Reddit Traders’ Next Target: Silver

The Next Retail Trading Trends

Retail traders have had a powerful impact on markets in recent weeks. The world has watched as shares of heavily shorted stocks like GameStop (GME) and AMC Entertainment (AMC) have soared while traders have encouraged one another to pile into these stocks through discussions on Reddit and other social media platforms.

Now these traders are making other investments which are causing new market trends. For example, the price of silver surged Monday as the metal gained attention from new investors. Special-purpose acquisition companies, known as SPACs, are also getting a boost as a result of new interest from retail investors.

The Silver Squeeze

The price of silver surged 11% hitting an eight-year high yesterday. The price of the metal fell slightly after this spike, but on the whole, silver and silver-related equities experienced a significant rally. iShares Silver Trust (SLV), an exchange-traded fund which follows the price of silver, surged yesterday, as did shares of silver mining companies like Coeur Mining (CDE) and Pan American Silver Corp (PAAS).

On the Reddit forum WallStreetBets, there were multiple threads discussing silver over the weekend and the hashtag “#silversqueeze” was trending on Twitter (TWTR). Analysts have pointed out that the silver market is larger and more liquid than the market for shares of GameStop or AMC, so retail traders may not be able to impact it as dramatically. But at the moment these traders are driving changes in the silver market.

As Mohamed El-Erian, Chief Economic Advisor at Allianz said, “It’s a very different target, but the fact that you can move silver, such a large market, is an indication to everybody that they have to take these new technicals seriously.”

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