Silver’s rollercoaster trading on Reddit-fuelled mania

Avatar photo

Vrasidas Neofytou
Head of Investment Research

See all articles

The silver market has experienced some rollercoaster rides this week, driven by a Reddit trading frenzy, similar to the retail-driven buying frenzy in heavily shorted shares such as Gamestop and AMC Entertainment.

Spot silver gained 20% in a three-day rally to 30 dollars per ounce, hitting its highest level since 2013. The rally was driven by the furious buying of a group of retail traders, organized on the WallStreetBets Reddit forum and targeting the short squeeze from the hedge funds.

However, the price retreated towards 27 dollars per ounce on Tuesday, following a margin hike on silver futures by the Chicago Mercantile Exchange, and as trading platforms such as Robinhood placed trading restrictions.

Even though the recent rally was driven by non-fundamental reasons, Wall Street analysts have been very bullish on Silver, with an average target price near 30 dollars per ounce in 2021.

The bullish outlook for Silver is based on the robust demand for industrial metals from China, the weaker US dollar, the inventory deficit, and the growing demand from the green energy sector.

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

Read our detailed Marketing Communication Disclaimer

SHARE

CONNECT WITH OUR TEAM

Explore the ways in which we can help you achieve your investment goals.

OUR PARTNERS
bdo

EXTERNAL AUDITOR

ey

LEGAL ADVISOR

lgt

CUSTODIAN BANK

efg

APPROVED PARTNER

Raiffeisen

DEPOSITORY BANK

Prime Fund

GROUP MEMBER