Silver price surges as GameStop traders move into precious metals

Silver futures on the Comex exchange rose by as much as 6.7% to $27.1 an ounce.

WallStreetBets is the same investor board that started the wild short squeeze on Gamestop Corp. and other companies. Shares of the US videogame retailer have soared about 17-fold since January 12 as small investors, organizing on social media, have piled in and forced professional short-sellers to abandon their positions with heavy losses.

Reddit’s comments were centered on iShares Silver Trust, the biggest exchange-traded instrument backed by silver, calling it “THE BIGGEST SHORT SQUEEZE IN THE WORLD,” and citing banks manipulating gold and silver prices.

First Majestic Silver, soared as much as 39% in New York on Thursday, while iShares Silver Trust gained as much as 7.2% and spot silver gained 6.8%, the biggest jump since August.

“There’s a short squeeze going on in silver. The ‘hoodies are all rolling into silver and the party is on,” Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago, told Bloomberg.

“All those other stocks like GameStop and AMC, they’re dumping because they’ve been restricted, and they gotta go into other short opportunities and silver is an easy identifiable target,” Streible said.

Peter Schiff, CEO of Euro Pacific Capital, said on Twitter that Reddit traders are getting smarter.

“Silver stocks are actually cheap, and represent good investment value,” he said.

“This isn’t predicated on any global events, it’s just people on a message board putting all their guns towards the precious metals markets,” Bob Haberkorn, senior market strategist at RJO Futures told Bloomberg.

Name trading

Shares in small Australian nickel and cobalt explorer GME Resources (GME.AX) jumped as much as 53% on Thursday, apparently driven by the similarity of its stock ticker code to GameStop (NYSE: GME).

“There are people buying the stock for shits and giggles, just because of the ticker symbol,” market analyst Kyle Rodda of brokerage IG Markets in Melbourne told Reuters.

“It’s got nothing to do with the company and entirely to do with this mad phenomenon that we’re seeing at the moment where these Redditers looking to swarm into these stocks and play around with the market a little bit for their own amusement,” Rodda said.

GME Resources managing director Peter Sullivan told the Sydney Morning Herald the surge caught him by surprise.

“When I opened my share tracking app and saw it was at 9.4 cents, I was stunned,” he told the newspaper.

“It just went bang, and I thought: ‘Well, what’s going on here? Is there something about my own company that I don’t know?’”

“Eventually my brother’s son, who works in Sydney, told us it was about speculation to do with the ticker GME,” he said.

“I was hoping to be able to say it was more to do with our world-class nickel projects.”