Editor’s Note: With so much market volatility, stay on top of the news of the day! Stay up to date in minutes with our quick summary of today’s must-read news and expert opinions. Sign here!
(Kitco News) – Investors’ unprecedented interest in silver continued over the weekend, spreading across the physical market with many gold dealers unable to keep up with demand.
After creating huge price reductions in stocks like Gamestop, Blackberry and AMC, retail investors mobilized on social media began to focus on the silver market. Reddit’s Wall Street Bets has been one of the leaders of the organized crowd with his subreddit discussion: ‘The world’s largest $ SLV Silver $ 25 to $ 1000 short squeeze.’
The mobilization of retail investors in the silver market created an impressive movement for the precious metal. March silver futures prices closed Friday at around $ 27 an ounce, up nearly 6%.
In anticipation of a massive opening on Sunday night, retail investors have been busy buying physical gold bars over the weekend. Many gold dealers have had to stop processing orders online due to unprecedented demand in the face of price uncertainty.
APMEX, JM Bullion and SD Bullion are all silver-free at the moment.
So, if anyone wonders if @wallstreetbets (#Reddit) has the ability to impact the #silver market, dealers running out, & 34 million $ SLV actions being added on Friday are the answers that matter. pic.twitter.com/4fE0X2ohoM
– ArcadiaEconomics-Squeeze the Silver Shorts! 🥈🏝🍾 (@ArcadiaEconomic) January 31, 2021
Although silver saw some substantial gains in the past week and may have higher prices as retail investors continue to accumulate in the market, more and more analysts are warning investors to be careful of this momentum and volatility.
In an interview with Kitco News on Friday, Peter Hug, director of global trade at Kitco Metals, said that while there is a wide offer of larger silver investment products, the COVID-19 pandemic has created a shortage of coins and bars smaller, so this resurgence in demand is putting a lot of pressure on the physical market.
He added that, fundamentally, he expects silver prices to rise, investors need to be careful in the current environment.
“I think the $ 27 gold offers long-term value, but I think investors need to be careful when pursuing history,” he said.
Other market analysts are also sharing the same sentiment. Ole Hansen, head of commodity strategy at Saxo Bank, said that although silver made some significant gains last week, the film was not out of the market’s average volatility. He added that investors and traders should still keep an eye on key technical levels, with strong resistance at around $ 28 an ounce.
“Silver prices have made a big change, but the price action hasn’t broken any major trends yet, so we need to wait and see how much momentum this market has,” he said.
Although silver has room to rise in the short term, Hansen said he does not see a positioning short enough to create a tightening. Hansen added that he is optimistic about silver; however, he said it would be difficult for the market to keep gains from gold prices below $ 1,900 an ounce.
Legal Notice: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes. It is not a request to make any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article are not responsible for losses and / or damages arising from the use of this publication.