Silver appears when GameStop Day traders move to other assets

The most actively traded silver futures closed up 2.1% to $ 25,922 in the troy ounce, after previously adding up to 6.7%, while the US listed shares of First Majestic Silver Corp.

AG 21.38%

, a mining company, closed the day up 21%. The iShares Silver Trust, a popular silver-traded fund linked to silver, has also grown.

Silver prices in general have been quieted in recent weeks, remaining in a tight trading range alongside other precious metals that were well below the multi-year highs it hit during a spike last summer. But Thursday’s gain at one point was pushing the metal close to its nearly eight-year peak.

The movements represent what some analysts call an inevitable move from day traders to other asset classes, after exaggerated gains in popular stocks, such as GameStop Corp.

GME -44.29%

and AMC Entertainment Holdings Inc.

AMC -56.63%

The moves captivated Wall Street, as individual investors contracted hedge funds that bet on the fall of these shares, and large fluctuations in the silver market could aggravate frantic trades.

A short squeeze occurs when short sellers borrow an asset, sell it and try to repurchase it at lower prices. If the asset price rises sharply, short sellers are forced to repurchase at higher prices to minimize their losses, being “squeezed” out of the market.

Analysts have claimed price manipulation in the silver market for several decades, including when regulators accused the Hunt brothers of raising prices in 1979 and 1980.

The Reddit post referred to the acceptance of JPMorgan Chase & Co., a major dealer in precious metals and the largest bank in the country. He also mentioned silver stocks, such as First Majestic and ETFs, which are accessible to ordinary investors. It is notable that silver futures also rose on Thursday because they are normally traded less frequently by individual investors.

Some notable bulls of precious metals were noticing the great oscillations. Peter Schiff, CEO of Euro Pacific Capital, said on Twitter that the move to silver shows that Reddit day traders are getting smarter because silver miners are good value.

“Silver stocks are really cheap and represent good investment value,” he said.

Write to Amrith Ramkumar at [email protected]