Silver prices soared on Monday, reaching the biggest high in eight years.
The increase was possibly connected to the WallStreetBets online community on Reddit, a group of retail merchants who played an important role in the rise of GameStop last week.
Three experts analyzed it.
Jim Cramer, host of CNBC’s “Mad Money” program, discussed the complex nature that accompanies investment in precious metals, which faces its own limits as a resource.
“People need to recognize that silver, although it is a precious metal, is mainly used for LEDs. It is used a lot for cars, obviously a lot for jewelry. When you take it off, you are talking about a market that is very small. There are only two stocks that are really investable … Pan American Silver has 17.5 million ounces of silver, they were unable to deliver the amount that they would like to make. They are forecasting this year to make 22.5 million, that is actually The other one that I think is, say, worthy of investment is Wheaton Precious Metals. The stock is on the rise, they have about 120,000 ounces a year they intend to release, and then everyone is really very small. people are using ETFs in silver. I think they are misguided in adopting them? I think if you think GDP is going to grow, you may have something gaining in silver, but it’s GDP-oriented. This is the first thing that they target that, francame However, there is a mit because there is not much silver out there. But at the same time, when it is used it is not ornamental. Therefore, you really need a breakthrough in business in order to make this invaluable. “
Mohamed El-Erian, chief economic advisor at Allianz, related the rise to GameStop’s price reduction and how the conflict between retail traders and hedge funds could unfold.
“The fact that you can make people look at silver and in the process, they look less at GameStop and because of that, there is less concern that the hedge funds that have GameStop sold means that you can impact many of the markets, so don’t underestimate the influence in the short term. As for what’s going to happen, see, there’s a big battle going on between three actors, not two. Three: the hedge funds that sell GameStop, the retail investors that they are long and people in the middle. And the question about where to go next, who has the weakest hand? Who will give up first? Who will not be able to stay in this exchange? Now, historically, this has been the investor But retail investors are more organized now … If they can stay organized, they can really force hedge funds to cover more. But today you have the notion that maybe they can’t stay organized. we will to see. The only thing that is systemically worrisome is if it falls short. This is a completely different matter than if the two sides of trade were to fold. “
Joe Moglia, former CEO of TD Ameritrade, watched the growth and demographics of retail investors.
“Schwab, Ameritrade, E-Trade and even Robinhood have the individual’s best interest at heart. All of the business we do with Ameritrade or Schwab is with individuals or financial advisors who are working with individuals. So at the end of the day, tools and the skill that the individual has today, [are] much greater than five years ago, and much greater than five years before. So if 2020 was the year in our country where we had a lot of upheavals and everyone looked at racial, political, sexual equality, maybe 2021 is about the equality of the individual investor and if they have the tools and skills to be able to execute those negotiations. They have the tools. They can learn the skills. But they need better education so that they understand the downside and the risk. “
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