In the past week, the Reddit forum r/wallstreetbets has embarked on another social media trend that aims to trigger a large number of short-term squeezing of silver to push the price of precious metals up to $1,000 per ounce. However, the silver tightening trend is accompanied by controversy, because many Wall Street supporters believe that hedge funds like Melvin Capital and Citadel are behind the silver push.
The controversial “silver squeeze”
Last week, news.Bitcoin.com reported on the walltreetbets (WSB) legend that took place on social media forums and the infamous subreddit r/wallstreetbets. Since Gametop’s (GME) stock has a large short squeeze, this squeeze has also spread to many other stocks. This week, Russell 3000 Index (RUA) stocks became target stocks, including NOK, GOGO, AMCX and FIZZ. But the trend does not stop there, especially with one post calling for “careful planning.” WSB’s Reddit post called for squeezing silver, pushing the price of silver from $25 to $1,000 per ounce.
Since the post was published, the Reddit administrator responsible for hosting r/wallstreetbets has deleted the post. But it was a long time later that the participants discussed the pros and cons of trying to squeeze silver to spread the information. The reason why people now think that the silver short run may be the gloomy reason is because many WSB Redditors believe that the hedge fund’s loss is to make up for their GME losses and called the silver run. There are many posts on Reddit that warn people not to participate in a brief silver crunch.
The castle is the 5th largest owner [silver], The top priority is that we don’t “squeeze” it. These are prizes for spam sent by hedge fund bots.
Those who do not like the WSB silver trend also warned that Melvin Capital Management is also a silver holder. Unfortunately, it is difficult to tell where the threads and pillars of the silver pump come from, because many free market proponents are lovers of precious metals, sometimes referred to as “the poor man’s gold”.
Despite this, there are still many WSB fans and Redditors claiming that the silver reserves come from hedge fund people, who believe that there are now imposters everywhere. Some of them became more and more irrational, angry at anyone posting silver. On Monday, many WSB supporters may feel the pain of Gametop Corp.’s stock price plummet.
Despite the controversy, it still triggers silver demand
Despite all speculations, there is still a certain demand for silver prices and access to physical gold bars. For example, if you try to buy an ounce or a few ounces of silver bars online, the process now is much more complicated than last week. A large part of the gold bars and coins were either sold out or their prices rose sharply.
This is simple arbitrage. #silver The futures is 28.67. The price of Silver Eagles on Apmex is $41.66, a 45% premium to futures. Is there an obvious opportunity to buy futures and prepare for delivery for a 35% discount on physical rights? But when they don’t, futures = $41.66 per ounce. #silversqueeze
All American Eagles are sold out among many gold and silver traders. On Sunday morning, some big-name traders stopped large amounts of silver trading. News.Bitcoin.com’s latest WSB report revealed how SD Bullion sold 10 times more silver ounces than usual. People who visit bullion dealer sites such as Provident, Apmex and JD Bullion may see unprecedented demand for physical silver.
“In the past week, our customers’ demand for silver has changed dramatically,” said Ken Lewis, chief executive of gold and silver dealer Apmex. Lewis added: “For example, the percentage of ounces sold every day is about twice what it was a week ago, and by the end of this week it was close to four times the average demand.”
The CEO of Apmex further emphasized:
After the market closed on Friday, we saw demand reached six times that of a typical working day and twelve times that of a normal weekend. Combined with the extremely high level of demand, we have also seen a surge in new customers. On Saturday alone, we added the number of new customers that we usually add in a week.
In addition, in the past 48 hours, the “#silversqueeze” hashtag has spread across the United States and some other countries on Twitter. By late Sunday afternoon, spot silver and futures were trading at US$27 an ounce. By Monday morning, the spot silver trading price was up 7.7% to US$29.76 an ounce. Commodity prices jumped above $30, and silver prices traded at $30.35 per ounce.At the time of release, an ounce of .999 silver was hovering in the $29 price range
What do you think of the controversial silver crunch? Let us know your thoughts on this topic in the comments section below.
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