Strong Rise in Silver After Investment Talk on Reddit
US Investors Flock to Gold and Silver Shops, Sweeping Them Clean
WallStreetBets Members Double in One Week
[Asia Economy New York=Correspondent Baek Jong-min] Individual investors based in the discussion forum ‘WallStreetBets’ on the U.S. online community Reddit are now stirring up silver prices. Not only in the U.S. but also in countries like China, individual investors are causing fluctuations not only in stocks but also in virtual assets such as Bitcoin, increasing overall market instability. WallStreetBets has recently been cited as the epicenter of the GameStop stock surge.
◆ Silver surges about 8% as Asian markets open = According to Bloomberg on the 1st (local time), international silver prices soared to around $29 per ounce, rising about 8%, mainly in Asian markets. Although the increase later narrowed to about 6%, the bullish trend continues.
Last week, international silver prices, silver mining stocks, and gold-related exchange-traded funds (ETFs) showed gains in the 5% range, with the rise further accelerating. Compared to gold prices, which showed little movement during the same period, the silver uptrend is more pronounced.
The rise in silver prices is analyzed to be due to silver being mentioned in the Reddit investment community. According to U.S. media, claims have been made in Reddit’s investment community WallStreetBets that "individual investors are concentrating on buying silver to defeat short sellers." Their goal is to trigger a ‘short squeeze’ in silver, similar to what happened with GameStop stocks.
Following these claims, Bloomberg reported that since the 28th of last month, individual investments have flooded both the silver spot and futures markets. According to the report, over the weekend, investors in the U.S. flocked to precious metal retailers such as Walmart, SD Bullion, and JD Bullion to buy silver bars and coins. Investors aimed to purchase silver before prices surged in the Asian markets. The premium on the ‘American Silver Eagle,’ a representative silver coin in the U.S., rose from about $2 to as high as $5.
Due to the surge in demand, it has become difficult to purchase silver even with money. SD Bullion announced on its website that "due to the rapid increase in demand, delivery of silver takes 5 to 10 days after payment is completed."
◆ Individuals searching for the ‘next GameStop’ = The coalition of retail investors is looking for new ‘targets’ following stocks heavily shorted like GameStop. After the sharp rise in GameStop and AMC stocks, Bitcoin and Dogecoin also saw a surge due to individual investors, but the upward trend did not continue and turned downward. Dogecoin, in particular, surged by 800% following mentions by Elon Musk, CEO of Tesla.
The virtual asset specialized media CoinDesk reported that on China’s social network Weibo, speculation continues about which virtual assets will rise next after the surge in Bitcoin and Dogecoin. A Weibo user with 40,000 followers claimed, "Ripple could be the next target." After Chinese virtual asset billionaire Justin Sun revealed he purchased about $1 million worth of GameStop stock, the value of the cryptocurrency Tron, which he created, surged by 54%.
Despite concerns over market volatility, individuals continue to join the ‘holy ground’ WallStreetBets. According to Business Insider, the number of WallStreetBets members increased by 3 million last week, reaching 6.2 million. As membership grows, the influence of individual investors on the market also increases.
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