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(Kitco News) – Unprecedented investor interest in silver continued throughout the weekend, spilling over into the physical market, with many bullion dealers unable to keep up with demand.
After creating massive short presses on stocks such as Gamestop, Blackberry and AMC, retail investors mobilized on social media began to focus on the silver market. Reddit’s Wall Street Bets was one of the leaders of the organized crowd with its subreddit discussion: “The World’s Biggest Short Squeeze $ SLV Silver $ 25 to $ 1000.
The mobilization of retail investors in the silver market created an impressive movement for the precious metal. Silver futures prices in March ended around $ 27 an ounce on Friday, for nearly 6%.
In anticipation of a grand opening on Sunday night, retail investors have been busy buying physical bullion this weekend. Many bullion dealers have had to stop processing orders online due to unprecedented demand amid price uncertainty.
APMEX, JM Bullion and SD Bullion are all strapped for cash at the moment.
So if anyone is wondering if @wallstreetbets (#Reddit) has the capacity to have an impact #money market, dealers are running out and 34 million $ SLV actions added on Friday are the answers that matter. pic.twitter.com/4fE0X2ohoM
– ArcadiaEconomics-Squeeze the Silver Shorts! 🥈🏝🍾 (@ArcadiaEconomic) January 31, 2021
Although silver saw substantial gains last week and could see higher prices as retail investors continue to pile into the market, more and more analysts are warning investors to watch out for this. momentum and this volatility.
In an interview with Kitco News on Friday, Peter Hug, global business director for Kitco Metals, said that while there is an abundant supply of larger silver investment products, the COVID-19 pandemic has created a coin shortage. and smaller bars, so this resurgence in demand is putting great pressure on the physical market.
He added that basically he expects the prices of silver to rise, investors should be cautious in the current environment.
“I think $ 27 gold offers long term value, but I think investors need to be careful about continuing the story,” he said.
Other market analysts also echo the same sentiment. Ole Hansen, head of commodities strategy at Saxo Bank, said while silver made significant gains last week, the film was not outside of average market volatility. He added that investors and traders should always keep an eye out for major technical levels, with strong resistance around $ 28 an ounce.
“Silver prices have made a big move, but price action has yet to break major trends, so we have to wait and see the momentum in this market,” he said.
While the silver has room to rise in the short term, Hansen said he doesn’t see enough short positioning to create a major squeeze. Hansen added that he was bullish on the money; however, he said it will be difficult for the market to maintain gains with gold prices below $ 1,900 an ounce.
Warning: 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 for informational purposes only. This is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.
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