Silver prices broke over $30 an ounce amid frantic retail trading sweeping the markets.
Silver’s upward trajectory can be traced back to the subreddit r/wallstreetbets. Could this be another battle in meme stocks vs. hedge funds saga?
The forum has been encouraging investors to pile into BlackRock iShares Silver Trust – the largest ETF that tracks silver. As a result, the ETF saw unprecedented inflows – a whopping $944m. The motive behind the fervor pitch for buying silver was to “stick it to big banks”, akin to the GameStop showdown.
Yet, silver differs from GameStop stock. Firstly, the market for silver is more liquid; so, the potential for a short squeeze is far less probable. Secondly, fund managers have held a long-term net position in the metal since mid-2019; so, the frenzy may not be deemed unprecedented.