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A one kilogram gold bar sits above silver bars at London Gold Investments bullion dealers in this photograph arranged in London, UK on April 4, 2013.
Simon Dawson | Bloomberg | Getty Images
Silver futures soared on Sunday night as the Reddit-fueled boom in heavily sold stocks appears to spill over into the metals market.
Silver futures rose 8% shortly after the opening of the futures market, marking the biggest movement in futures contracts since at least 2013. Contracts were last traded up 6 , 8%.
The sharp upward move builds on gains for silver and silver-linked stocks at the end of last week. Silver mining stocks Coeur Mining and Pan American Silver rose 16.9% and 14.7%, respectively, on Thursday and Friday. The iShares Silver Trust jumped 6.7% in those two sessions.
The spike in silver demand appears to be linked to retail traders in the Reddit WallStreetBets forum, which has helped boost trading activity in heavily sold stocks like GameStop and AMC Entertainment in recent weeks.
The forum had several active threads dedicated to money Sunday evening. The phrase “#silversqueeze” was also buzzing on Twitter.
The silver movement has been touted by investors who are bullish on cryptocurrencies like Bitcoin, who view new digital assets in part as replacements for traditional metals.
Cameron Winklevoss, co-founder of cryptocurrency firm Gemini, said on Twitter that “the ramifications of a #silversqueeze cannot be underestimated. If it is revealed that there are more paper claims on silver than on real money, not only would the payoffs be huge, but gold would be next. #Bitcoin correct that. “
The dramatic spikes in GameStop and other heavily shorted stocks were in part due to a short squeeze, a phenomenon where investors who bet against a stock are forced to buy stocks to cover their positions as the name grows. .
Melvin Capital, one of the hedge funds that initially had short positions on GameStop, lost 53% in January.
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