many investment funds had bet against, Silver has seen strong growth over the past year. Unlike GameStop, which was a loss-making gaming retailer that many investment funds had bet against, silver has seen strong growth over the past year.
WATCH: What's been going on at GameStop?WATCH: What's been going on at GameStop?
"There is this curious situation now where the Reddit crowd has turned its sights on a bigger whale in terms of trying to catalyse something of a short squeeze in the silver market," said Kyle Rodda, an analyst at brokerage IG Markets in Melbourne."There is this curious situation now where the Reddit crowd has turned its sights on a bigger whale in terms of trying to catalyse something of a short squeeze in the silver market," said Kyle Rodda, an analyst at brokerage IG Markets in Melbourne.
"There's a lot of commentary on these platforms to pile in to the miners." "There's a lot of commentary on these platforms to pile into the miners."
Silver prices are up 15% since Wednesday's close, around the time when messages began circulating on forums such as Reddit encouraging users to buy the metal and drive up prices. Silver prices are up sharply since Wednesday's close, around the time when messages began circulating on forums such as Reddit encouraging users to buy the metal and drive up prices.
But Hussein Sayed, chief market strategist at FXTM, said influencing the price would not be as simple as it was with GameStop.
"Silver's market cap is in the range of $1.4 trillion to $1.6 trillion as opposed to GameStop's $1.5 billion before becoming the target of retail investors and a large proportion of the market is off-exchange."
He added: "Retail traders who are just following the herd and join the party late may accumulate huge losses and need to be more rational in their decisions."
Massive losses for MelvinMassive losses for Melvin
The latest surge comes as the damage to one Wall Street firm becomes clearer.The latest surge comes as the damage to one Wall Street firm becomes clearer.
Hedge fund Melvin Capital lost 53% in January, according to media reports. Hedge fund Melvin Capital lost 53% of its value towards the end of January, according to media reports.
However, the firm received commitments for fresh cash from investors in the last days of January, and ended the month with $8bn (£5.8bn) in assets after having started the year with roughly $12.5bn, according to Reuters. The firm received commitments for fresh cash from investors at the end of the month, leaving it with $8bn (£5.8bn) in assets, but that was still down from $12.5bn at the beginning of 2021, according to Reuters.
The firm had bet that ailing video game retailer GameStop's stock, which traded at less than $5 five months ago, would fall further. The firm had bet that GameStop's stock, which traded at less than $5 five months ago, would fall further.
But retail investors, comparing notes on social media platform Reddit, bought the stock and sent it higher to close at $325 on Friday.But retail investors, comparing notes on social media platform Reddit, bought the stock and sent it higher to close at $325 on Friday.