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| Silver surges as Reddit army turns to commodities | Silver surges as Reddit army turns to commodities |
| (30 minutes later) | |
| Silver prices leapt to a eight-year high on Monday, amid social media calls to buy the metal and emulate the frenzy that drove up shares in 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 jumped 60% while Investigator Resources was up 47%. | 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. |
| Silver rose by as much as 11% to $30 an ounce, its highest value since 2013. | Silver rose by as much as 11% to $30 an ounce, its highest value since 2013. |
| UK trading platform IG stops new GameStop trades | UK 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 grows | Global watchdogs on alert as GameStop frenzy grows |
| 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 forums WallStreetBets and WallStreetSilver 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 forums WallStreetBets and WallStreetSilver 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. |
| However, reflecting the febrile atmosphere, some on Reddit alleged that "the Silver Squeeze" was secretly being coordinated by big Wall Street firms. | However, reflecting the febrile atmosphere, some on Reddit alleged that "the Silver Squeeze" was secretly being coordinated by big Wall Street firms. |
| The recent GameStop surge, which was fuelled by amateur investors, was also seen as a revolt against large institutional investors. | The recent GameStop surge, which was 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 into the miners." | "There's a lot of commentary on these platforms to pile into the miners." |
| Silver prices are up 20% since Wednesday, 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 20% since Wednesday, 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. | 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." | "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." | 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 Melvin | Massive 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% of its value towards the end of January, according to media reports. | Hedge fund Melvin Capital lost 53% of its value towards the end of January, according to media reports. |
| 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 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 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. |