WallStreetBets post says trying to squeeze Silver is a bad idea

WallStreetBets post says trying to squeeze Silver is a bad idea

WallStreetBets post says trying to squeeze Silver is a bad idea

US stock index futures bounced 1% on Monday following a steep sell-off on Wall Street last week, as a shift in the retail trading frenzy to silver drove up mining stocks and investors awaited manufacturing data later in the day.

Silver prices are up 15 per cent since Wednesday's close, around when messages began circulating on forums such as Reddit encouraging users to buy the metal and drive up prices. One thread stated that purchasing silver "would be a tragic, irreversible decision that not only will most likely not make you any money because the squeeze is fake, it will put you on the sidelines from this righteous and glorious market we are in".

Silver prices surged to an eight-year high of just over $30 an ounce.

As with shares of GameStop, silver's surging price left traders searching for explanations, since it had no apparent grounding in the supply and demand of the metal. BlackRock's iShares Silver Trust was also up 9.48% in pre-market trading before retracing some gains.

Melvin Capital, a premier Wall Street hedge fund entangled in the frenzy over GameStop (GME), lost 53% in January, a source familiar with the matter told CNN Business. "IT'S IMPERATIVE WE DO NOT "SQUEEZE" IT." one WallStreetBets user wrote on Sunday.

Citadel Advisors LLC owned about 6 million shares of the iShares Silver Trust as of September 30, equivalent to a 0.93 per cent stake, data compiled by Bloomberg show.

"The retail trader focus today seems to be on silver, and it's considered to be a small pocket of the market", said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. On Monday, the Wall Street Journal reported that the firm has raised $3.4 billion from its existing investors to shore up its platform after experiencing issues with its clearinghouse that it says forced it to halt certain buys. Many institutional investors have been bullish on silver futures for some time. "Its use in EVs is substantial, and in photovoltaics, 20 grams of silver goes into each solar panel".

Demand for silver as a precious metal and hedge against inflation, meanwhile, is also strengthening.

The silver run was coordinated via users on WallStreetBets, 4chan's /biz/ board, Twitter, and other websites over the weekend. The price of silver has risen by over 10% since the call as the group targets a price of $500 to bring down JP Morgan's Silver shorts.

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